THE CHALLENGE FACING AFRICA IS IN HOW TO COMPETE GLOBALLY

Throughout my professional life, I have pondered the question of economic development and entrepreneurship. I have often wondered why Africa has slower growth while other emerging economies like China, Brazil, and India have meaningfully increased economic growth. This manuscript is an extract from my book African Hidden Potential and is the consequence of my thoughts and deliberations over the past ten years.

Written for entrepreneurs of Africa and for the broader international community who truly wish to see Africa progress. For me, finding a solution to Africa’s woes is a personal quest. Having been raised in one of the poorest countries in the world, I feel a strong desire to help families like my own, who continue to suffer the consequence of economic failure in their everyday lives. Africa’s common challenges are undeniably stark. I offer my perspective on the low level of economic development and propose ways to find economic growth which has remained elusive.

I wish in a very brief way to offer a few points about African business and entrepreneurship. I endeavour to show the reality of Africa’s re-awaking to being a pioneer in many fields of human endeavor. My hope is to start and facilitate constructive conversation among African entrepreneurs. This is especially in the light of the theme “Competing Globally” of our organization Ingcambu Projects which is starting the process of defining African business practice.

African Hidden Potential is a tale of the defining challenges and opportunities on how to create and sustain economic growth. It might be controversial, but it carries a very important message. Our ability to create sustainable economic growth is the defining challenge of our time. The challenges facing entrepreneurs in Africa are varied and many. The absence of an enabling environment, lack of financial support, weak economic infrastructure, and lack of policy coherence for small business support need to be addressed quickly if African small businesses are not to fall far behind their counterparts on other continents.

Given the small number of indigenous African Small to Medium Enterprises (SMEs) compared to other parts of the world, education and training support for entrepreneurs is needed to help establish a good foundation for small business growth. Students and anyone interested should be encouraged to become entrepreneurs because of their potential to explore non-traditional business models. Another area where government assistance and support is needed is inter-firm linkages. Strengthening inter-firm linkages will enhance learning for local entrepreneurs and provide
opportunities for growth and the acquisition of skills for effectively competing in today’s global marketplace.

Large buyers are important drivers of technological innovation in global value chains because of their emphasis on higher product standards, the constant threat of supplier replacement, and their support of their customers and suppliers. Supply relationships with large buyers provide SMEs with access to new products, process technologies, and trade credits.
Furthermore, efforts should be made to help entrepreneurs to meet international product and process standards in an effort to gain a foothold in the international economy. To establish a strong presence in the global marketplace, the number of small African export companies must increase.
Participation in international trade opens up new markets and growth opportunities. African governments should devise policies and regulations that encourage small manufacturers to export. The era of complete dependence on sales in the domestic market is over, and new entrepreneurs should be made aware of this situation to ensure their long- term survival. Partnerships with foreign firms through joint ventures, licensing, and other collaborative modes of operation should be
encouraged, especially partnerships that have export potential.

Export Promotion of Organic Products from Africa

Development programs such as the Export Promotion of Organic Products from Africa (EPOPA), initiated by the Swedish International Development Cooperation Agency (SIDA), is an example of the kind of partnership that helps small businesses in Africa gain access to markets in developed economies. EPOPA offers small farmers in Africa opportunities to participate in organic food markets in Europe.

“Entrepreneurs should be made aware of the importance of family members, friends, and business partners in raising startup capital.”


Access to bank loans and direct government financial support are reported in surveys of entrepreneurs as a serious problem for small businesses in Africa. Better financial assistance is needed to address this problem. According to Honohan and Beck, African firms finance a significant percentage of their investment with internal funds, about 68 percent. This observation highlights the lack of financial assistance to small-scale enterprises. Policies to address this problem should be established with input from lending institutions. The concerns of banks should be taken into consideration in developing financial support policies for small businesses. Governments should work with lending institutions to lower the risk of loan default. While governments need to play an important role, other sources of assistance to small businesses, such as venture capital should be considered. Entrepreneurs should be made aware of the importance of family members, friends, and business partners in raising startup capital. It is also important that entrepreneurs recognize the benefits of education and training in ensuring the success of any business endeavor.
This manuscript intends to fan the flames of entrepreneurship that have already started to burn throughout the continent. Economic growth is defined by three key variables: Capital (how much money one has), Labour (the quality and quantity of the labour force), and productivity (rate of output per unit of input).

The importance of economic growth as a metric to gauge improvements in living standards is not perfect by any means, but it is a very useful metric to be able to compare across countries. Why do we still not have the formula to growth?” because we are not entirely sure how to stimulate growth. For example, about 60% of why one country grows and another one does not is because of productivity; productivity can be anything from the rule of law to democracy, to technological advancements and innovation. It is really about how quickly we can convert labor and capital into actual improvements in living standards. It also aims to stimulate debate on how we might begin the process of equipping a resilient entrepreneurial economy that will lead to economic growth in Africa.

“…those who were given much have the responsibility to return much back to society.”

“One of the striking things I pointed out was that those who were given much have the responsibility to return much back to society. Herein lays deep wisdom because it means that the moment I feel that I have received something, as simple as the birdsong in the early morning, this beautiful feeling rises and I feel blessed. Therefore to me abundance begins with a feeling, which I can cultivate.

“In South Africa, I experience that there is a “guilt consciousness” running as an undercurrent in our social dynamics. This was born or created from historical pain and mass suffering and is yet to be healed, but cannot be healed when we keep ourselves locked in the system of perpetual guilt. This
is why the messages from my book bring a message of hope and offer a new possibility.”

Clearly, we need a more expansive, aggressive approach to entrepreneurship, an approach that acknowledges that the world has grown more complex and demanding. In today’s world aggregative,
reductive methods alone do not impart a solid understanding of opportunity and risk.

New Approach

A new approach must be forged through creative discussion and debate among all stakeholders, globally. Consider this book an opening shot. Not all will agree with the views expressed here. This book raises tough questions-but if it succeeds in steering further thought and action, it will have had served a good purpose.

Oliver Chikodzore is an Economic Strategist, Author, and writer of many publications

By Oliver Chikodzore

Economist Strategist & Author

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