The Chief Executive Officer of
the Tony Elumelu Foundation, Parminder Vir, in this interview speaks
about challenges and opportunities for start-ups and small and medium
scale enterprises in Africa, as well as on the forthcoming Tony Elumelu
Foundation Entrepreneurship Programme that holds in Lagos next week.
Nume Ekeghe presents the excerpts:
What do you think are the challenges facing African entrepreneurs?
Entrepreneurs face enormous challenges
throughout their entrepreneurial journey. Amongst the challenges the TEF
Entrepreneurs say they face are accessing start-up capital for their
businesses. This can be addressed if banks and other formal lenders can
reduce the collateral requirements; operating costs to buy machinery,
equipment, technology or raw materials needed to operate. Power of
course is the biggest challenge; government regulation and compliance
from business registration, something government can easily fix by
setting up on stop windows for SMEs; finding, training and retaining
talent is a challenge for those trying to grow their businesses,
government should consider tax relief for SMEs to enable them to
stabilize their businesses; and business development for SMEs to access
the supply chains of the large corporates
Government is the major
driver of economy and policy maker across Africa, what kind of working
relationship do you have with governments?
The importance of government in
establishing and maintaining healthy and competitive enabling business
environment cannot be over stated. The economic ecosystem is determined
by the policies and functionality of government. Their effectiveness is
critical to the success of SMEs. The Foundation continues to engage
with government policy makers and leaders. At the fourth edition of the
TEF Forum we will welcome the President of Ghana, Nana Akufo-Addo and
President of Kenya, Uhuru Kenyatta, to engage in an interactive dialogue
with the TEF Founder, Tony O. Elumelu CON. In July this year we
welcomed President Macron of France to engage with over 2000 TEF
Entrepreneurs shaping Africa. In 2016, we welcomed President of Sierra
Leone to the TEF Forum. The Vice President of Nigeria, Yemi Osinbajo
joined the Form in 2015 and 2017 to name but a few. Over the past four
years the Tony Elumelu Foundation has played its part in helping African
governments see that innovation, entrepreneurship and economic growth
are inextricably linked. For example, Rwanda has streamlined its
business registration procedures to such an extent that it only takes 6
hours for an entrepreneur to register and be ready for operation.
Kenya’s economy has been transformed through entrepreneurship. The
Ghanaian government’s Youth Enterprise Support initiative provides young
entrepreneurs and innovators with opportunities to grow their
businesses from idea to implementation to scale. Enterprise Uganda is a
programme of the Ugandan government which offers young entrepreneurs
training and financial literacy aid as well as a credit facilitation
service that provides guidance around available sources of financing.
These few examples are proof that
attempts are being made to create entrepreneurial ecosystems that
encourage and promote business development. While establishing a quality
business environment is important, from our engagement with thousands
of African entrepreneurs, the governments also need to address the
broader issues: affordable power, reliable infrastructure, taxation,
cross border business, access to credit etc.
The Foundation participates and
supports high-profile pan-African and international business
conferences, summits, and forums to highlight the economic value of
entrepreneurship to policy makers, promote entrepreneurship as good
career choice and support the development of an entrepreneurial culture
across the continent.
What is the focus of this year’s annual TEF Entrepreneurship Forum and why this focus?
One of the most vibrant aspects of
the TEF Entrepreneurship Programme is the annual TEF Entrepreneurship
Forum. The fourth Annual Tony Elumelu Foundation Entrepreneurship
Forum, is taking place on 25th October at the Federal Palace
Hotel, Lagos, Nigeria. The Forum has grown and scale every year with
over 5,000 entrepreneurs and the entrepreneurship ecosystem players
expected to converge on Lagos for this year’s Forum.
This year, we are celebrating the 2018
beneficiaries of our Entrepreneurship Programme bringing the total
beneficiaries of our $100 million seed capital, mentoring and
world-class training to 4,470 African entrepreneurs. The forum is also
an opportunity for the entrepreneurs to engage with and learn from with
established entrepreneurs, global investors, leaders from the African
public and private sectors and developmental organisations. In keeping
with the Foundation’s track record―most recently with President Macron
of France―of bringing politicians face to face with the new generation
of young business women and men shaping Africa, the Forum will include
an interactive session with President Uhuru Kenyatta of Kenya and
President Nana Akufo-Addo of Ghana, moderated by TEF Founder, Tony O.
Elumelu. We will also launch TEFConnect, the world’s largest digital
platform for African entrepreneurs, dedicated to connecting African
entrepreneurs and the entrepreneurship ecosystem. The programme will
also include a fireside chat with TEF Trustee, Gavi Champion for
Immunisation in Africa and CEO, Avon Medical, Dr. Awele Elumelu,
Moderated by CNNMoney Africa Correspondent, Eleni Giokos, on “The Role
of the Private Sector in Furthering Economic Development across Africa”.
An interactive pitching event and judging panel with a cross-section of
judges from the private sector and development organisations.
This year’s event will be
the fourth edition, what has been the impact of the programme so far,
especially looking back at past beneficiaries and their businesses?
In just four years, we have directly
impacted 4,470 entrepreneurs, and we are beginning to see the results:
they are creating jobs, generating revenues and making a social impact
through their businesses. This year began to track the progress of the
3010 entrepreneurs who graduated between 2015 – 2017 and our study of
just 1472 entrepreneurs who responded to the survey shows they have
generated $52,486,234 after completion compared to $18,155, 241 before
they were selected for the programme. In terms of jobs, the same 1472
entrepreneurs, have created 11, 971 jobs compared to 4,034 before they
were selected for the TEF Entrepreneurship Programme. Furthermore, our
study shows that upon completing the TEF Entrepreneurship Programme, 62
per cent of these businesses are now fully operational while 29 per cent
have now become partly operational. This also explains the phenomenal
growth in jobs (15% of the entrepreneurs now employ at least 10 people)
and revenue (13% of the entrepreneurs now generate above $50,000
annually) recorded after the Entrepreneurship Programme. With regards to
gender representation, over the years, the Foundation has made it a
priority to ensure that both female and male entrepreneurs have an equal
opportunity to apply unto the programme. When the programme was
launched in 2015, 76 per cent of the applicants to the Programme were
male while 24 per cent were female. As a result, male applicants
accounted for 71 per cent of the entrepreneurs eventually selected into
the programme while female applicants accounted for only 29 per cent.
Given this significant gender disparity, the Foundation developed
strategies to create awareness about the programme amongst women and
encourage them to apply for the programme. To achieve this, the
Foundation ensured that advertisements and promotions of the programme
were targeted towards women. On social media, profiles of successful
female entrepreneurs on the programme were used to encourage aspiring
female entrepreneurs to apply to the programme. Female alumni of the
programme took this a step further by organising workshops and trainings
to assist them in their application. The result of all these activities
was that by 2018, the gap had significantly reduced, male applicants
accounted for 58.8 per cent of total applicants (down from 76% in 2015)
while female applicants accounted for 41.2 per cent (up from 24% in
2015). Similarly, in terms of selection, the number of selected male
applicants fell to 65 per cent, (from 71% in 2015) while selected female
applicants increased to 35 per cent (from 29%) in 2015.
In terms of the impact of the Seven
Pillars of the TEF Entrepreneurship Programme, the 1472 entrepreneurs
who responded to the survey, we saw that both the 12-week enterprise
tool kit and the mentorship received at least a 70 per cent high impact
rating while 61 per cent of them indicated that TEF provided them with
the first seed capital for their business. So clearly, the TEF
Entrepreneurship Programme is having an impact. We will be launching the
TEF Entrepreneurship Programme: 2015-2017 Progress Report at the TEF
Forum on the 25th October, which will provide deeper analysis and insights of impact across sectors, regions and business location.
But beyond the annual forum, do
you have a follow-up mentoring programme that allows the beneficiaries
to draw continuous support from your ogranisation and enables your
organisation to also track the progress of the beneficiaries?
Paramount to the success of TEF
Entrepreneurship Programme is our continuous engagement with the
entrepreneurs who have successfully completed the programme because we
are building to last. We maintain contact with the entrepreneurs both
online and offline. Through the online TEF Online Hub, we have built
Africa’s largest online network of African entrepreneurs for cross
border business growth, skills, and knowledge sharing. TEF Hub is the
go-to destination for TEF Alumni and our value-add partners, who provide
ongoing products; business information, advisory services, innovation
capital, market access, skills & training, and supply chain
integration for TEF Alumni. This is also the platform through which we
promote the emerging entrepreneurship networks across Africa and
globally, important for business opportunities, building cross country
networks and fostering a culture of entrepreneurship.
In 2017, we launched TEF
Entrepreneurship Awards to recognise the achievements of TEF
entrepreneurs from the 54 African countries to raise their profiles and
inspire investors and policy-makers to recognise and support African
entrepreneurs. We also launched TEF Forum Pitch Competition and we have
added TEF Africa Market Place to the TEF Forum where TEF Entrepreneurs
can showcase and sell their products and services to a diverse and
inclusive pan-African gathering. At the TEF Forum 2018 in October the
Foundation will launch TEFConnect, Africa’s largest digital platform,
connecting African entrepreneurs globally. Positioned as the “Facebook
for African Entrepreneurs”, the platform will provide three main
benefits to its users, among others, to empower African entrepreneurs to
buy and sell across countries and regions in Africa’s largest digital
marketplace with digital traffic reaching millions of people; access
free business tools such as financial planning calculators and marketing
templates and enable entrepreneurs to promote their businesses to
potential investors and other partners. Through TEFConnect, we are
scaling our impact by connecting African entrepreneurs all over the
world on a single platform and increasing trade opportunities.
How easy is it for the
beneficiaries to leverage on your connection to access additional
capital from banks and other sources across Africa and beyond?
Access to finance remains one of the
biggest challenges for African startups and SMEs. To enable TEF
entrepreneurs to access capital, we have formed a range of diverse
partnerships with financial services providers and investors to mobilise
both early stage and growth stage financing.
Contrary to the perception that African
start-ups are risky investments, we have ample evidence that they are
bankable provided they are given the right business development support
as proven by our entrepreneurship development programme. Based on this
we have encouraged commercial banks to embrace SMEs and to set up SME
desks as part of their services.
We have signed a partnership with Agence
Francaise De Development (AFD)to provide risk guarantee scheme with
United Bank for Africa (UBA). In 2018, we will further diversify and
deepen the partnerships between financial services providers and
investors with the TEF entrepreneurs.
Through our engagement with African
start-ups, we are aware that financial literacy is the weak link and we
have enhanced our financial management modules to support them. We are
also aware that the finance sector also needs to be educated to better
serve start-ups and are working with angel networks, promoting public
private grants and technical assistance, venture capital, private
equity, and financial institutions. TEFConnect will build an investor
network on the digital platform.
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