By Daniel Monehin, Division President, Sub-Saharan Africa, Mastercard

Although 2016 was a difficult year for economies on the continent, the outlook for the years ahead is cause for optimism. Provided we focus on the right things, Africa has the potential to become the most entrepreneurial, forward-thinking continent in the world.

One of the most important things we need to do to shape a sustainable future is to invest in a resilient entrepreneurial culture, especially among the youth, who make up a large and growing portion of Africa’s population. We know that African youth aged 15 to 24 will double to around 450 million by 20551 which brings both opportunities and challenges, especially for job creation and entrepreneurship.

Africa’s economic growth in 2016 was the lowest in over a decade2, yet many companies – African and international – continue to invest in new markets across the continent in an effort to localise their operations and tap into Africa’s growth potential. Going hand in hand with this trend is an upsurge in African entrepreneurship due to a combination of push-pull factors.

On the one hand, Africa is broadening and diversifying in terms of resources and trade currencies, creating more ‘space’ and new opportunities for entrepreneurs. On the other, high unemployment is forcing people to start their own businesses which solves their immediate goal of providing for themselves and their families.


The power of entrepreneurship

Entrepreneurial potential is particularly powerful when it has the support of both the public and private sectors. Look at Uganda for instance, it has one of the largest populations under 30 in Africa, with between 62 percent and 83 percent unemployed. Uganda, which is kept afloat by the government’s entrepreneurial strategy, is today the world’s most entrepreneurial country3.

Government-stimulated entrepreneurial growth is also evident in Kenya, where the Youth Enterprise Development Fund and Uwezo Fund have been established to support young entrepreneurs. This is greatly needed, given that many financial institutions in Kenya expect young people to provide collateral, yet only a few investors are ready to invest in young people’s ideas, according to Kenyan entrepreneur Eric Kinoti, listed as one of Forbes’ 40 most promising African entrepreneurs under 40. Despite the well-known funding gap that young entrepreneurs often face, Africa’s millennial entrepreneurs are building bigger businesses than their older counterparts.

The under-35-year-old entrepreneur is also more likely to be driven by purpose over profit – the desire to contribute to the greater good. What’s more, nearly half of millennial entrepreneurs (47 percent) are women.


Women are coming to the fore

Indeed, African entrepreneurship appears to be undergoing a transformation4 and is referred to as “feminisation” of entrepreneurship. Traditionally entrepreneurs have been men, the gender gap is disappearing in African countries like Angola, Botswana, Nigeria, South Africa and Zambia.

The 2017 Mastercard Index of Women’s Entrepreneurship (MIWE) tells a similar story. In fact, when it comes to women business ownership, it shows two African countries topping the list of 54 countries around the world. Right at the top is Uganda, where 34.8 percent of businesses are women owned, with Botswana right behind at 34.6 percent. That level of ownership is significantly higher than in the United States, the United Kingdom and Germany, to mention a few.

The Index results revealed some important insights into what drives female entrepreneurs in developing countries: resilience, determination and the desire to provide for their families and communities. The findings reinforce that women entrepreneurs are the backbone of economic growth and powerful engines of development and financial inclusion, especially in Africa.


Big business assisting small business

Large, well-established companies are well aware that their own success ultimately depends on the success of small and emerging businesses. So what are companies like Mastercard doing to help small business grow?

We are facilitating financial inclusion through the introduction of relevant technologies that is helping to modernise the payment sector, with specific focus on mobile. Connected mobile devices is opening up access to cheaper banking and financial services, creating efficiencies in supply chains and opening up new markets. Masterpass QR takes advantage of this and helps connect merchants and consumers more easily, and more securely.

Interventions such as the Mastercard Start Path programme is changing the way we engage with start-ups, allowing these businesses to gain access to mentorship, and the Mastercard network of experience in order to build and grow fresh ideas. What underpins this engagement is the support these smaller business owner gain, which helps them to not only stabilize their business but also expand seeking out new opportunities.

For micro businesses, such as those that we support through initiatives such as Youth for Technology Foundation for example, require much more meaningful and intensive support. Financial literacy training for example helps these women business owners to receive assistance with the basics to build a stronger foundation for their business. Supporting these female entrepreneurs is vital to their sustained growth, as they become self-sufficient and better able to provide for themselves and their families. This has a positive impact on their immediate community as well, with knowledge transfer and employment opportunities being created.

Other partnerships like those with Mercy Corps and UN Women in Africa, is allowing for this level of financial literacy to filter to those most in need, and it is women who are most receptive as they see the long term benefits. The Mastercard Center for Inclusive Growth is specifically focused on ensuring the empowerment of the youth and women through these types of meaningful interventions.

Investing in women and the youth is smart business.




2 Deloitte’s report on “Africa in 2017: Shaping the continent’s future”

3 Global Entrepreneurship Monitor (GEM) Consortium