ENTREPRENEURSHIP
Increasing Importance Of Entrepreneurship In Africa
By Walter Nyabundi
More and more , entrepreneurship is seen as key to Africa ’ s economic growth . In 2013 , according to a report by the Global Entrepreneurship Monitor ( GEM ), the world ’ s top average entrepreneurship rate was found in Zambia . Indeed , 41 percent of Zambia ’ s adult citizens were at the time in the process of starting or were already running new businesses , according to GEM ’ s “ Total Entrepreneurship Activity ” metric . Other Sub-Saharan nations-including Angola , Botswana , Ethiopia , Ghana , Malawi , Nigeria , and Uganda - were noted to be similarly entrepreneurial , making Africa GEM ’ s global leader in entrepreneurial activity a decade ago .
Entrepreneurship is now an imperative as African economies confront the greatest challenges to their survival in the last two decades due to recent global upheavals , not least the Covid-19 pandemic . The pandemic hit African economies hard ; there was a dramatic fall in trade , supply chains were disrupted , remittances dwindled , and tourism all but came to a halt . Indeed , the Covid-19 pandemic pushed nearly five million workers and their families in sub-
Saharan Africa into extreme poverty due to working hour losses equivalent to 13.5 million full-time jobs according to the International Labor Organization ( ILO ) flagship report World Employment and Social Outlook : Trends 2021 .
The report noted that the employmentto-population ratio ( EPR ) in sub-Saharan Africa had declined by two percentage points due to the Covid-19 pandemic . The ratio is defined as “ the proportion of a country ’ s working age population that is employed . A high ratio means that a large proportion of a country ’ s population is employed , while a low ratio means that a large share of the population is not involved directly in market-related activities , because they are either unemployed or ( more likely ) out of the labor force altogether .”
The ILO consequently downgraded its 2022 labor market recovery forecast in its flagship report , World Employment and Social Outlook Trends 2022 . The organization projected a continuing major deficit in the number of working hours compared to the pre-pandemic era . The EPR ratio is projected to remain well below
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Entrepreneurship must now be seen as the most viable and sustainable way of creating jobs in Africa . Several experts opine that entrepreneurship largely driven by technology is what will drive the African continent in its next phase of development . its pre-crisis level through 2023 , which should give policy makers pause given the long-term employment trends in sub- Saharan Africa prior to the pandemic .
Women accounted for the lion ’ s share of net job losses , partly because of their overrepresentation among informal workers . Informal workers were heavily affected by lockdowns and workplace and border closures . Even if employment recovered to pre-crisis levels , employment growth is set to remain limited since employment growth especially in sub-Saharan Africa has mostly consisted of subsistence agriculture and self-employment , often in the informal sector .
Indeed , the pandemic reversed a lot of the progress made in reducing poverty in Africa by driving up the share of workers living in extreme poverty , especially young people . According to the ILO ’ s Global Employment Tends for Youth 2020 : Africa report , “ young people in Africa are confronted with multiple challenges ranging from economies that grew but could not create sufficient jobs prior to the global financial and economic crisis to sluggish growth post the crisis in part arising from adverse weather conditions and poor commodity prices .”
The report notes that “ Africa is the only region where the youth bulge will continue to grow in the foreseeable future , presenting both an opportunity to reap the demographic dividend and an imminent time bomb and threat to social cohesion as well as massive migration in search of opportunities if appropriate policies are not implemented to harness the dividend .”
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