By: Tebogo Mokwena
Small Business Development Minister Stella Ndabeni-Abrahams has called on African states to join hands in building a coherent ecosystem to support start-ups. She emphasised the need for the continent to undergo a paradigm shift that put innovation and entrepreneurship at its centre. The minister also said that digital technologies offered the continent a chance to grow rapidly and open new pathways for innovation and employment.
Ndabeni-Abrahams was speaking virtually at the inaugural African Startup Conference which was held in Algeria this week. According to the minister, Africa’s population would double to almost three billion by 2050, and in order to reap the benefits of this population growth, the continent would have to put entrepreneurship and innovation at its centre. “Currently, evidence suggests that our entrepreneurial activity is improving but lags behind other developing regions like East Asia and Latin America,” she said.
“Our early-stage entrepreneurial activity is lower and our start-up failure rate is also higher than comparative regions,” Ndabeni-Abrahams said adopting the right policies was crucial to support start-ups. She also noted that governments were obligated to learn from innovators, start-ups, incubators and accelerators about what worked and what did not for a conducive ecosystem. “Some countries like Rwanda, Nigeria, the Democratic Republic of Congo and many others have developed start-up acts to cut red tape and enable start-ups,” the minister said.
“In South Africa, we don’t have a start-up act, but have established a Red Tape Office in the Presidency to look at regulatory constraints and how to address them.” Ndabeni-Abrahams also stressed the urgency of addressing the global divide. “Digital technologies offer Africa a chance to unlock new pathways for rapid economic growth, innovation, job creation and access to services,” she said. “Yet current constraints and the slow pace of growth of the digital economy in Africa leaves the continent at risk of falling behind a growing digital divide.
“Digital transformation requires concentrated effort in each country to build up the core foundations of the digital economy, including digital infrastructure, digital platforms, digital skills, digital payment systems, and an environment supportive of digital business and entrepreneurship.” Ndabeni-Abrahams further pointed out that African states must enable access to finance for early-stage start-ups, which were underserved, and that independent financial instruments must be set up. “We also need to do far more to promote entrepreneurial culture and education,” she said. Innovation and entrepreneurship have been identified by both the state and private sectors as critical for economic growth.