The youth of Africa represents 65% of the total population and is the continent’s backbone. With such a young population, only the sky’s the limit for Africa. However, simply having a young population is not enough. It is also equally crucial to harness the power by presenting the right opportunities to them. Soon a large section of this population will enter the job market. Therefore, job creation is necessary to ensure a low employment rate, and the solution lies in entrepreneurship.
The Role Of Entrepreneurship In Economic Growth
Entrepreneurship is vital for the economic growth of any country. With the help of innovative services, products and technologies, an entrepreneurial ecosystem ensure new jobs and livelihood. Other benefits include improved productivity for the firms and the country’s economy. Moreover, it helps bring structural transformation, which is not limited to economic development but includes societal development.
Young Entrepreneurs In Africa
75% of the young African population wants to create a business in the next five years. Currently, every one in five working-age people is working on starting a business. Furthermore, most people who dream of entrepreneurship want to incorporate tech in their startups. Many young African entrepreneurs have already worked towards developing a wide variety of apps, a few similar to VLC in official app stores, AppGallery and other stores to show their talent. Therefore, the current entrepreneurial landscape is quite rich.
Along with big businesses, even small businesses form the continent’s backbone. Economic growth, the young population and increased digital penetration drive the entrepreneurial landscape. Accelerators such as the pandemic and tech talent further supplement this growth.
In Africa, the median age of entrepreneurs who have launched their startups is 29. Globally, this age is 34. Even though the age of entrepreneurs is comparatively younger than the global average, they are still rich in experience. Most of the founders have an average work experience of eight years. In the future, it is expected that Africa’s young population will venture into the entrepreneur ecosystem at a much younger age.
The young entrepreneurs, through their startups, will further drive economic growth. Additionally, the entrepreneurs will increase the living standard of the citizens by providing employment and innovative services. Now is the right time for governments and investors to take African startups seriously to help them function better and harness the true potential of the youth. Policies should work towards fixing inadequate skills, digital infrastructure, and funding to remove the typical barriers of entrepreneurs in their journey.
Which Startups Are Driving African Economic Growth?
Unsurprisingly, tech startups are driving the economic growth of the economy. By 2050, the digital economy will contribute $300 billion to the GDP of the continent. Furthermore, it will boost the employment rate through job creation. Many investors realise the African youth’s potential and entrepreneurial journey; hence, the continent is receiving funding like never before. For example, since 2015, the annual funding of the African startup has increased by 1056.5%. The deal size of the financing has doubled too.
The African startups have generated many job opportunities, averaging 32 new jobs per company. Apart from Africa, the other popular niches of startups are fintech, e-commerce, e-health, logistics, ed-tech and energy.
In counting the number of funded startups, Nigeria and Egypt top the list, followed by South Africa and Kenya.
How To Promote Youth Entrepreneurship In Africa?
The policies of the government have a direct impact on youth entrepreneurship. Therefore, the youth need to be included in policy-making to help understand the barriers they face. Additionally, the government should implement the frameworks at multiple levels to ensure their working. Finally, it is also crucial to work towards building entrepreneurship skills amongst the youth to help them realise their full potential.
Many startups, including African startups, face financial constraints. Therefore, the government should help ease the problem by supporting effective finance plans for startups. Lastly, the government should nourish an entrepreneurial ecosystem in their countries to level up the entrepreneurial spirit amongst the youth. To stand tall in the global entrepreneurship ecosystem, African companies require a supportive business environment, solid connections and funds.
With emerging young entrepreneurs, there are a plethora of opportunities in Africa. The recent success stories of the startups have already made the globe investors curious.