At a time when most Africans look up to their government to solve a myriad of challenges, the solutions could lie elsewhere- With our entrepreneurs. But first, we must create conducive conditions for them to thrive.
Let's avail capital to them. In this, we need to establish a venture capital scene in Africa. While banks usually lend to established businesses, they usually do not lend to businesses that are just starting off and are in the idea stage. One of the critical factors that made Silicon Valley in the US to develop is that there was readily available capital for starting businesses to tap into. Venture capitalists make their money by taking a stake in the company they are investing in in order to ward off the risk. Make no mistake, the failure rate in starting businesses is high. However, these businesses usually just need tiny amounts to start, therefore a venture capitalist can invest in many tiny startups. One of them could just prove to be a jackpot. How much do you think early investors in companies like Google and Facebook are worth? Billions of dollars. But they made losses along the way, before finding their jackpot. This is one area that African investors haven't tapped into.
Once we avail capital to businesses, we need to provide markets. This is a challenge to our African entrepreneurs. Let's not just copy paste ideas from the West. We need home grown solutions to the unique challenges that we have. African governments can also assist in this. They can close off competition. For instance, Google and Twitter are banned in China, creating space for local internet giants Baidu and Weibo respectively. We can do this in Africa.
Once we do this, there will be more large scale African businesses, providing taxes and millions of clean decent and rewarding jobs. At the moment, we limit African businesses to the low end of the value chain and this should stop if we are to emancipate the continent economically.
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