Africa is rising, but will we rise together? Africa Summit 2013 at a glance

The 2013 Africa Summit (#AfricaSummit), hosted by the Omidyar Network in Mauritius, took place last week on 2 October where delegates from around Africa assembled to discuss the Accelerating Entrepreneurship in Africa report compiled by the philanthropic foundation established by Pierre Omidyar, in partnership with global strategy consulting firm, Monitor Group, and published in April this year.

The in-depth report, arguably the most comprehensive entrepreneurship study done in Africa, was discussed at last year’s Africa Summit held in Accra, Ghana, where solutions were put forward for the challenges raised in the report. This year’s gathering was aimed at putting insights into actions, with panelists representing both government and private sectors.

This article seeks to provide an oversight of the event, and hopefully it is an illuminating summary.

Malik Fal — MD of Omidyar Network Africa — told media delegates after the summit that Omidyar Network sees its role as a convener. It neither has the power, nor authority to enforce any policies, and can only encourage discussion, networking, and create an environment — in the form of the summit — to allow the continent’s own leaders a chance to voice their concerns, be heard, and hopefully take action. “The summit is a place to share their stories”, Fal said during the media briefing.

The promise of action is not one Omidyar Network itself can make, because of its role as a convener, and perhaps that illuminates the challenges for entrepreneurs(hip) on the continent. Africa is not short of positive-thinking, nor of ambition, Omidyar Network has done its part with the research and encouraging discussion, but now the power shifts to the African leaders (both in government and in private) to make the changes Africa needs to foster and grow entrepreneurship.

The role of the government

One notable aspect of the summit was the tension between the government and private sector. It is a wide-spread view that entrepreneurship in Africa is based on necessity (entrepreneurship for survival), rather than opportunity-based (aspirational, scalable).

This means entrepreneurs cannot wait for policies to change over months (or even years) nor can they wait for inefficient systems while they need to feed themselves and their loved ones. This frustration was most felt when the summit opened up to the floor and the entrepreneurs had a chance to speak.

Why is it so difficult to register a business? Why is it so hard to open a business bank account? How can the banks expect financial history (three months bank statements or financial records for example) when entrepreneurship by its very nature is about the future, not the past. Investing in an entrepreneur should be based on what could be, because in most cases there is no history. Necessity entrepreneurship cannot survive the inefficiencies of government and the mountain of red tape.

One way suggested to improve government efficiencies was the implementation of feedback mechanisms. According to panelist Jason Goldberg (Edge Growth, South Africa) these can be simple processes, such as SMS or even Twitter. The president of Rwanda was cited as a great example, as he frequently responds to tweets from citizens.

The informal sector

The poor enforcement of regulation, coupled with prevalent necessity-based entrepreneurship, sees the African entrepreneurial landscape structured around a large informal sector, with entrepreneurs functioning “off the grid” so to speak: unregistered, unbanked, tax-free. How we transform the people operating in the informal sector to the formal sector was a hot topic of debate during this year’s summit.

For panellist Andile Khumalo (MSG Afrika, South Africa), the solution is not as simple as transforming the informal sector into a formalised one, for example, at the time of the study, Nigeria’s informal sector made up roughly 50% of its GDP — the informal sector has a role to play.

Khumalo suggested that we rather transcend high-impact entrepreneurs and put them on the trajectory to create jobs and, in the process, become local role models who can also invest in younger companies down the line. IKED and Intentac Thomas Andersson (Sweden) disagreed to a point, saying that there is a danger to creating an “elite,” and indicated that the solution lay in training (and thus empowering) people at school level. However, he agreed that we need local role models, but “shouldn’t make a show of it”.

Building an angel network

Perhaps the most pressing question at the summit was how do we practically build an angel network?

One of the solutions put forward by the report was to formalise angel and VC networks, with greater collaboration between government and the angel and VC ecosystem.

One entrepreneur from MODE in Kenya said that entrepreneurs are resilient, but the infrastructure has to allow for failure. “Angels need to truly be angels.” Another concern was that angels tend to invest in people who remind them of themselves, and this intrinsically does not promote diversity in investment. We need an angel network that is inclusive, especially when it comes to gender.

There was a not a concrete answer, although initiatives like Angel Fair in Johannesburg was touted as a good example of practical exposure to angel networks.

Pan-African Solutions

The most ambitious, and inspiring, piece of advice came from seasoned entrepreneur, Manu Chandaria (Chairman and CEO Comcraft Group), who also won the Lifetime Achievement Award at the Africa Awards for Entrepreneurship hosted by the Africa Leadership Network.

He said that we need African solutions to African problems — we cannot just take responsibility for our countries, but need to take responsibility for the entire continent.

His solution: open up our borders and trade among ourselves. “That is the way forward” Chandaria told the audience.

This mirrored something panelist and government representative Astrid Ludin (South Africa) said — take away provincial powers to regulate, and keep it national — make legislation consistent. Whether regulatory frameworks can practically be catered to an entire continent is yet to be seen, but the rhetoric is a positive and inspiring message nonetheless.

The Africa Summit is a well-intentioned event, but what will come of the discussions that were held? The Omidyar Network cannot enforce, it is a convener after all. It has played its role: it has facilitated the conversation, and we have heard the stories.

Now it is up to the policy-makers, the leaders — both in government and the private sector — to make the practical changes the continent needs to grow, and foster, entrepreneurship across the continent.

Could Chandaria’s solution work — with over a one billion strong growing consumer market on the rise, perhaps opening our borders and trading with our neighbours will work. With entrepreneurship based on necessity there is no time to waste, we need regulations put in place so that small businesses can do more than survive, we need to enable them to thrive.

Africa is rising, but will we rise together?