According to the United Nations Environment Programme (UNEP), Africa contributes about two to three per cent to climate change, yet the youthful continent bears the most consequences. Decreased rainfall, increased heat waves, droughts, and an increase in heavy rainfall are some of the adverse effects of global emissions facing Africa. These impact our ecosystems, livelihoods, societies and economies.
UNEP highlights that one of the reasons why Africa is vulnerable to climate change is due to its weaker social and economic system compared to other parts of the world. Even though the climate crisis threatens to disrupt and negatively impact Africa’s economies and societies, African entrepreneurs can turn the tables.
This article seeks to explore the social and economic benefits of entrepreneurship in Africa, how the climate crisis is affecting entrepreneurship and ways to build sustainable entrepreneurship – a reflection of insights shared during the Shared Value Africa Initiative’s (SVAI) at the recent African Entrepreneurship Forum held on in August 2022.
The social and economic impact of entrepreneurship
With entrepreneurship at the core of Africa’s development efforts, economic prosperity is guaranteed. Here are some areas where entrepreneurship in Africa enhances social and economic growth.
- Creation of employment opportunities. The African Development Bank (AfDB) indicates that over 20 million jobs were lost in 2021 in Africa due to the COVID-19 pandemic. The poverty levels remained high in 2022, and from the Russia-Ukraine conflict, the bank further states that another 1.8 million people are likely to end up in poverty in 2022, and 2.1 million more in 2023. Entrepreneurship creates job opportunities not only for entrepreneurs themselves but also for other people. Their living standards improve, which in turn reduces poverty.
- Technology development. The Business Insider Africa records that six African start-ups featured in the World Economic Forum’s list of 100 innovative tech start-ups for its 2022 Technology Pioneers cohort. These start-ups include Okra in Nigeria – Fintech; Access Afya, Kenya – healthcare social enterprise; Sendy, Kenya – e-commerce fulfilment; Pula Advisors, Kenya – agricultural insurance and technology; Ampersand, Rwanda – solar energy; and Ejara, Cameroon – crypto and investment services. The World Economic Forum’s Technology Pioneers are at the forefront of shaping policy, strategy innovation and solutions in technology on globally relevant issues. These African startups will be part of a global community comprising some of the world’s tech bigwigs, including Google, Twitter, Spotify, Wikipedia and Mozilla.
- Increased revenue. Entrepreneurs boost Africa’s economy by paying taxes which are used to establish and strengthen social services, for example, healthcare, education, social security, and so on, and build infrastructure in their countries.
- Creation of new markets and businesses. The saturation of products and services in an area pushes entrepreneurs to think creatively and establish new markets and businesses. When the newly created markets perform well, Africa’s economy equally grows.
Climate change and the African entrepreneurship
Climate change has dire consequences on people, prosperity, peace, and the planet – our home. This means that climate change will impact businesses. So, how should entrepreneurs ensure that they remain resilient and foster sustainable entrepreneurship in Africa?
Making Africa’s entrepreneurship sustainable
African entrepreneurs must learn to intentionally focus on the problems they are solving to offer customised and sustainable solutions. Entrepreneurs need to be guided by a social and environmental mission. By focusing on the problems, entrepreneurs are identifying gaps in the market and society that need solutions through a product or service.
An agribusiness entrepreneur at the forum emphasised the need to embrace innovation, mechanisation and hydroponics for sustainable agriculture. Entrepreneurs need to innovate and adapt while having the realities of climate change and its potential impacts in mind.
Pointing out the power of collaboration, another panellist advised entrepreneurs from different sectors to work together. Building on this, the panellist highlighted that cross-industry collaboration and partnership can create an ecosystem where like-minded entrepreneurs jointly offer solutions. Importantly, collaboration allows for and leverages sharing of resources and expertise, reduces costs, and drives scale and impact.
African entrepreneurs need to provide society with products or services that benefit consumers. This will strengthen and make our societies and economies more resilient. African entrepreneurs are called on to solve Africa’s social and environmental challenges and opportunities. At the end of the day, this vibrant, dynamic, rising continent is our business.