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Entrepreneurship is central to Africa’s future economic development

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Speaking at the Africa Transformation Forum in Kigali in 2016, Mr Kelvin Balogun, President of Coca-Cola, Central, East and West Africa said, “Almost half of the 10 million graduates churned out of the over 668 universities in Africa yearly do not get jobs.”  This is frightening. African countries are sitting on a time bomb. There is need to find something for these graduates to do. One way of addressing this problem is by promoting entrepreneurship among the graduates. Key to this would be an appropriate education system that promotes entrepreneurs and not employees.

Most education systems do not have entrepreneurship in their curriculum. Students are being trained to work for someone and not to be employers in their own right. Even parents and society view being employed as a great achievement and tend to shun entrepreneurs because of the risks involved.  Entrepreneurs are key for economic development and governments should therefore put emphasis in creating a conducive environment in which budding entrepreneurs can shine.

The policies in place and the funding should be geared at promoting the emerging of entrepreneurs. There are a lot of benefits that a nation will get by promoting entrepreneurs. Countries like the USA, Canada and Australia promote entrepreneurs and as a result their economies are flourishing.  What role do entrepreneurs play in the economic development of countries? Research indicates that entrepreneurs are the engines of job creation and economic development.

Their impact on the economy is at times underestimated because the businesses will be small as they start. However research has shown that in the US entrepreneurs contribute significantly to job growth and economic development in the United States.  The research carried out found that an estimated 50 million people are employed by entrepreneurs, and this is slightly more than 25 percent of the working population of the United States.

Entrepreneurs impact positively on a number of sectors of the economy and the community and the community they operate from.
We often attribute more job creation to the large industry players because we see them providing jobs en masse. What we however fail to appreciate is that the entrepreneurs have the capacity to create jobs, not only within the local community, but within the whole country because through innovation, some of these entrepreneurs may grow into rapid-growth firms, which may create perhaps hundreds of jobs and become industry leaders of tomorrow.

Think of Microsoft, it started very small but now it has spawned the whole world and has created lots of jobs. This is as a result of the innovative prowess of entrepreneurs. Initially though, the entrepreneurs might not offer better jobs than the large firms in terms of compensation and stability nevertheless the small firms do assist immensely in employment.
Consider the dot com companies that are producing apps for use in a number of industries. These companies end up creating huge impact on the economy because of the ripple effects and multiplier effect the introduction of that app will have on the economy.

Uber for example started with an app to provide taxis service. The result of this has been a lot of unemployed people hooking on to this project and getting employed as they are providing taxis services.  Entrepreneurs play a very crucial role in the economic growth of the local community which would otherwise be ignored by large enterprises.
Their impact is felt in the services they provide and the creation of local jobs for skilled personnel in that community. The good thing about entrepreneurs is that they offer diverse employment opportunities to a wider range of skilled professionals and tradespeople within a community.

Thus a community can maintain a heterogeneous or mixed bag offering of work skills rather than if it were a large organisation it would only be offering jobs for particular skills rather than to a varied array of skills. Entrepreneurs also play a critical role in improving the quality of life for the community they operate from. By employing the local people the entrepreneurs help in improving the standard of living of that community.  The locals in that community will begin to have disposable income which they will use in the shops within their locality thereby ensuring the shops become viable.
A lot of residents are usually engaged in what might be termed “economic travel” to nearby centres for commercial purposes because the services they will be looking for are not found in the local community.  However once entrepreneurs start providing the same services the local community will save their hard earned funds and use them for more productive activities.
Thus by encouraging the development of diverse entrepreneurs the country will stimulate the local economy by retaining income within that community and in the process attracting new residents. Entrepreneurs have been known to produce a lot of patents on new innovations. This does boost the introduction of new products on the market. Usually when entrepreneurs are first established, they provide an opportunity for the business owners to test their business ideas in the market. They obviously have to protect their ideas through patents.

If these businesses survive the rigours of the economic environment they will in the long run provide economic stability for owners and their families. They will provide a steady source of income to business owners and employees.  Innovation is very possible in entrepreneurs because employees usually work closely with consumers and therefore learn first-hand about their needs and thereby develop ways to attend to those needs.  Innovation is encouraged in small organisations because there is less bureaucracy which usually frustrates employees from putting their ideas into action. Also entrepreneurs are not afraid to take risks by being innovative.

Entrepreneurs contribute also to the fiscus through corporate taxes and income taxes for their employees.
If entrepreneurs contribute so much to the economies and the communities they operate from then a conducive environment should be created.
Governments should ensure that entrepreneurs are getting the resources they need to grow: that is, finance and good infrastructure and favourable policies. The environment is ever changing and is very dynamic.

We need to do something that will not only help entrepreneurs succeed, but thrive in an ever changing economy. The small entrepreneurial firms should have access to capital to fund their projects. Access to business advisors would also be extremely invaluable.  The tax authorities should come up with smart regulations and tax structures that are particularly aimed at giving entrepreneurs a boost and a better chance of survival.  Export economic zones should be set up for these budding entrepreneurs to start their business and export to other countries.
The economic zones should have certain tax concessions that will ensure that these entrepreneurs don’t get stifled in the growth of their ventures.

Business associations and the government should come up with programs to support the entrepreneurs around the country so that they gain the necessary tools they need to be sustainable and become profitable ventures. The future of Africa will be owned and operated by entrepreneurs.
Stewart Jakarasi is a business & financial strategist and a lecturer in business strategy and performance management. He provides advisory and guidance on leadership, strategy and execution, preparation of business plans and on how to build and sustain high-performing organisations.

l For assistance in implementing some of the concepts discussed in these articles please contact him on the following contacts: sjakarasi@gmail.com or +266 58881062 or on WhatsApp +266 62110062

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Jobs galore for Lesotho

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94 000 jobs.

That is what the Millennium Challenge Account (MCA-Lesotho) will create in the next 10 years, according to Prime Minister Sam Matekane.

The MCA-Lesotho was created by the Lesotho parliament last year after the United States’ Millennium Challenge Corporation (MCC) found Lesotho eligible to receive development funds.

The MCC gives development grants to poor countries that respects democratic principles and human rights.

The MCC has unlocked a staggering US$322 million (over M5 billion) to the government of Lesotho after the country enacted three laws the protect people’s basic rights this week.

Matekane advised youths to visit MCA-Lesotho offices to understand how best they can benefit from the fund and the projects that will be financed.

The MCC’s investments are aimed at increasing the availability of water for household and industrial use, enhance watershed management and conservation methods, rehabilitate health infrastructure and strengthen health systems, and remove barriers to private investment.

The MCA-Lesotho’s Health and Horticulture Compact seeks to assist the country in unlocking equitable and sustainable economic growth in partnership with the private sector by addressing key constraints to growth.

Matekane said the job creation potential of the horticulture project alone is estimated at 4 000 jobs.

This excludes indirect jobs that will be created through packaging supplies, logistics, cold chain activities as well as the processing of the output.

“Let us all be ready and ensure we spend all the funding that is available,” Matekane said.

He said the money is going to be invested in agriculture, trade and industry, value chains, infrastructure development, tourism and creative sectors.

“The Compact has come at a critical time when the country is in dire need of financial injections to revive the economy,” he said.

“This second Compact forms the core of Lesotho’s private sector-led economic growth, recovery and job creation agenda.”

He said the MCA staff should work diligently, to implement this Compact.

“There are several Basotho businesses out there that are eager to seize the opportunities that the Compact brings,” Matekane said.

“Serve them with integrity, accountability and dedication.”

Matekane said the government has established the Cabinet Sub-Committee on the Compact which is under the leadership of Deputy Prime Minister Nthomeng Majara.

The sub-committee is mandated to ensure that the government provides overall oversight, strategic direction and support for successful implementation of the Compact.

He said he expects the MCA-Lesotho to ensure the full implementation of the project within the next five years.

“Our economy needs this capital injection to boost productivity and job creation,” Matekane said.

Matekane said the government had to enact three pieces of legislation which were necessary to support the investments that the MCC is making.

The enacted laws are the Labour Code Amendment Bill, the Administration of Estates and Inheritance Bill and the Occupational Safety and Health Bill.

Majara Molupe

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Bank spearheads career expo

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Standard Lesotho Bank will tomorrow host a career expo at the ’Manthabiseng Convention Centre for high school students who will sit for their final exams this year.
The 14th Annual Standard Lesotho Bank Career Expo was launched in Mokhotlong on Monday where the Lesotho Highlands Development Authority (LHDA) welcomed students in areas around the Polihali Dam construction site.

On Tuesday the expo was at the Butha-Buthe Community High School, yesterday it was at Assumption High School in Teya-Teyaneng while today it is in Quthing at Holy Trinity High School.

The five-day nationwide event is dedicated to connecting ambitious Basotho youths with exciting career opportunities.

Standard Lesotho Bank says it’s career expo “is a cornerstone of the bank’s commitment to empowering Basotho youth and shaping the future of Lesotho’s workforce”.

The 2024 edition of the event is the 14th where the bank is now the headline sponsor of this important expo that reaches about over 10 000 students countrywide.

The expo promises to be an even better offering where over 35 institutions of higher learning from Lesotho and South Africa as well as professional bodies will explain different career options to Basotho students.

Standard Lesotho Bank communications manager, Manyathela Kheleli, said students in Mokhotlong did not only learn about different engineering disciplines but got to appreciate engineering in action at Polihali.

He said it was a lifetime experience for students from Mokhotlong, “thanks to the collaboration with LHDA, who are fully responsible for the Polihali leg of the event”.

There were also motivational speakers from different professions in the bank and other selected institutions.

Key influencers in the football fraternity, former Likuena captain and now Corporate Responsibility Manager at Letšeng Diamonds, Tšepo Hlojeng, and former Orlando Pirates dribbling wizard, Steve Lekoelea, are among the influencers that have been invited to address the students.

The event is a sponsorship initiative under Personal and Private Banking that is open to all youths, communities, and individuals, where the bank intends to use this event to drive the new Youth or student Customer Value Proposition and attract high school students to open accounts ahead of their enrolment into tertiary institutions.

The objective of this sponsorship is to first create an environment where future leaders of Lesotho will be nurtured and informed of top career choices that demonstrate various skills requirements for the growth of Lesotho’s economy.

Secondly, the career expo is a clear demonstration of the bank’s intention to put youths at the centre of its initiatives.

This position is shown by the bank’s initiative to not only develop special products for youths, such as the Youth Account but also through several initiatives that promote youth empowerment. These include the bursary scheme and the Bacha Entrepreneurship Project.

“We are more than a bank for our youths, but a good corporate citizen and a partner for the education for Basotho,” Kheleli said.

“We believe that as we grow our youths, they will become assets to this country and by extension, develop into a feeder market for our banking products when they enter the job market,” he said.

The bank has invested M150 000 towards sponsorship of the annual Career Expo.

Staff Reporter

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Ministry launches fresh industrialisation drive

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A new policy to drive industrialisation in Lesotho was launched in Maseru this week.
The Lesotho National Industrialisation Policy 2024–2028 is being spearheaded by the Ministry of Trade.

The ministry says the policy seeks to accelerate economic diversification in the industrial base, enhance productivity and productive capacity for industrialisation and advance domestic and regional value chains for industrialisation.

It also seeks to promote and develop industrial clustering, promote inclusive industrialisation, support entrepreneurship development and strengthen business linkages.
The new policy will also seek to enhance energy efficiency and sustainability, promoting technology adoption and innovation, services-based industrialisation, and stimulating agro-based industrialisation.

This is not the first time Lesotho has launched an industrialisation policy. Previous policies have all failed.

The first attempt was the 2015–2017 industrial policy, whose aim was to accelerate the industrialisation agenda and address key challenges facing the country.

The second one was the 2018–2023 policy, which after its unsuccessful execution during the three years of implementation, the government extended it to the National Strategic Development Plan Strategic Focus (2023/24-2027/28).

The new industrial policy’s target is set to activate implementation on innovation to enhance the efficiency and competitiveness of domestic industries, create decent jobs and improve the welfare of Basotho.

Thabo Moleko, the Ministry of Trade Principal Secretary, said the implementation of the new policy is set to deepen economic growth, promote industrialisation and enhance competitiveness.

“The plan includes greater investment in industrial development with the intention to create employment and incomes while building on maintaining the existing industrial trade,” Moleko said.

Mamello Nchake, a consultant for the United Nations Economic Commission of Africa (UNECA), said the development goals of the industrial policy are set to ensure an achievable inclusiveness and equitable growth as they aim to create sector-led quality jobs for Basotho.

Nchake said the goals are meant to “develop and maintain enabled infrastructure that is critical to the private sectors and also to promote gender equality, environmental and climate risk management”.

“Moreover, the policy (will seek to) harness the collaboration with private sector firms to address common challenges and promote industrialisation,” she said.

The workshop discussed constraints that hindered the implementation of the 2018 – 2023 policy that undermined investment and trade opportunities.

The constraints include access to land for investment, inadequate provision of infrastructure, an outdated and a lack of appropriate regulatory environment, low productive capacity, market size and topological constraints, unstable macroeconomic environment, external factors, and over-dependency of trade preferences.

To address the strategic objectives, the previous industrial policies had proposed tax incentives for industrial development, trade policy and regional integration as the main vehicle for industrialisation and structural transformation.

They had also proposed mechanisms for policy coordination and implementation, institutional alignment and linkages.

However, several key challenges were identified in the implementation of the 2015-2017 industrial policy.

They included limited financial and investment capacity to effectively implement the industrial policy actions.

“Financing instruments are not aligned with the level of development needs of the private sector,” stakeholders heard at the workshop.

They also heard that there is “persistent dependency on few industries that poses risks in the face of global economic uncertainties and ever-changing consumer preferences”.
Another identified problem is limited investment climate that makes it costly for foreign firms to invest in Lesotho.

It was also observed that a shortage of specialised education and skills crucial for growth of industries impact the ability of firms to adopt advanced technologies and improve productivity and the productive capacity.

Stakeholders also heard that there is limited global competitiveness and access to global markets.

Lesotho’s industries, they heard, particularly textiles and garments, face competition from other low-cost manufacturing countries.

The country is also spooked by poor coordination between the implementing agencies due to a lack of a clear implementation framework.

Khahliso ’Molaoa

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