Across francophone Africa, incubators are emerging rapidly to support a new generation of young entrepreneurs. Despite their huge potential, however, incubators are just one of many players in a typical entrepreneurial ecosystem. So it is increasingly important that incubators — in addition to allocating the necessary resources, services and funding to worthy start-ups — provide them with a platform to share and transfer knowledge across the ecosystem, not only with each other but also with the investors, research centers and industry experts upon which their businesses will ultimately depend.
As with Impact Hub Bamako, incubators can be part of broader international franchises, while others are anchored by academic, public or private bodies (or some hybrid of the three) and may already be associated with other incubators. Bond’innov, for example, is an incubator that promotes entrepreneurship cooperation between the global North and the South and that is headquartered in Paris and located on-campus with the Institute for Development Research, a large multidisciplinary research organization operating in more than 50 developing countries.
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Babah Salekna El Moustapha, co-fondateur de la Société Mauritanienne pour l'Industrie de Charbon de Typha (SMICT) avec Mohamed et Moctar Abdallahi Kattar. Photo Crédit : Moussa Traoré, HADINA.
« Innovez pour le climat. Travaillez de manière durable. » Ce slogan a lancé l'appel à candidatures de la dernière initiative de soutien à l'entrepreneuriat du Groupe de la Banque mondiale en Mauritanie, le Marathon de l’Entrepreneur – un concours à l' échelle nationale qui permettra d'identifier et d' accompagner une nouvelle génération d'entrepreneurs. Cette compétition est une initiative du Groupe de la Banque mondiale, en partenariat avec le Ministère de l'Economie et des Finances, et avec Hadina RIMTIC qui agit comme véhicule central par lequel le soutien du bailleur et du secteur public peut être transféré aux aspirants entrepreneurs mauritaniens.
Annoncée en avril, la compétition accompagne 21 nouvelles ou jeunes entreprises, leur fournissant des services de formation, d'encadrement et d'autres services d'incubation pour les aider à élaborer un plan d'affaires final et, fondamentalement, à tester les hypothèses qui sous-tendent leurs idées d'entreprise.
Babah Salekna El Moustapha, co-founder of the project Mauritanian Society for the Typha Coal Industry (SMICT) with Mohamed and Moctar Abdallahi Kattar. Photo Credit: Moussa Traoré, HADINA.
“Innovate for the climate. Work sustainably.” This slogan launched the call for applications to World Bank Group’s latest entrepreneurship support initiative in Mauritania, the Entrepreneur’s Marathon — a country-wide competition to identify and accompany a new generation of entrepreneurs.
This competition is an initiative of the World Bank Group in partnership with the Ministry of the Economy and Finance and Mauritanian incubator Hadina RIMTIC (ICT in the Islamic Republic of Mauritania) acting as the central vehicle through which public and donor support can be channeled into Mauritania’s aspiring entrepreneurs.
The competition is accompanying 21 new or young start-ups and businesses, providing them with training, coaching and other incubation services that will help them develop a final business plan and provide evidence for the hypotheses underpinning their business idea.
The president of the Somali Chamber of Commerce, Mohamoud Abdi Ali, joins with the country's Minister of Commerce and Industry, Khadra Ahmed Dualle, at the IFC-sponsored Public-Private Dialogue at the Somalia Conference, which was convened in London in May 2017. The need to increase revenue, growth and trust led to the creation of the Public-Private Dialogue. Photo credit: MPF.
Stabilizing countries that have long been afflicted by fragility, conflict and violence (FCV) – and helping them shape effective reforms to strengthen the investment climate – is one of the most difficult challenges in international development. The task is all the more severe when, as in Somalia, a large proportion of the population has been displaced by violence and natural disaster and when the economy is overly concentrated on a few sectors. Such factors make rebuilding investor confidence a daunting challenge for the newly elected government.
However, despite these challenges, Somalia represents a rare example of private-sector resilience. The major sectors of the economy survived the tumultuous period after the collapse of the state in 1991. Entrepreneurs in Somalia and abroad continue to innovate and adapt in a country void of regulatory frameworks or government oversight. Domestic mobile-money transfers average $1.2 billion in monthly transactions, and mobile money usage is above 70 percent.
Nonetheless, economic growth in Somalia has stagnated and has not resulted in a peace dividend for the population. Government revenue is low – around 2.5 percent of GDP – in an economy driven by consumption, as identified in the World Bank Group’s Somali Economic Update (SEU) from 2016. According to the SEU, two of the biggest obstacles to equitable growth are access to finance and lack of regulations. Moreover, investment in priority sectors is low, held back by protectionism, conflict and instability.
Somalia was the focus of an international conference in May 2017 in London that brought together some of Somalia’s top private-sector firms, development institutions and government leaders to discuss how to jump-start private-sector-led growth and achieve long-term peace and development. Among the distinguished attendees were the newly elected president of Somalia, Mohamed Abdullahi Mohamed “Farmaajo”; Prime Minister Teresa May of the United Kingdom; United Nations Secretary-General Antonio Guterres; and the European Union’s foreign-policy chief, Federica Mogherini. The World Bank Group delegation was led by Jan Walliser, the Vice President for Equitable Growth, Finance and Institutions.
With financial inclusion now established as an objective for most financial sector policymakers worldwide, the day-to-day responsibility for ensuring its achievement in a responsible, consumer-friendly, and evidence-based manner often falls to financial sector supervisors. Two challenges are particularly relevant: first, with an increased policy focus on financial inclusion, supervisors are often tasked with adapting reporting systems to collect granular data to monitor financial inclusion and inform policy. For example, how many customers are using each product? Are newly opened accounts active or dormant? What is the rate of growth of agent networks in rural areas?
Second, in a given market in order to improve competition and consumer choice, and ultimately financial inclusion. This means that non-bank FSPs such as mobile network operators (MNOs), fintech companies, financial cooperatives and microfinance institutions are increasingly brought under the supervisory mandate of supervisory authorities. This presents a significant challenge for financial sector supervisors who must cover a large and diverse set of FSPs with distinct risk profiles and capacities, stretching their already limited resources. Collecting and analyzing accurate, relevant, and timely information from these providers is at the heart of this supervisory challenge.
to address these challenges, an approach known to some as “suptech” (i.e. supervision technology). The National Bank of Rwanda (BNR) provides a case in point.
How a new green business facility in South Africa is connecting local companies to the global green economy
Traditional trade mission functions are becoming obsolete. Over hors d'oeuvres, business cards are exchanged, elevator pitches are delivered but, in most cases, entrepreneurs leave with empty promises to stay in touch and no useful contacts. This may sound a little cynical but the reality is that in an age of business models “ripe for disruption,” the ways to create viable business partnerships across borders have not changed for decades.
Helen Mwangi and her solar-powered water pump in Kenya © infoDev/World Bank
Managers of initiatives that support innovative entrepreneurs have a choice to spread their resources (and luck) among many opportunities or focus them on the most promising few. In developing countries, public and donor programs can learn a lot from how private investors pick and back innovative ventures.
In the early days of infoDev’s Climate Technology Program, our thinking was very much about letting a hundred flowers bloom: supporting a large number of firms with the hope that a few would emerge as blockbusters. Firms were selected on the basis of objective metrics tied to the innovative nature of their ideas and their economic, social and climate-change impacts. For example, while infoDev’s partner the Kenya Climate Innovation Center has more than 130 companies in its portfolio, a $50 million venture-capital fund in California would have at most six. Inspired by private investors, we have since rethought our program objectives for these centers, as well as the way we select and support businesses. The Kenya center is going through a rationalization of the firms it supports.
Like many public programs, infoDev and its network of Climate Innovation Centers had good reasons to support large numbers of companies. The main reason is the need to spread the entrepreneurship risk through a diversified portfolio. A recent infoDev literature review found that up to a third of all new firms do not survive beyond two years, let alone grow. Out of those that survive, data from high-income countries suggest that fewer than 10 percent become high-growth firms. So casting a wide net increases the chances of hitting the jackpot. The opposite approach, picking winners, is seen as destined to fail and distort the market.
Sinah Legong and her team meet at Raeketsetsa, a program that encourages young women in South Africa to get involved in information and communications technologies. © Mutoni Karasanyi/World Bank
Olou Koucoi founded Focus Energy, a company that brings light, news and entertainment to people living off-grid in his country, Benin. Its spinoff program ElleAllume hopes to train more than 1,000 women to bring power to 100,000 Beninois homes this year. “At the end of the day, [inclusive hiring] is not a gender decision, it’s a business decision,” he says.
Over the past few months, I interviewed a number of incubator and accelerator programs to compile best practices for the World Bank Group’s Climate Technology Program. The research spanned 150 programs in 39 countries, ranging from relatively new to seasoned veterans of the clean tech incubation space. The consensus regarding gender diversity and inclusion was almost unanimous; all but one program echoed Koucoi’s sentiments – in principle.
In practice, however, encouraging more women into the clean energy sector and related programs has proved challenging. Below are some of the most popular explanations for the low levels of female representation:
“We can’t find them.”
Many clean energy incubation programs said they had difficulty recruiting due to a lack of women in the industry and strong women’s networks to tap into. While there is no shortage of women in clean energy (with industry-specific examples such as clean cookstoves serving as a good example) there are few women-led businesses. This lack of visible leadership translates into lower rates of participation.
“We would love to focus on bringing more women into the program, but we have limited resources.”
Incubation programs are often lean, with little time and few resources to expand on offerings and create targeted programs for women. Instead, to create quick wins and draw in additional funds, programs often take a “low-hanging fruit” approach, seeking out the most visible companies to recruit and invest in, which tend to have male co-founders.
“Does it really matter at the end of the day?”
Many programs are pro-gender-diversity in principle, but gender-agnostic in practice. This stems from a disconnect between the “gendered-lens” approach discussed when fundraising for incubation programs and the results frameworks which judge their success. Such factors as the number of companies exited are still weighed much more heavily than gender balance.
Below are some of the best ways I have found to create more gender-diverse and inclusive programs:
Dar es Salaam, Tanzania – one of the many cities in Africa that is expected to see sharp population increases – will need rapid job creation to keep pace with its swift population growth. The city’s new bus transit system – completed in 2015, with a $290 million credit from the International Development Association, the World Bank’s fund for the poorest countries – is now reducing transportation costs, easing traffic and promoting private sector development.
Photo: Hendri Lombard / World Bank
Africa’s working-age population is expected to grow by close to 70 percent, or by approximately 450 million people, between 2015 and 2035. Countries that are able to enact policies conducive to job creation are likely to reap significant benefits from this rapid population growth, according to the Africa Competitiveness Report 2017, co-produced by the World Bank Group, the African Development Bank, and the World Economic Forum. The report also warns that countries which fail to implement such policies are likely to suffer demographic vulnerabilities resulting from large numbers of unemployed and underemployed youth.
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In a first for Africa’s Sahel region, entrepreneurs from Senegal to Chad assembled in Niamey, Niger, for the SahelInnov Expo last month to showcase their businesses and exchange ideas. From livestock to drones, all sectors were on display as a new generation of entrepreneurs and start-ups emerges with bold and innovative ways to address the challenges facing their countries and communities. Increasingly recognized as a strategic path to economic growth, supporting SMEs and entrepreneurs has a key impact on development and is generating more interest from governments in the Sahel.
Michaëlle Jean, the Secretary General of the International Organisation of La Francophonie, His Excellency Mahamadou Issoufou, the President the Republic of Niger, and Almoktar Allahoury, the CEO of CIPMEN.
Photo Credit: CIPMEN
Hosting the event was Niger SMEs Incubator Center (CIPMEN) whose CEO, Almoktar Allahoury, lauded the initiative. “This is the first time all stakeholders have come together: entrepreneurs, public officials, investors, academia and development partners in one place to discuss the many opportunities and remaining obstacles for the private sector — this is just what we need to take the region to the next level.”
Indeed, entrepreneurship could be especially important for this extremely poor region, with half the population living below the poverty line. Burkina Faso and Niger, for example, are among the fastest-growing economies in the world, yet their GDP per capita are just $395 and $652 respectively, compared to the Sub-Saharan African average of $1,647. A vibrant and active entrepreneurial ecosystem would therefore not only boost economic diversification and improve productivity, it also could prove the vital lever to tackling two of the Sahel’s biggest challenges: youth unemployment and climate change.
The devastating combination of climate change, mass migration, trafficking and the rise of violent extremism has resulted in recurring humanitarian crises and massive food insecurity, affecting more than 20 million people across the Sahel in 2015. Enduringly high birth rates, furthermore, will require millions of jobs to be created to respond to the needs of a rapidly growing and increasingly young population. Institutional reach remains weak and a state of protracted insecurity has taken root over vast swathes of territory.