Posted on October 15, 2012

Entrepreneurship in Africa Still Faces Challenges, Survey Finds

While entrepreneurship is gaining credibility in Africa, entrepreneurs continue to face significant challenges, including a lack of access to funding, a new study funded by the Omidyar Network and conducted by the Monitor Group finds.

According to Accelerating Entrepreneurship in Africa, 57 percent of survey respondents in Ethiopia, Ghana, Kenya, Nigeria, South Africa, and Tanzania considered becoming an entrepreneur a desirable career choice — an important finding if high-impact entrepreneurship is to thrive in Africa. Sixty percent of respondents, however, said the cost of capital hinders company formation and growth, while only 23 percent believed they could afford the costs associated with existing business infrastructure. Other challenges cited included insufficient skills training in schools and burdensome administrative policies.

The survey is part of a multi-phase research project designed to gather insights into the health of entrepreneurial ecosystems in Africa and the challenges African entrepreneurs face. A white paper detailing recommendations based on the survey results, which were announced at the Entrepreneurship in Africa Summit in Ghana last week, will be published next March.

"Despite facing significant challenges and obstacles, the African entrepreneur is resilient and optimistic," said Tebogo Skwambane, managing partner of the Monitor Group Johannesburg. "To maximize the contribution that entrepreneurs can make to the continent, it is critical that policy makers 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 policy makers."