Steed Kassa returned to Estuaire, Gabon, after a few years of studying and working in Canada. Although his academic and professional background is in the financial sector, Kassa decided to pursue other opportunities, including trading rough diamonds and gold, and running an agribusiness, which he wants to further develop.
It was the food processing business idea that got him a place at an entrepreneurship program organized by the The Tony Elumelu Foundation, a philanthropic organization that supports entrepreneurship in Africa and was founded by Nigerian entrepreneur and businessman Tony Elumelu.
“The program opened my eyes to a lot of things that I didn’t know about managing a business,” Kassa told Devex.
Kassa participated in the first year of the Tony Elumelu Entrepreneurship Program, or TEEP, which casts a wide net looking for young African entrepreneurs it can help grow. The 2016 group, which gathered earlier this month provides an interesting snapshot of entrepreneurship in Africa and the interests of and challenges facing young entrepreneurs.
These programs perhaps might be helping to fuel an increase in interest in starting agri-businesses. The applications to the Tony Elumelu Entrepreneurship Program, which is in it’s second year, seem to validate that hypothesis. Agriculture was the most popular sector among applicants to the entrepreneurship program in both 2015 and 2016, according to the foundation.
While education, commerce and retail, and ICT were the next most popular in 2015, fashion made it to the top five most popular fields in 2016.
“From tech-based agriculture to running a fish farm to processing cassava, the vast majority of the applications we receive are in agriculture,” said Parminder Vir, the CEO of the Tony Elumelu Foundation. The focus on agriculture is a natural one as the foundation doesn’t give preference to any sector, gender or geography during the application process, she added.
2. Women entrepreneurs.
Women entrepreneurs may be on the rise, or at least the number of female applicants this year to the entrepreneurship program was up from 2015, despite still being below 50 percent. This lower number can be attributed to different cultural norms and stereotypes.
“Women are running businesses but they don’t call themselves entrepreneurs,” Vir said.
To break through the barriers, the foundation focused on increasing awareness about its entrepreneurship program among female entrepreneurs and business owners. They published ads on different social media networks including Facebook and LinkedIn, she said.
“We invested a huge amount of resources in our media and communications strategies to reach women,” Vir said.
And the result was not disappointing. In 2016, 36 percent of the 45,000 applications were from female applicants, up from 24 percent of applicants in 2015.
3. Young entrepreneurs are interested in the Sustainable Development Goals
These entrepreneurs are also interested in solving the world’s most pressing problems, which was highlighted in the business ideas the brought to the entrepreneurship program.
The top SDGs the entrepreneurs self-identified as their focus include: creating decent work and fostering economic growth; good health and well-being; boosting industry, innovation and infrastructure; and eradicating poverty.
4. Accessing finance is still a challenge.
Entrepreneurs continue to have trouble accessing finance, which is why the entrepreneurship program provides seed capital to the entrepreneurs who complete a 12-week training course that culminates in weekend boot camp that brings all 1,000 of them together in Lagos, Nigeria.
“Entrepreneurs need to go through that challenge before they can get the seed capital,” Vir said. The objective is also to change the mindset of the young entrepreneurs who expect to “go from having an idea to accessing funding”.
The first round of $5,000 is a grant for proof of concept. Entrepreneurs can apply for the second round of funding, which is a $5,000 loan the foundation can choose to convert into an equity investment.
Part of the training process is introducing entrepreneurs to mentors who can support them and help them understand what type of capital they need when and how to present themselves to banks or investors, she said.
Despite that training slow investment decisions continue to delay some businesses. For example, Kassa’s passion aimed at growing the Gabonese agri-food sector has been stalled due to a lack of funding and a delayed investment. He was able to buy four hectares to start a sweet potato farm but he has been unable to secure a bank loan — one bank strung him along for four months before denying his loan request — to buy machines he needs to process the potatoes into chips.
He’s found himself in a tricky position. The bank told him that they would reconsider financing his business when it starts production but he needs the financial support to buy the machines needed for production, Kassa said.
He harvested his first crop and sold it at the market unprocessed. While that sale raised some money it wasn’t enough to buy the machines, so he is exploring other sources of funding.
5. Entrepreneurs are not working in isolation
In its two years of existence, the foundation’s entrepreneurship program has recruited 2,000 young entrepreneurs who are encouraged to build relationships with one another instead of working in isolation.
“I’ve got some connection in Cameroon, Nigeria, and most of these African countries,” Kassa said, adding that, they keep in touch and talk about ideas.
During the boot camp that took place in Lagos in October, this year’s group of entrepreneurs had an opportunity to mingle with the past participants of the program as part of growing alumni engagement efforts to continue to provide access to resources and mentorship.
“We have appointed [a] seed capital manager to help track the impact of the program from a financial point of view and also from the health of the enterprises that we are investing in,” Vir said. This will also involve measuring job creation and revenue generation, which is part of the goals set by the program.
Jennifer Ehidiamen is a Nigerian writer who is passionate about communications and journalism. She has worked as a reporter and communications consultant for different organizations in Nigeria and overseas. She has an undergraduate degree in mass communication from the Nigerian Institute of Journalism, Lagos, and M.A. in business and economics from Columbia University Graduate School of Journalism, New York. In 2014, she founded Rural Reporters (www.ruralreporters.com) with the goal of amplifying underreported news and issues affecting rural communities.
Subscribe to Devex Newswire
Top international development headlines emailed to you every day