7 Challenges Faced by Entrepreneurs in Africa Today

If you work with entrepreneurs in Africa as we do, you will find it easy to agree with the findings of the Global Entrepreneurship Monitor‘s findings that Africa has a stronger entrepreneurial spirit than the rest of the world. This is evidenced by the rapid growth of new businesses in the region. Global Entrepreneurship Monitor (GEM) data shows that sub-Saharan Africa has the most people engaged in TEA, with Zambia and Nigeria at the top of the world rankings in 2020.Entrepreneurs in Africa

Let’s consider some of the key challenges for early and growth stage businesses for entrepreneurs in Africa.

1. The first thing you’ll need is money to get your business off the ground.

Most African start-ups face difficulties in raising start-up capital, perhaps the most obvious of all problems. In order to expand their businesses, entrepreneurs and small business owners face numerous obstacles, including the inability to evaluate financial proposals, a lack of financial knowledge, and a lack of easy access to venture capital.

2. The infrastructure

Even though Africa’s funding challenges are being alleviated, there is still a huge infrastructure gap to be filled. In order for a business to succeed, the government must provide basic necessities such as good roads, an efficient transportation system, high-speed internet, and reliable electricity. South Africa is great example here, where the crippling Load Shedding policy has harmed the South African economy to the tune of R360 billion and R450 billion, according to Statistics South Africa. The pie chart below indicates the size of losses experienced by businesses in South Africa as a result of load shedding.

Entrepreneurs in Africa

3. Government Policies, Economic and Business Friendly Environment

Everything rises and falls with leadership, as it does in most areas of life. Depending on the sector, there are a number of government policies and regulations that make starting a business a challenge. A business-friendly environment can be created only when political leaders and policymakers constantly review their business policies across all sectors.

4. The Competition

Competition is a major problem for start-ups, especially in industries where there is already a dominant brand or a number of dominant brands. The general rule is that customers prefer to do business with companies that already have a good reputation and are well-known in their particular industry. In spite of the fact that this can be a major roadblock, it’s not insurmountable. Start-ups must make certain that their business ideas are distinctive, imaginative, and consistent within their industry.

5. Intra-African Trade for Entrepreneurs in Africa

Intra-African Trade (also known as cross-border trade) is often difficult, slow, expensive, and inefficient. In part, this is due to local laws and regulations governing cross-border payments and domestic banking systems in various African countries. In general, business transactions are slowed down because of the continent’s lack of a regulatory framework that is universally accepted.

6.We Need More Woman Entrepreneurs in Africa

Female employees make up just 27% of the workforce, according to the results of a recent survey. Only 15% of the total number of female founders were previously disadvantaged. On the plus side, the percentage of previously underrepresented male founders surpassed 50%, at 42 percent. It’s clear that having more women on company boards has a financial benefit.” Entrepreneurs in south AfricaCompanies with diverse boards outperform those without any women on them, according to research from around the world. They can expect higher returns and better financial performance overall.

7. Access to Education and Skills

There is a severe lack of qualified candidates in South Africa’s labour market because of a lack of experience, a lack of necessary hard skills, and applicants’ unrealistic expectations of pay.

64 percent of entrepreneurs lack commercialization expertise and 55 percent believe that South Africa lacks serial entrepreneurs, according to the ecosystem stakeholders who participated in the survey.

The data shows that large companies (54 percent), medium-sized businesses (39 percent), small businesses (23 percent) and micro-enterprises (25 percent) all have a shortage of employees.

Sub-Saharan Africa has the highest percentage of private businesses reporting revenue losses due to a lack of skilled workers.

Fortunately, governments and transnational payment organisations are gradually creating standardised data formats to facilitate seamless transactions.

Start-ups and entrepreneurs in Africa face no difficulties that can not be overcome. There is no doubt that the African economy needs to be developed, and we all have a role to play.

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