Entrepreneurs can lead the coming “decade of creativity” in Africa, if the continent learns to own its unique characteristics, and investors step up to support the ecosystem, according to Eric Osiakwan, managing partner at Chanzo Capital.
Speaking at the startup-dedicated AHUB event, held at pan-African tech conference AfricaCom in Cape Town, Osiakwan said Africa needs to “own” its very unique set of characteristics: it’s huge and growing population – a substantial proportion of which is made up of tech-savvy young people -, the prevalence of mobile, and the absolute dominance of mobile internet.
“We see the next generation of entrepreneurs in Africa saying ‘I can build the next Facebook’ […] You see a whole generation believing they can build the next big tech.”
This set of characteristics sets Africa up to play a driving force in innovation over the coming decade, driven by mobile technology.
“Mobile has become the new platform for creativity. So the next 10 year is the decade of creativity,” Osiakwan says.
However, more needs to be done to stimulate further growth of the motivation already emerging among the youthful population, he said.
Many of the infrastructure and major service developments in Africa to date have been achieved by private sector players. It is these successful entrepreneurs and businesses that need to step forward and support the next generation of entrepreneurs, Osiakwan says.
“Successful entrepreneurs need to start backing the next generation of entrepreneurs. We need to start passing the baton forward […] We need to start investing back into the ecosystem.”
This backing isn’t restricted to capital, however. Osiakwan says the value of sharing experience and knowledge of building businesses can’t be underestimated.
“Actually, I believe experience is more important than capital. But the combination of both is ideal,” he says. “We need more successful investors, more angel groups, and more VCs backing this generation of entrepreneurs.”
The current lack of backing from successful entrepreneurs and investors is causing a vicious cycle, holding back emerging startups, Osiakwan says. New entrepreneurs can’t raise early stage funding – due to the lack of its availability -, and as a result can’t grow their ideas into viable companies capable of accessing larger funders.
In addition, governments need to recognise the crucial economic role entrepreneurs play, and create enabling environments for them to thrive through supportive and facilitatory policies.
Osiakwan criticised the administrative requirements for starting a company, the expensive tax regimes, and oppressive lending rates which characterise many African countries.
“We’ve created an environment where it’s very, very difficult for entrepreneurs to thrive,” he said.
“The people that really create jobs are the SMEs. So government, if you want to create jobs you need to create an enabling environment for SMEs to succeed […] We need to create an environment where it’s easy to do business.”
Finally, African consumers also have a role to play in boosting the continent’s entrepreneurship trajectory, by opting for locally produced quality products.
“We need to see a market for consumption of local products […] We need to start having an appetite for local products.”