Country & City Insights

Endeavor partner Omidyar Network and Monitor Group reveal initial results of accelerating entrepreneurship in Africa survey

Reprinted from Omidyar Network. Original press release here.

Entrepreneurship is gaining credibility as a vocation in Africa, but it continues to face significant challenges, according to a new study sponsored by Omidyar Network and conducted by Monitor Group. The “Accelerating Entrepreneurship in Africa” survey found 57% of respondents consider becoming an entrepreneur a desirable career choice. The findings signal the presence of an important condition necessary for high-impact entrepreneurship to thrive in Africa: No longer is being an entrepreneur solely a decision of necessity, but one of aspiration. Tebogo Skwambane, managing partner of the Monitor Group Johannesburg, presented the results at Omidyar Network’s Entrepreneurship in Africa Summit in Accra, Ghana on Wednesday, 10 October.

The survey also identified significant barriers to fostering an environment in which high-impact entrepreneurship can thrive. A lack of access to financing, inadequate infrastructure, insufficient skills training, limited affordable and accessible business support services and burdensome administrative policies were among the obstacles included in the survey findings.”

•Sixty percent of respondents held that the cost of capital hinders company formation and growth.
•Only 23% believe they can afford the costs associated with using existing infrastructure.
•Eighty percent believe primary and secondary schools do not devote enough time to teaching entrepreneurship, and 59% believe the same of colleges and universities.
•Fifty-five percent feel that there aren’t sufficient business support services available for new and growing firms
•Sixty-two percent responded that they know entrepreneurs who have admitted to circumventing administrative burdens that discourage formalizing a business. These include: paying taxes, obtaining licenses and hiring employees informally.

“Our success begins with understanding the needs of the entrepreneurs, the landscape in which they operate and the barriers that need to be removed to create vibrant businesses,” said Malik Fal, Omidyar Network’s managing director for Africa. “At the Entrepreneurship in Africa Summit, this research sparked critical conversations and healthy debate among many of the people who can help remove these barriers: early-stage investors like Omidyar Network, business and government leaders, and entrepreneurs themselves. The survey will be available on the Monitor Group and Omidyar Network websites in the near future. A whitepaper detailing the discussions and recommendations coming out of the Entrepreneurship in Africa Summit will be published next March. Both promise to carry these important conversations through 2013.”

The multi-phase research project will gather insights into the health of entrepreneurial ecosystems in Africa, the challenges facing African entrepreneurs and the barriers to creating environments supportive of entrepreneurship. The project commenced with a recent survey of entrepreneurs in Ethiopia, Ghana, Kenya, Nigeria, South Africa and Tanzania. Subsequent phases of the research will lead to the formulation of recommendations on the critical policies required for entrepreneurship to thrive in these six countries. Monitor’s findings and the Entrepreneurship in Africa Summit are part of a week of events focused on creating and celebrating high-impact entrepreneurship on the continent. The week began with ON Baraza, Omidyar Network’s annual gathering of its Africa-based and Africa-focused portfolio organizations, and culminated with the African Leadership Network’s annual conference and the 2012 Africa Awards for Entrepreneurship.

“Despite facing significant challenges and obstacles, the African entrepreneur is resilient and optimistic. To maximize the contribution that entrepreneurs can make to the continent, it is critical that policymakers craft policies that are suitable for their national or regional context. This requires not only better understanding the strengths and weaknesses of the entrepreneurial environment, which our survey set out to do, but also requires more focused, tailored and locally meaningful strategy formulation by policymakers,” said Tebogo Skwambane, managing partner of the Monitor Group Johannesburg.

Omidyar Network selected Monitor because of the firm’s success as a global leader in entrepreneurship development research. Monitor has conducted its Entrepreneurship Benchmarking Initiative in 26 countries with great success, which led to the report, Paths to Prosperity. The detailed findings in the report continue to be widely-referenced. Both serve as frameworks to better understand the entrepreneurial climates in specific countries, as well as the programs and policies that can lead to successful high-growth entrepreneurship in those environments. As an example, Monitor’s role in helping Denmark foster entrepreneurship is widely-lauded.

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