Business Opinions

Africa Needs African Entrepreneurs

Written by Ujamaa Team

By Magatte Wade

In the past year, the global media has finally discovered that millions of people attempt to migrate to Europe in small boats. Growing up in Senegal, I’ve known about this my entire life. There are Senegalese TV dramas in which the plot line consists of families trying to talk their young people out of attempting the trip to Europe (but of course the young go anyway). Middle Eastern and African people traveling to Europe in small boats is not a new phenomenon, folks.

While the Syrian refugee crisis has appropriately focused attention on war refugees, the problem is much larger and longer lasting than the Syrian crisis. While 2015 saw hundreds of thousands of Syrian refugees seeking asylum in Europe, for decades hundreds of thousands of economic refugees have fled Africa seeking jobs in Europe. Until we succeed in creating jobs in Africa, we can expect these immigration pressures to continue to increase.

Why are so many African people willing to risk death at sea? Because they are poor. Why are they poor? Because there are no jobs. Where do most jobs come from, in economies around the world? Small and medium-sized enterprises (SMEs). Who creates these enterprises? Entrepreneurs. Thus what do we need to do to help create more jobs, and thereby reduce poverty and emigration? Support developing world entrepreneurs.

As is the case with many Africans who come to the U.S., I began my career in the corporate sector. But upon returning to Senegal, I realized I had to help my people back home.

This image maps the journey of a Senegalese man, Demba, who tried numerous times to leave Senegal. Demba is one of thousands who try every year to go by boat to Europe with the hope of a better income and life, but who more often then not end up either in prison, or worse yet, drowned at sea. (Jim Goldberg / Magnum)

After giving away money for years, I realized that the only sustainable, scalable approach to helping my people was through entrepreneurship. I first created a beverage company that sourced hibiscus from Senegal, reviving the Senegalese hibiscus sector and thereby supporting hundreds of jobs. I have now created a skin care company, Tiossan, that both sources ingredients from Africa and is in the process of developing a production facility there.

But the fact is it is difficult to do business in Africa. On the World Bank’s 2016 Doing Business index, Senegal is ranked 153 out of 189 — and many other nations ranked towards the bottom are African. Getting anything done in Senegal is often like swimming through molasses.

When I set up operations there again, I knew that I would have to spend an inordinate amount of time going from government office to government office, setting up appointments with officials who don’t show up over and over again.

For example, to set up an electricity account for our office there, we had to go to the Senelec agency (a government agency) multiple times with the appropriate paperwork and deposit. But no one could tell us when we would have an account and lights in our building. After my assistant made many unfruitful trips there, I finally decided to go myself and find out what was going on. When I got there, imagine my surprise at the line of people waiting. Some told me the have been waiting for hours. But while some were waiting, others were coming in and being able to go directly in the office of the supervisor.

As you may imagine, those who have no connection must wait for their turn. But their turn never comes, because those with connections drop in anytime and get received right away. I finally asked to see the supervisor, who agreed to see me. When I asked when we would get electricity, he pointed to a huge pile of paperwork, which contained all the applications for new accounts for that district. There were probably a hundred of them on that table.

I understood quickly that I had to do something if I did not want to stay in limbo for eternity. So I used all the skills of persuasion I have learned over the years, explaining I had a business to run and was paying rent for an office I couldn’t use yet. He finally agreed to assign us a meter. After some more difficulty finding a certified technician — which cost more money and time than it should have — we finally got a meter and electricity.

Senegal. Dakar. 2012. (Bruno Barbey / Magnum)

Getting electricity through inefficient government bureaucracies is but one example. When one sets up a legal business in Senegal, one also needs to have key business documents notarized. In the U.S., getting documents notarized is cheap or free. But in Senegal, it requires paying an attorney hundreds of dollars. The millions of informal sector entrepreneurs in Senegal don’t bother to go through such formal channels. They just buy and sell on the street, usually without legal authorization. As long as they stay small, they usually get away with it (though they may have to pay routine small bribes to do so). But in order to create scalable businesses that create jobs and prosperity, it is essential to set up legal operations.

As a consequence, it is much simpler for me to manufacture Tiossan products in the U.S. than in Senegal. Labor costs are much higher, but the obstacles to business are much lower. This level of red tape is typical in Africa — and is why most African economies remain stuck at the level of selling raw commodities, rather than value-added goods and services.
The more complex the production process, the more obstacles to doing business. When one considers the manufacturing process, it is necessary to build buildings, hire employees, and actually create products. At each step, permits are required, bureaucrats may ask for bribes, etc.

No nation has ever created millions of middle class jobs by selling raw commodities alone. We need to streamline the business environment for Africa to become prosperous.

SENEGAL. 2008. (Translation) “I am 32 years. I was a fisherman. My father was a fisherman, as was his father before him. After years of struggle, the fish ran out. My 5 brothers have left my country and came back wealthy men. I thought, why couldnÕt I do the same? So I tried to leave. The first time we were 80 in a boat. We had to turn back. Only 30 survived. The second time we were 80 again. The waves flooded the boat. Everyone got sick. 5 people died including my brother, so we turned back. The third time we were 100 people, and after 6 days we got sick and crazy in the head. The police caught us and brought us back home. At this point it is better to stay here. Thank you for listening. Cheikh Faye. Dakar, Thiaroye Sur Mer. 30 October 2008.” (Jim Goldberg / Magnum)

Many of those who are socially conscious are concerned that the environmental and human costs of Chinese development have been too extreme. As a boss, I could never treat people the way I’ve heard many Chinese companies have treated their employees. (For but one example of media on this, see this New York Times story about Apple workers.)

I’d like to think that I’m instead part of a new wave of conscious entrepreneurs, committed to social and environmental responsibility as we do business in Africa.

Until now, many of these “conscious entrepreneurs” have been young white people who have come to the Global South, discovered our products, and built successful businesses out of them. For instance, South American yerba mate has been promoted by the company Guayaki, Brazilian açai by Sambazon, and Chinese goji berries by Himilania. Each of these companies was founded by a young white entrepreneur who discovered healthy new ingredients in developing nations and built a business around it.

To an extent, I respect this process.

But how much more powerful would it be if we also supported indigenous entrepreneurs in creating such products and companies rather than just the white outsiders? I know dozens of African entrepreneurs at various stages of development who would benefit from additional support. They face the harsh business conditions within Africa and typically do not have the rich support networks that exists in the U.S. and Europe — and as such are at a severe disadvantage.

Senegal. Dakar. 2012. (Bruno Barbey / Magnum)

Inthe past sixty years, governments have spent hundreds of billions in aid to Africa. NGO activity in Africa has become such a joke among locals that there is actually a Kenyan sitcom called The Samaritans, and a card game created by a Ugandan, Jaded Aid, that laughs about the dynamic between white NGO workers and locals. Meanwhile, China and India are gradually becoming middle class nations — thanks in part to entrepreneurial value creation.

Is it possible for Africa to be launched into middle class prosperity with dignity and respect? If so, it will be done by supporting conscious African entrepreneurs to create successful companies while also working to improve the business environments of African nations.

Next time you see a boatload of human beings with dark skin, consider investing in an African entrepreneur or purchasing an African-sourced product and thereby support a sustainable solution to the jobs and poverty crisis in Africa.

Source: Medium

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