According to several studies, investments in youth entrepreneurship are crucial in unlocking opportunities in the world’s fastest-growing economy.
New businesses that very young entrepreneurs create have the potential to drive and shape innovation, speed up structural changes in the economy, and introduce new competition into existing markets. Investors and business leaders considering to enter Africa remain sceptical about making bets on the continent. There are misconceptions on whether Africa’s very young entrepreneurs have the potential of being profitable investments.
Here are five reasons why investing in African youth-owned businesses is a smart bet;
They are EmbracIng Innovation and Technology Fast
Very young entrepreneurs are more daring and curious about new technology and innovations. Digital technology is now central to business operations and our way of life. In addition to being tech-savvy, young entrepreneurs’ knowledge of the local business landscape gives investors an advantage. 2019 Anzisha fellow Balbina Gullam, has been leveraging technology to give maids across Tanzania access to respectable employment. The self-taught coder has used her knowledge of local challenges and her skills to address the challenges maids and employers were facing. Balbina’s efforts demonstrate that young African entrepreneurs are not aiming to build the next Tik-Tok app, but are more focused on using technology as an enabler to address social and business challenges on the continent.
Building Businesses For Regional and Global Markets
African youths are building businesses for regional and global markets. They are aware of the implications of globalisation and the opportunities that it presents. Newman Tshepo Ramatokwane who started his journey as a very young entrepreneur 10 years ago, has built a logistics business currently transporting goods across Southern Africa with a fleet of seven trucks. Youths are more daring to think up solutions that are not confined by geographical boundaries. As the Africa Continental Free Trade Area comes into effect, investors will need partners with the ambition and courage to tackle regional markets with a demonstration of innovative business models.
They are Breaking into Regional and Global Networks
Over the last 10 years, Anzisha has been putting together an ecosystem through which very young entrepreneurs have been growing their network across the continent through other Anzisha Fellow. 2016 Anzisha Fellow, George Matemhanji recalls a time when he visited Zimbabwe to scout for opportunities and benefitted from the help of Anzisha Fellow Farai Munjoma’s networks in the country.
Their networks are not limited to the people they have met in person. They are increasingly meeting global experts and learning global industry trends without spending thousands on conferences. Investors can benefit from these networks as young entrepreneurs are constantly looking for new business opportunities without blowing conference budgets. Whether it is a franchise or a branch you are taking into Africa, a partner that has the ability to establish and maintain a global network is important.
Socially Responsible Businesses
Young founders are more likely to build businesses that incorporate social impact into their vision. Consumers globally have taken an interest in the way that brands impact the ecosystems (community and environment) that they operate in. According to a Nielsen study, 50% of global consumers are willing to pay more for goods and services from companies that have implemented programs to give back to society. This is demonstrated by the increasing number of Anzisha Fellows who have business impacting and addressing Africa’s most pressing challenges such as access to education and healthcare. For instance, 2020 Anzisha Fellow, Adjei Nyamekye, who is just 17 years old, founded Mosquito Trapping and Emergency LED Bulbs, an initiative that sells state of the art light bulbs that provide 12 hours of emergency electricity during power outages and trap mosquitoes.
Open and Broad Minded
Young entrepreneurs are more open to new ideas and advice when building their companies. They are willing to take in ideas from both younger and older counterparts. This allows the business to quickly develop and grow as they are daring to move faster into markets. There is often criticism that young founders are naive, however, entrepreneurship success has been linked to taking chances and continuously developing products as the market responds to it. According to Christ Makanga, who was part of the panel of this year’s selection process, the entrepreneur’s willingness to learn was one of the outstanding attributes in the young entrepreneurs they interviewed and worked with.
Betting on and Shaping the Future
Africa’s young entrepreneurs are taking the lead in creating the business that will be at the centre of African life in the next few years. A growing middle class with a life which is increasingly centred on technology has created the demand for new services to support their lifestyle.
Young entrepreneurs are the doorway into Africa’s now and it’s future.