Doing business in Africa: such a long way
At the Anzisha Forum at the École polytechnique in Palaiseau, young Africans and experienced observers shared their experiences. Instructive.
In recent years, numerous studies have shown that entrepreneurship is one of the keys to the development of the African continent. With growth of 4.5% on average, Africa is able to offer many opportunities to those who want to do business in a rapidly changing Africa which is now perceived as the new frontier for emerging markets.
Find the right idea and get started
Entrepreneurship is attractive. And more and more people throw themselves into the water every day as soon as a good idea or the beginning of a solution seems to emerge. Whether in an informal setting or through the creation of companies. A bet, which is not won in advance, there are so many constraints. Globally, in Africa, one still undertakes to solve a problem, or to help the community. Access to bank financing, the legal and fiscal framework are often unsuited to the needs of businesses, and there is little reliable data on the markets etc. While at the same time, African countries, according to the latest Doing business report, are the ones that have reformed the most to improve the business climate. Insufficient, for the moment, because on the ground, each country offers its own recipe to encourage business creation. But the dream of any entrepreneur is to help develop the economy of his country, build the fabric of national flagships, and for the most ambitious, consider entering international markets. What are the success factors of a business aimed at Africa? Cédric Atangana, founder of Infinity Space, a start-up specializing in innovation, reveals that “from the start, you have to build a long-term strategy with a clear vision of each step, particularly with regard to the financing ”. Never mind, this February 26 at the École Polytechnique as part of the Anzisha Forum that the association X-Africa has decided to devote to entrepreneurship, the companies present are for the most part far from having defined a also precise calendar of their future. At the helm of the projects, Africans living on the Continent but also from the diaspora, non-Africans who bet on the attractiveness of Africa on its high human potential.
The crucial step of the pitch
In the process of entrepreneurship, as we present it today, the most crucial step remains the pitch. This is when the entrepreneur tries to convince potential partners or financiers. He must present his project sometimes in a few seconds. Cédric Atangana, experienced in the exercise, details his last pitch made in the United States in front of dozens of investors. “In Africa, we have 800,000 people who are unbanked and who cannot buy on the Internet, on the other hand, there are today mobile-money solutions in Kenya, in all countries. These solutions are not all interoperable and e-commerce sites cannot offer them to their customers. So, we have developed a new technology that allows e-commerce sites to embed all the mobile payment solutions that exist in Africa on their site through a single application. In total, it took him sixty seconds to convince of the potential of a market estimated at one billion users. All professionals are unanimous on the importance of pitch in the process of obtaining the first funds.
And fundraising, quésaco?
A mystery remains, however. It concerns fundraising. How do we do it and why? What to do with these sums quickly garnered. “This is a very, very difficult step, both simple and complex, because you have to have a very precise idea of the amounts you need, quantify the needs precisely because in general, start-ups ask a lot of funding, want to have everything right away: an office, employees … But ideally, you just have to find an optimal amount to start. And at each step, repeat this exercise, ”says Cédric Atangana. Young companies like Infinity Space often operate on equity in the early years. So, in recent years, investing and raising funds have become two major challenges for the future of entrepreneurship in Africa. In this area, there is only to look at the craze of investment funds for ten years: French, Europeans, Americans and more and more Africans are jostling to finance the private sector of the Continent. However, the selection is always very strict with criteria with high standards.
What sector, for what future?
At Polytechnique, on February 26, nine young entrepreneurs presented their business plans for Africa. Amina Nasri, a graduate of the École Polytechnique et des Mines de Paris, founder of Afrikwity, unveiled her equity crowdfunding platform for Africa which allows investors, especially those from the African diaspora, to invest in the capital of African start-ups and SMEs. Cyril Colin and El Alami, two graduates from the École Polytechnique and the University of Berkeley, also pitched their start-up elum, winner of the Rethink Africa Awards, a software solution that optimizes the use of solar energy using algorithms to reduce customers’ electricity bills, thereby promoting an accelerated transition to renewable energy. A project already proposed in Morocco and which will soon be extended to Senegal. Finding. Two sectors give rise to real vocations: renewable energies and digital. The first because with a continent suffering from an energy deficit, the solutions of the future are increasingly looked upon as the most suitable for catching up. Overall, many are committed to integrating sustainable energy systems into the daily lives of Africans. For the second, digital, the challenge has become almost vital in a rapidly developing society, around the mobile, in particular, extensions of use for the media, applications, crowdfunding increases capacities tenfold.
On site, the field does not wait!
But Mamadou Mbaye, director general of the Senegalese Sovereign Fund for Strategic Investments (FONSIS) warns: “There is bound to be a gap between what the start-ups offer and the reality on the ground. We still feel that there is a kind of traditional tropism which tends to say that African governments are badly structured, that they do nothing, that there are a lot of problems. Yes, there are problems, but many people will be surprised in the years to come because there are a lot of interesting prospects for development that go a little against conventional wisdom. Moussa Mara, former Prime Minister of Mali, would like young Malian entrepreneurs to take inspiration from the most innovative projects to build the country’s entrepreneurial fabric. “Youth entrepreneurship, for me, is one of the most serious ways to get the continent out of its difficulties, and there is a key element: innovation. Before adding: “Our country is a French-speaking country where the spirit of entrepreneurship is not very developed, the youth in Mali are very oriented towards wage-earning, bureaucracy, they do not want to take the risk of s ‘implant and establish themselves in an overly competitive market,’ says the future candidate for mayor of Bamako, who came with a delegation of young entrepreneurs.
Mamadou Mbaye is more insistent. According to him, the ideas that are flourishing in the renewable sector towards Africa must adapt to a relatively frugal environment which now carries the obligation to develop economically at “low emission”. He explains: “In the global sense, the reality of the world today is that planet Earth is essentially Africa. This is more than 33% of living space, it is a continent that therefore has a lot of potential, it is a continent where there are very few inhabitants. We have many problems, of course, but we can solve them very quickly, and many problems of the world can find solutions also in Africa. So, there is every reason to bulge the torso, we must not only look at the economic indicators, the size of the economies, today we must question this model precisely because it is a mode of valuation, and classification which leads us straight into the wall. ”