African business leaders expect start-up boom
Africa
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29 Jun 2022
But cumbersome regulations and internet connectivity to address the digital skills gap could hold back expansion.
African business leaders are predicting a boom in start-up businesses across the continent as the number of working age people launching new firms expands.
This is according to new research released by blockchain-based MNO World Mobile.
The study, based on engagement with African business leaders from companies with combined annual revenues of more than US$6.75-billion, also found that nearly seven out of 10 (69%) of senior African business executives believe that will more than double in the next five years.
Introducing its research, World Mobile referenced fDiIntelligence.com which states that before the pandemic, around 22% of working age adults in Africa started new businesses.
But World Mobile’s research among senior executives based in Angola, Botswana, Cameroon, Ethiopia, Ghana, Nigeria, South Africa, and Tanzania, found they expect that number to grow.
Moreover, according to Startup Genome, start-ups across the continent are currently valued at around US$7.6-billion - around 0.2% of the total US$3.8-trillion value of start-ups globally.
World Mobile’s findings suggest that more than two out of five (43%) business leaders believe around a quarter of working age adults will have started their own businesses within five years. Almost all (97%) questioned expect the rate to increase from the pre-pandemic 22%.
However, business leaders are concerned that new business creation could be blocked by cumbersome regulations and a lack of digital skills due to poor internet connectivity seen as the biggest issues ahead of limited funding and fragmented markets.
They are hopeful about improvements - 70% expect the regulatory issue to become less of a problem over five years while 60% believe the digital skills gap on the continent will close.
Micky Watkins, CEO of World Mobile said: “The numbers of Africans starting their own businesses pre-pandemic was already very impressive and it is interesting to see that senior business leaders across the continent expect even more expansion.
“More than doubling the value of start-ups on the continent over the next five years will have a major impact on employment and standards of living and governments are working hard to make this happen by removing regulation and addressing the digital skills gap.”