Can Entrepreneurship Uplift Africa?

Considering that Africa accounts for a mere 3% of global trade, and that intra Africa trade is less than 10%, Africa still has a long way to go towards acquiring a larger share in the global arena. Questions arise as to why Africa has been unable to dominate or at least capture a larger percentage of the global markets. It is well known that most African countries are endowed with an abundance of natural resources such as gas, minerals and timber as well as agricultural potential however, billions of dollars worth of revenue is unrealised due to bureaucracy, a lack of political willpower, poor infrastructure and unnecessarily complex trade rules. By giving a human face to this tragedy it can thus be said that more people sink into poverty and the global income inequality divide between Africa and the rest of the world grows wider.

There is a widespread consensus globally that entrepreneurship is a key driver for economic growth and development. In development terms entrepreneurship can be a major determinant towards poverty alleviation and breaking out of Aid dependency for a developing nation.  Many entrepreneurs in Africa are certainly placing Africa back on the global trade agenda. Bethlehem Tilahun Alemu, CEO and Founder of SoleRebels gives a good picture of the many faces of Africa that are economically empowering their communities and utilising local resources remarkably well.  SoleRebel is a fair trade certified footwear company based in Addis Ababa, Ethiopia. The shoes are made from recycled tyres with organic cotton and leather uppers added to the recycled tyre soles, thus leading to the production of a shoe that uses locally sourced products; makes use of artisan’s skills and weaving skills passed through generations; employs the local labour force and pays its workers wages that are four times the legal minimum wage in Ethiopia.


Thankfully such initiatives are gaining global recognition. Recognised for its social values and trade principles, SoleRebels founder Bethlehem  Alemu was recently awarded the  prestigious enterprise award ‘Social Entrepreneur of the year’ by the Schwab Foundation for Social Entrepreneurs at the May 2012 World Economic Forum. What is more impressive about SoleRebels is that it has captured the global market through internet sales and an order placed in Canada for example, is usually delivered by courier from Ethiopia within a week. 

Technology drive

SoleRebel is a classic example of Africa’s ability to tap into the global market via technology. Generally people in Africa and entrepreneurs alike are increasingly becoming tech savvy and are not being left behind by the global social media explosion. In South Africa for instance, Fuseware reports that the use of Twitter grew 20-fold with an estimate of approximately 1.1 million new Twitter users in 2011 alone. The World Bank asserts that, ‘93 percent of Kenyans are mobile phone users and 73 percent are mobile money customers’. 
Such figures for a developing country are indeed phenomenal and highlight the fact that Africa has not been left behind in technology. Broken down practically, having access to the internet enables more people, traders and entrepreneurs to remain connected globally regardless of location and brings much needed services and communication to Africa’s rural areas (where majority of the population is found). The mobile money transfer for instance has enabled people even in the remotest parts of Kenya to send or receive money from the comfort of their phones. This service that bypasses traditional banking is quite revolutionary in Africa and has enabled faster cashflow for businesses.

Cost of Trade in Africa

In most cases what Africa lacks is not innovation or skills but the cost of trade in Africa can be described as the major obstacle to economic growth and development. A report by the World Bank  asserts that high trade barriers are said to contribute to billions of dollars lost in potential trade earnings for the continent. Intra Africa trade in itself is a major challenge as movement of goods within African borders are slowed down by long, often slow and arduous trade procedures that demand a thick skin to begin with, if one is to get anywhere. 

The report highlights three main areas that need to be addressed. These are:
A simplification of border procedures and the adoption of new technologies such as cross-border mobile banking in order to improve cashflow.
Secondly, the elimination of costly import and export licensing procedures, the failure of which contributes to an escalation of prices of goods and services and in some cases the inability of nations to address food shortages, and; 
Thirdly, a reformation of regulations and immigration rules has been recommended in order to enable the flow of goods and services from professions such as doctors, lawyers among other professions. 

Indeed a long term outlook is necessary when formulating policies that will ease regional and global trade. Sustainability with the aim of job creation, addressing poverty and empowering entrepreneurs through investment in infrastructure, technology and utilising existing skills as well as offering training is mandatory if Africa is to raise its stakes and be taken seriously on the global trade arena. The majority of businesses fall within the SME (small and medium enterprises) sector of which much support through better regional trade policies and their implementation would see Africa’s SMEs lead the way in national economic development. It’s a high time that SMEs became readily recognised as a positive route towards stimulating economic progress.
For a country like Ethiopia, as seen with SoleRebels, SMEs are equally placed to change the image of a country from the unfortunate media driven image of aid dependency to that of a country able to sustain itself economically given the right business environment. The advent of globalization means that countries can no longer choose to remain isolated but much is to be gained if nations continually address ways to integrate with their neighbours.