How Nigeria can become hub for start-ups, entrepreneurs
Nigeria is blessed with a sought-after demography, which has become an attraction for investors. With over 170 million people, 54 percent of which are working-class youths between the ages of 15 and 35, Africa’s largest economy has a great asset that can be transformed into huge capital. But this may, however, become a liability if the key players, particularly governments at various levels, do not provide the right environment that can support entrepreneurship.
The latest report by Ernst & Young (EY), multinational professional services firm, reveals what countries can do to create a culture for high-impact entrepreneurship. The report entitled, ‘From Classroom to Boardroom: Creating a Culture for High-impact Entrepreneurship’, was done mostly for G20 countries. But most of its recommendations are globally applicable and concern Nigeria in a great deal.
EY spoke with 1500 entrepreneurs with a view to finding out what can steer high-impact entrepreneurship around the world. Here are the key findings and recommendations.
According to the report, addressing the issue of culture, which is less tangible but omnipresent, is key to driving impact through successful and scalable entrepreneurship.
The report shows that countries with good access to finance, like the United States, often have better entrepreneurship culture. When entrepreneurship becomes people’s way of life, there will be growth of high-impact firms, which drive the lion’s share of job creation among start-ups. A recent global study shows that the top one percent of high-impact firms contribute 44 percent of total revenue and 40 percent of total jobs.
“Entrepreneurship culture is often not celebrated in the world,” said Rohan Malik, partner, emerging markets and global deputy leader, government and public sector for EY, while presenting the report last Tuesday in Lagos.
“The number of youths in a country is a great demographic dividend. But it is also a recipe for disaster. There is often this thinking that government creates most jobs. But findings have shown that government creates one out of ten jobs. Nine of these jobs are created by the private sector. Entrepreneurship is the only way of tackling unemployment and wealth creation,” Malik, who has been in over 10 countries recently with this report, said.
The respondents in the survey agreed that fostering an effective entrepreneurial ecosystem is clearly a joint effort among government, entrepreneurs and corporations, stating that each has its own role to play.
The report, also called the G20 Entrepreneurial Barometer, emphasises the importance of learning and skills for entrepreneurs. This is critical for Africa’s biggest economy, which still pays less attention to entrepreneurial education. Entrepreneurs spoken to during the survey said they would welcome a role for government, particularly in education, to provide an institutional framework that can charge the entrepreneurial ecosystem and drive sustainable gains.
“When I spoke with entrepreneurs, they said they were not given entrepreneurial education early enough,” Malik said.
“We need to raise entrepreneurial awareness in Nigeria early enough. Though there are peculiarities in different countries, but most entrepreneurs would want entrepreneurship education given to people at age five,” he further said.
Nigeria lags many countries in several entrepreneurship parameters such as access to long-term and single-digit finance, infrastructure, education, and ease of doing business, among others. But the country remains one country with a large number of creative and young entrepreneurs.
To help mitigate the impact of these challenges in Nigeria and integrate start-ups into the global market place, EY makes a few suggestions.
The EY recommends that Nigeria and other countries should create a multilateral start-up visa, such those who wish to set up businesses or those with credible business ideas will be allowed into the country without restriction. This is already being done in the United Kingdom and Canada.
Secondly, the country should encourage international networking now, as new and young entrepreneurs need the opportunity to participate in international networking and collaboration with others to exchange knowledge, mentor each other and transmit entrepreneurship culture. Young entrepreneurs need to be exposed to international markets, through trade missions, to drive their commercial education, network and also support cultural exchange, EY suggests.
“How can the Nigerian government to ensure that young entrepreneurs here can do business and network with France, India and other countries?” Malik asked.
The EY further prescribed teaching entrepreneurship education early, while also fostering start-up funding for students in tertiary schools and a student-centric approach to entrepreneurship.
EY equally prescribes focus on quality entrepreneurship and quality employment. Hence entrepreneurship should be backed with grants, celebration of successes and enablement of networks to support knowledge transfer and risk-taking. Those in employment should also be able to earn what is good enough to sustain them.
Malik advised Nigeria to pay attention to goldmines such as technology, telecommunications, agriculture, manufacturing, real estate and financial services, as these, if well developed, will create opportunities for more entrepreneurs to set up shops in the country.
“For agriculture, how can farmers have easy access to finance? How can they move their produce from farms to the market?” he asked.
“The biggest area can be agriculture as it can lead to food processing and help other areas of manufacturing. I have spoken with a lot of investors, who always say that capital is not their problem. The biggest problem is not having enough bankable projects,” he added.
He said one big challenge facing the growth of high-impact entrepreneurship in the country is that most people do not know what it takes to fund a business, adding that poor market information and bureaucracy are big thorns in the flesh of start-ups and other categories of business.
“Investors see Nigeria as a big hope. I hope government will see this as an opportunity. But Nigeria needs to compete in investments with China, with India, with countries in South America. Nigeria needs to understand the power of what she has,” he stated.
ODINAKA ANUDU