The research and policy arm of the Tony Elumelu Foundation, the Africapitalism Institute, released a groundbreaking study on Africa's entrepreneurial ecosystem at the sixth Global Entrepreneurship Summit in Kenya where President Obama gave the keynote address.
The 86-page report, titled Unleashing Africa's Entrepreneurs, based on original research leveraging the Foundation's pan-African network of early stage African businesses, identifies and analyses the factors inhibiting the potential of entrepreneurs across Africa.
Key findings from the report include:
- 87 percent of respondents indicated that obtaining the necessary seed capital was their primary challenge. Only 3 percent of those surveyed had a commercial bank loan, while 69 percent used personal savings to finance their business.
- 53 percent of entrepreneurs indicated that it was "not at all easy" to obtain the necessary machinery, equipment, technology or raw material needed to operate, citing the high cost of land and office space as the primary cost concern. The second most costly operating expense is electric power.
- 63 percent of respondents said that government needs to "improve the general quality of infrastructure" as a key to reducing overall costs which are hurting their competitiveness.
- 82 percent of entrepreneurs said that access to a business start-up accelerator or resource center was "very important" to their business, while 66 percent indicated that they are currently part of a business incubator or accelerator.