I have been lucky to be close both as an observer and participant in Africa’s entrepreneurship scene for the last decade. Although Africa has registered successes, the failures have been soul-crushing. In those 10 years, we are speaking of thousands of small businesses that were started and didn’t get to see their first anniversary. The rate of attrition of businesses in Africa is exceptionally high. Business in Africa is not where you go to succeed, it’s where you go to run bankrupt.
Thus, Africa’s business scene has continued to be dominated by the same big wigs that were present at the time of Independence. Multi-national companies have continued to have a field-day in Africa, while the indigenous enterprises have continued to cycle through to the burial pits. Thus, it’s been a play between the bankers, the big multi-national companies and government. The other tiers have been playing escort and falling off during this decade-long journey. Yet, we can’t continue anymore in this format.
There’s an urgent call that all Africans must address. It’s the call around the transformation of Small Businesses in Africa. It’s because of small businesses that most African countries have earned accolades as enterprising nations. Uganda is one of those countries. If you walk on any street in Kampala or in one of its suburbs, you’re welcomed by tens of small businesses. For every one medium business in Uganda, you are talking about 10000 small businesses. The base of the pyramid is indeed big, yet also under-served, and ignored. It’s not included and is considered un-bankable.
If you look at most bank products, they are not targeting these small businesses. First, banks consider small businesses risky and not worth their focus. However, the Ugandan economy as with other African economies, they are held by this base of the pyramid. Government authorities such as Tax Bodies have not customized their services to enable the transformation of these small businesses.
How do we move from our hurly-burly clouds of big business and come down to the ground where small business operates? How do we rethink our accounting and finance practices and models in a way that’s tuned and customized to small businesses? How do we develop business philosophies that are derived from the reality of small businesses? The base of the pyramid that is small businesses in Africa is the next place of innovation. We must innovate within small businesses in Africa to enable the next stage of transformation. Without the transformation of small businesses, we can’t guarantee future African economies. The small businesses must work, and they must work sustainably, that’s the challenge for every African economist, entrepreneur, policy maker and everyone that seeks to make an intervention for the socio-economic transformation of Africa.
We are addressing this challenge at Ortega Group, thinking up all possibilities for Small Businesses in Uganda. We must start somewhere. If small businesses continue going out of business, then we are trapped in a cycle of poverty, a cycle of stagnation. Small businesses in African economies must roar, only then can we speak of having sustainable economies in Africa.
Africa’s Biggest Call: The Critical transformation of Small Businesses
I have been lucky to be close both as an observer and participant in Africa’s entrepreneurship scene for the last decade. Although Africa has registered successes, the failures have been soul-crushing. In those 10 years, we are speaking of thousands of small businesses that were started and didn’t get to see their first anniversary. The rate of attrition of businesses in Africa is exceptionally high. Business in Africa is not where you go to succeed, it’s where you go to run bankrupt.
Thus, Africa’s business scene has continued to be dominated by the same big wigs that were present at the time of Independence. Multi-national companies have continued to have a field-day in Africa, while the indigenous enterprises have continued to cycle through to the burial pits. Thus, it’s been a play between the bankers, the big multi-national companies and government. The other tiers have been playing escort and falling off during this decade-long journey. Yet, we can’t continue anymore in this format.
There’s an urgent call that all Africans must address. It’s the call around the transformation of Small Businesses in Africa. It’s because of small businesses that most African countries have earned accolades as enterprising nations. Uganda is one of those countries. If you walk on any street in Kampala or in one of its suburbs, you’re welcomed by tens of small businesses. For every one medium business in Uganda, you are talking about 10000 small businesses. The base of the pyramid is indeed big, yet also under-served, and ignored. It’s not included and is considered un-bankable.
If you look at most bank products, they are not targeting these small businesses. First, banks consider small businesses risky and not worth their focus. However, the Ugandan economy as with other African economies, they are held by this base of the pyramid. Government authorities such as Tax Bodies have not customized their services to enable the transformation of these small businesses.
How do we move from our hurly-burly clouds of big business and come down to the ground where small business operates? How do we rethink our accounting and finance practices and models in a way that’s tuned and customized to small businesses? How do we develop business philosophies that are derived from the reality of small businesses? The base of the pyramid that is small businesses in Africa is the next place of innovation. We must innovate within small businesses in Africa to enable the next stage of transformation. Without the transformation of small businesses, we can’t guarantee future African economies. The small businesses must work, and they must work sustainably, that’s the challenge for every African economist, entrepreneur, policy maker and everyone that seeks to make an intervention for the socio-economic transformation of Africa.
We are addressing this challenge at Ortega Group, thinking up all possibilities for Small Businesses in Uganda. We must start somewhere. If small businesses continue going out of business, then we are trapped in a cycle of poverty, a cycle of stagnation. Small businesses in African economies must roar, only then can we speak of having sustainable economies in Africa.
Photo by Random Institute on Unsplash
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