Entrepreneurship is key to unlocking opportunities in EA region28th Jan, 2016
GES Summit puts Kenya, EAC at the centre of global economic and geopolitical map
The just concluded Global Entrepreneurship Summit (GES 2015) that ended in Nairobi last weekend has put Kenya, and by extension the East African region at the centre of global economic and geopolitical map. It has also heralded a new dawn for entrepreneurs across the region. First came the announcement by President Barack Obama—who was on a three day trip to Kenya—that the US had secured more than $1 billion in investment for new entrepreneurs around the world, following up on a promise made at last year’s summit in Morocco.
Then big companies such as General Electric, the Mara Group, Mawingu Networks, KCB Group among others, also pledged huge investments towards entrepreneurship, signaling the growing investor confidence that East Africa is ready for take-off, riding on opportunities to unlock this potential.
If appropriately leveraged in the coming years, the GES 2015 will raise Kenya’s and as a whole East Africa’s global visibility as it has provided a global platform to showcase the region’s creativity and innovation and opportunities for tourism, trade and investment and thus opening a door for the East African region to attract new investments.
Kenya is the gateway to East Africa and remains the leading business and investment hub in East and Central Africa providing local, regional and international investors second-to-none opportunities to grow and expand their portfolios. Last week I had the privilege to moderate a panel discussion on the sidelines of the 2015 Global Entrepreneurship Summit. The session, which consisted of Kenya’s Deputy President William Ruto and leading entrepreneurs—Strive Masiyiwa, Founder of Econet Wireless, Ashish Thakkar, CEO of Mara Group, Mike Macharia CEO and Founder of Seven Seas Technology and Monica Musonda, CEO, Java Foods—sought ways entrepreneurs in Africa can leverage on the existing opportunities to make a name in the business world. During the session, participants deliberated on the efforts that the government and the private sector in Africa have undertaken to spur entrepreneurship across the region. Some of the key findings were that most of the problems that entrepreneurship cited as having hindered their progress has always been associated with lack of an open public policy that supports entrepreneurship as well as inability to access funds from financial institutions. Participants called for the establishment of youth-friendly financial services and addressing the need for access to credit for youth to start businesses. This is a good starting point for the East African region, as the bloc pushes its economic agenda that is grounded on entrepreneurship.
The exposure from the Summit, and the floodgates of funding that it has unlocked will therefore act as a springboard for entrepreneurial growth and job creation in East Africa. The discussions, funding and outcomes from the Summit should inform development of a legacy programmes and at the same time strengthen diplomatic relations between East Africa and the US. It is a platform for Kenya and East Africa to tell its story and thus boost the bloc’s image as an investments destination of choice.
East Africa is acclaimed as an innovation leader in Sub Saharan Africa evidenced in its financial services and technology sectors. A number of initiatives, including the rapid expansion of money transfers through telephones and electronic mobile banking services have raised the quality of financial services and expanded access of services to the unbanked. Mobile banking is one innovation which has progressively pervaded numerous sectors of economy and industry. Its uptake in Kenya for example is growing at a remarkable pace and it is increasingly becoming the platform of choice for delivering innovative financial services and commerce capabilities. The dynamism and enthusiasm shown by the region’s youth in driving innovation has been a hallmark of Kenya’s globally acclaimed technological advances on the African continent. Safaricom’s M-Pesa, has placed Kenya as a global leader of innovation and the adoption of mobile payment solutions has transformed the financial service industry particularly reaching the unbanked consumers.
Entrepreneurship plays a vital role in the East African region in line with the priorities outlined in the various economic blueprints the governments across the region are relying on. The Kenyan government continues to integrate entrepreneurship into its transformation and economic development efforts by deploying necessary measures to support fledgling innovators and entrepreneurs as well as eliminate barriers that unnecessarily constrain them to stifle innovations.
East Africa boasts of several economic strengths. The region’s tourist offering is unique and it is a globally acclaimed experience the world over. From the Gorilla’s, to the Wildebeest Migration, to Kenya’s Cradle of Mankind status and to the beaches – these make the best tourist destination in Sub Saharan Africa, offering unique experiences to visitors through its pristine holiday and safari destinations. As one of the world’s largest national tourism markets, Kenya and the East African region as whole has a host of opportunities it foresees from investment partnerships to promote tourism infrastructure.
That said, unemployment remains the single most serious problem facing the youth across the East African region. There is no denying that youth unemployment is a major threat to the achievement of the region’s long term development blueprint as laid out by each of the economies. To address this phenomenon, there is need to establish and support more opportunities for young entrepreneurs by providing a framework to facilitate young people to establish their own businesses, a concerted and joint effort among governments, public and private entities.
Financial institutions have all along been blamed for hurdles that have hindered the growth of start-ups in the country. From demanding for security before being given loans to sending auctioneers to come for loan defaulters, entrepreneurs have found the going tough in their pursuit to create wealth. On the same breath, the Kenyan financial eco-system has undergone tremendous transformation over the years to create a smooth pathway for entrepreneurs wishing to set up businesses.
It is in the same spirit that KCB Group pledged Ksh1 billion for the next five years to boost the government efforts to finance start-ups through the Enterprise Kenya Fund. The initiative which is expected to scale up at least 50 start-ups will go a long way to catalyse innovation and provide young entrepreneurs with the much needed financial support in their innovative journey. By doing this, we shall be encouraging innovation by creating “a space teeming with knowledge and skills from diverse background”.
Lessons from the Global Entrepreneurship Summit
Women and youth also emerged as the most critical groups that needed attention if entrepreneurship is to be fully harnessed. Speaker after speaker also reiterated the need for entrepreneurs to fully exploit their potential through investment in value chain development and value chain finance approach in order for them to fairly compete in the global market. The summit also provided the emerging entrepreneurs with networking and investment opportunities where they were able to meet established business for mentorship.
As we take stock of the Global Entrepreneurship Summit, there is need to reflect on how best we can make our region the destination for entrepreneurs. The setting up of innovation centres is a step in the right direction as they seek to spur entrepreneurship by providing comprehensive support to new and promising enterprises through incubation programmes. We would like to see increased activity in terms of showcasing our own products as well as ensuring that entrepreneurs are well positioned to tap into lucrative opportunities that are inherent in the region.
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