What Resources Are Available for Entrepreneurs in Africa?

‘The challenge is -- as so many of you know -- it’s very often hard to take those first steps.  It’s hard to access capital. It’s hard sometimes to get the training and the skills to run a business as professionally as it needs to be in this competitive world.  It’s hard to tap into the networks and mentors that can mean the difference between a venture taking off and one that falls flat.’

- Barack Obama, GES 2015, Nairobi, Kenya

Africa has the youngest population in the world: 60% of the continent's population is under the age of 25, and 10-12 million young Africans join the workforce every year. The bulk of these young people become entrepreneurs in one way or another as a necessity, due to lack of reliable employment opportunities.

Over the past decade we’ve seen a significant increase in the number of "ecosystem-building" organisations that are moving into the space of supporting entrepreneurs - incubators, accelerators and seed funds. However, little has been done to support these organisations, which often need help just much as the entrepreneurs they are helping.

It was in this context that Village Capital and the UK Department for International Development (DFID) Impact Programme launched VilCap Communities Africa, a programme to equip African entrepreneur ecosystem organisations with the tools, resources and connections they need to catalyze impact investment. We received 259 applications for the program, from ESOs across 33 African countries.

We've used data from those 259 applications to put together a snapshot of the entrepreneur support landscape in Sub-Saharan Africa:

Our Four Takeaways

Applicants ranged from the most developed economies in sub-Saharan Africa (such as Nigeria, Kenya, South Africa) to to the most nascent ecosystems (such as Togo, Malawi and Mali). The bulk of the applications came from East Africa and West Africa. Seventeen percent came from Francophone Africa. We were able to pull four takeaways from the data:

• Agriculture is popular. The sector that is most-covered by ESOs is agriculture. Africa is home to 65% of the world’s arable land, and three out of five Africans work in agriculture - yet the sector accounts for only 25% of the continent’s GDP. There is room to grow, and entrepreneurs are taking advantage of that room (learn more in our recent report).
• Development agencies are a major ESO funder. The majority of funding for ESOs in Sub Saharan Africa comes from development agencies. These agencies have been increasingly interested in the role that startups and growing businesses can play in market development strategies, especially job creation.
• ESOs serve all kinds of businesses. 50% of ESOs in Sub Saharan Africa work with high-growth businesses. The majority of ESOs work across business types - a study by the Collaborative for Frontier Finance describes these business types as livelihood sustaining, dynamic, niche and high-growth ventures.
• Many African cities have several coworking spaces. The majority of cities where our applicants were located have multiple coworking spaces. 31% of applicants operated in a city that had 5-10 coworking spaces, 15% had 10-20 coworking spaces and 17% had 20+ coworking spaces.

We will be releasing our full findings from the program in our upcoming VCC Africa Insights Report. If you would like to receive a notification once it is released, please sign up here.