Things you don’t know about African Entrepreneurship
Everyone knows the saying. Entrepreneurship creates new jobs and new businesses in a struggling economy, helping to deliver services with a new way of thinking. Starting a business is the spark of prosperity, a source of income motivated by lack of jobs ruled by those who are inspired for change.
Today, entrepreneurship is seen as one of the most sustainable job generation tools in Africa as one of the key ingredients to addressing youth unemployment in the continent. Yet, not enough is being done by governments to support entrepreneurs looking to disrupt the African market currently dominated by China.
The challenge here is that “doing good effectively is about empowering local communities, not keeping them dependent,” a point argued by Ugandan-born entrepreneur Teddy Ruge who holds various CEO titles in helping his community. On an international platform, Teddy has challenged why international development is keeping Africa stagnant and Africans dependent on international aid.
Africa is still viewed from the post-colonial lens of poverty, famine, warlords and political unrest, which is why there are more aid and philanthropist projects than there are venture capital projects. Rather than considering what Africa actually wants and needs, Africa is being given things the international community thinks it needs. As the CEO of RainTree Farms and CMO of Remit, Teddy has experienced problems of pulling in venture capital funds for reasons of Africa being perceived as “poor aid recipients” rather than potential customers. Investing in one of the continent’s many start-ups, giving business guidance, being a mentor, and directly asking Africans what their priorities are is what the continent needs the most.
The only investment opportunities venture capitalists have identified are in large extractive industries such as in oil, gas, diamonds and other minerals that is destroying the continent. “Traditional venture capitalists have a vague understanding of African markets…[and] the sheer obstacles one has to overcome are a barrier for VCs to get their heads around,” says Teddy. The route to venture capitalism is not a route that is accessible for a local start-up who know how to navigate regional complexities and the chasm of disinformation between investors and African entrepreneurs needs to be closed.
“One trend that I see happening (even though I completely disagree with the strategy) is this: African start-ups are getting wise to the law of start-up money. In the venture capital/start-up world, money flows from like to like. Sometimes it is not always about your product or business, it is about the people behind the business. Serial entrepreneurs in Silicon Valley are more likely to get funding quickly than someone no one has ever heard of or can relate to. In some African markets, this is manifesting itself as the “white front” strategy. You are more likely to get funding (or get that meeting) as an African start-up if you have a white co-founder on your staff. If you are smart, you put that white guy in your marketing videos, and/or you make him CEO. An all-black African start-up CAN get funding, but it is a lot harder to do.”
Seeing the picture from an African entrepreneur point of view has been missing in discussions related to development and investment within the continent. One of the biggest guilty preaches made by the international community is constantly to remark upon Africa as though it is one nation.
“It is easy for [people] to talk about the continent as one country. It is hard for them to appreciate the complexity. When you don’t understand something, you seek the easiest way to understand it. Most people in the West can’t point to Uganda on a map, or appreciate the geographic enormity that separates East and West Africa. There’s not a collective of issues that I can point to that is common for 54 countries and over 1 billion people. But perhaps that’s the key issue right there. The fact that we are always collectively assigned one identity. The culture and issues in Egypt is as different in Libya, and Comoros, and Uganda. So from Alexandria to Durban—as absurd as that is—we are painted with one stroke, “single storied” into one narrative. Can you imagine if Canadians were called Mexicans?”
Overcoming the inherited narrative of 54 countries isn’t easy but the growth of connectivity is allowing Africans to attack this massive problem through collective contribution on the internet. “Having strong individual identities for our countries is extremely important. But it also creates a conundrum for us in terms of inward growth. We have these borders we inherited through the colonial slicing of the continent. But what do we do with them? How do we build our markets with so many borders? How do we move on our own continent? How do we build infrastructure? These are all major issues we have to address as our continent grows. And we don’t have the luxury of waiting around. 50% of our population is under 15. What kind of future do we want to prepare for ourselves as we finally come into our own and design our destiny?”
As this new paradigm takes shape, Teddy says we need to reconsider what it means for a nation to be “developed.” He asks whether someone who gets paid $3,000 a month, owns property, but also carries debt should be considered “more developed” than someone in a village who can prepare organic meals, maintain active lifestyles and send their children to school for less than one dollar a day. “Why can we not call that development? Why does he have to have a car, garage, running electricity and credit cards in order for it to be considered development?”
While development projects in Africa seem laudable from a Western lens, philanthropic endeavours often led by Caucasian celebrities and leaders are off-setting the good that local entrepreneurs within the continent are trying to achieve.
In 2009, Hollywood actor Ashton Kutcher promised to donate 10,000 bed nets to Africa if he got 1 million Twitter followers which Teddy argues erodes people’s ability to create robust industries and institutions within their own communities.
“We, in the developing community,” he says, “…have been used like a sidekick to justify people’s activities. Just because you’re doing something for the poor doesn’t mean you’re doing it right. A lot of the interventionist programs are so simplified that they say, ‘Do this, and it will result in B almost immediately.’ They don’t understand that giving away things for free keeps us trapped in this recipient narrative, where we don’t or can’t provide for ourselves, so we always have to be given things. Most especially, [they] make our governments lazy.”
Doing good effectively is about empowering local communities, not keeping them dependent yet without the right cash flow, a thriving entrepreneurial community who help themselves still seems far off.
“I think the only way the situation can improve is if African money begins funding African start-ups. There’s plenty of money on the continent. The infrastructure for distributing that money to start-ups isn’t there yet. Nor is there a mature start-up scene yet to jump-start this trend. The chicken and the egg aren’t mature yet. There are small semblances of this happening at various tech incubation and co-working spaces like Hive Colab in Uganda and iHub in Kenya that are centralising exciting projects. This has attracted new African-focused VC firms to form like The Savanna Fund, but we need similar efforts for other market sectors on the continent as well. VC4Africa has things going in the right direction, but could certainly use the help.”
The road to becoming an entrepreneur came naturally to Teddy. Born in a country which is ranked as the most entrepreneurial country in the world, “the hustle as an entrepreneur is already in you,” he says.
“For me,” Teddy recalls, “…I knew the minute I crossed the stage to receive my degree that I didn’t belong in an office. I’ve always wanted to do something for myself and build something from the ground up. Like any good entrepreneur, I failed a lot because I could count some successes. I started as a graphic designer, moved to event photographer, then web designer, then social entrepreneur. I really didn’t hit my stride until after a few years of failing to really be happy with what I was working on.”
As time went on, Teddy realised that what was lacking in his entrepreneurial journey was being a service to others. “Working for myself was great, but the reward was working to improve other people’s lives - my communities in particular.”
His company Raintree Farms is a next-generation company specialising in value-added processing of agricultural products. The company, officially registered in 2015, is currently the largest supplier of high-quality moringa-based products in Uganda, operated by 25 people from a 30-acre farm located in rural Masindi District, in north-Western Uganda. Raintree’s dual mission is to create jobs and improve lives, and create high-quality, organically-grown consumer products for Africa’s emerging middle class.
“Social entrepreneurship fit like a perfect glove,” Teddy continues when discussing his path to helping his community. “If you look across the portfolio of start-ups and initiatives I’ve worked on, they all have a social enterprise DNA. Raintree Farms engages farmers at the last mile. Remit.ug makes it easier for the Diaspora to send money to their families from abroad. JadedAid brings together development workers in a hilarious way to discuss the failings of the humanitarian industry, and Hive Colabs incubates digital start-ups focused on inventing Uganda’s digital economies. This is where I am happiest. Building things that benefit many people.”
Social entrepreneurialism is important to fixing African financial and branding issue on a more local level that has an intrinsic social component.
“I design my enterprises in such a way that the people I work with have to benefit greatly before I can count the profits. If I execute correctly, their success means my success. So for Raintree Farms, the company doesn’t succeed if the farmers we work with aren’t doing well. The better they do, the better the quality product they produce, the higher the quality of product we can add value to. If the community we work in is doing well, they’ll make sure the company does well too. As socially-focused businesses, we fill a void in our communities that social services are unable to currently reach.”
So what can the international community do to support entrepreneurial activities in Africa?
In response to this, Teddy says: “On a larger scale, bring down the international trade barriers that keep our products from lucrative markets but force us to import everything from cars to toothpicks. We want equal footing in global trade. This can go a very long way than traditional aid will. Additionally, change the first approach from aid and donations, to investments. Africa has 7 of the top 10 fastest growing economies – this is in the face of global economic slowdowns.
“If you are willing to donate, there’s nothing wrong with taking a risk and converting that donation into an investment. We are capable of creating and building major brands and business. A donation, to me, has the connotation that ‘here’s some money to help me feel like I did a good deed’. Most people donate out of the guilt of privilege. Those same people put a higher connotation on investment. They don’t feel like we are sophisticated enough to take a risk on, like we’ll waste the investment. Investment feels like they are taking advantage of the poor. The reality is that the market opportunities are massive. We are asking you to use that privilege to invest. The return is much greater than your donation.”
The next time you consider donating to Africa, consider investing in supporting an entrepreneur to help them help their communities and country. If diplomacy is rooted in our common goal for advancing human society, then diplomacy will become the language of successful globalisation rather than a seed of just national interest.