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3 Common Myths & Misconceptions I’ve Heard About Entrepreneurship and Africa

It appears that in Africa, entrepreneurship is the new hype, everyone is talking about it in philosophical and fantastic terms yet very little facts and figures are going around.

Africa is a land of magic and miracles, where many things can be attributed to witches, angry ancestors, miracles and God’s anger. In some circles, facts and figures have little sway. Sometimes when Africans sit down to talk about an issue the conversation gravitates towards philosophy, untested opinion, proverbs and inspiration while largely staying away from facts, case studies, concrete evidence and actionable steps.

Some local indabas are sometimes ruled by prepared speeches, witty anecdotes, philosophical zingers, feel-good Afro-centric rhetoric and downright myths. Below are some of the most common misconceptions I’ve heard regurgitated when discussing entrepreneurship locally.  I could be wrong in calling them myths, I would love to hear what you think in the comments:

Africa is on a meteoric rise.

While this may have been true a decade ago, the outlook today is much more conservative. Although Africa’s growth trajectory continues, it has significantly slowed down on the back of reduced commodity and oil prices, a stagnant industrial sector, a stronger US dollar against weaker local currencies, import dependency, barriers to trade between African countries and a slowing down China that is more inward looking.

ICTs which have largely spurred growth in Africa’s service industry (particularly banking and telecoms) are gradually showing signs of fatigue as Internet and smartphone penetration reach near-saturation. Huge advancements in communication technology like WhatsApp’s  free messaging and calling have also slowed down investment in the telecoms industry as returns diminish and some African telecoms start to buckle under the pressure as they seek ways to diversify.

In 2015 The continent saw foreign direct investment (FDI) fall by a third to $38 billion from a high of more than $70 billion in 2010. ICT Innovation which is the next frontier of technology driven growth in Africa remains largely constrained by a debilitating lack of local skills to harness the internet as a tool for creating global internet businesses. Where successes like Iroko TV have emerged they have been quickly acquired by foreign investors and exported or outsourced with huge returns accruing outside the continent.

You cannot compare Silicon Valley and Africa, The Two Are Unrelated.

Today most attempts to mention any Silicon Valley example as a precedent for Africans to learn from will most certainly be dismissed as being incompatible with the African reality.  After all, Silicon Valley is completely different from Africa and there is little to learn there.

This is a welcome departure from a time not too long ago when most technology startups out of Africa where exclusively fixated on replicating Silicon Valley successes out of context. While this shift in mindset is welcome, unfortunately the pendulum appears to have swung too far to the other side and got stuck.

The reality today is that Silicon Valley is increasingly influencing the technology trends in Africa and defining some of the major developments and innovation on the continent à la WhatsApp. There has been a recent influx of Silicon Valley technology and methods as Californian companies take root in Africa redefining and commandeering the narative of the African tech “miracle”.

Google, Netflix, Uber, AirBnB, PayPal and Facebook have successfully moved in and seized the market in Africa and are mostly doing better than our own startups in the same sectors.

US venture capitalists also represent Silicon Valley’s recent fascination with Africa as they start to make increasingly high profile investment bets in Africa and other emerging markets while our own wealthy are preoccupied with pouring most of their savings into the North American and European automotive and fashion industries as proud Rolls Royce-driving customers.

While institutional FDI in Africa is on a major decline, private capital is experiencing modest growth from less than US$1 billion in 2009 to over US$4 billion in 2014.

The  International Finance Corporation estimates that up to 84% of SMEs in Africa are either un-served or underserved by as much as US$140-billion to US$170-billion. This huge gap in financing is increasingly being filled by US and European private equity investors and “angel” investors as they slowly take center stage investing in and growing SMEs and ICT upstarts across the breadth of the continent.

It appears that now, more than anytime before, Silicon Valley is starting to get it right in Africa as they become more adept at negotiating the African landscape while making major inroads on the continent. To dismiss Silicon valley as an irrelevant sideshow to Africa’s growth story is credulous and dangerous. Surely there must be lessons to be learnt and comparisons to be made especially as we seek to turn the tide and influence a more Africa driven growth story.

The Internet Will be The Driver of Africa’s Growth

Africa has experienced incredible growth over the last decade or so. While this growth is largely on record, its source and where its future lies are often misunderstood. Depending on who you ask, Africa’s growth may be attributed to anything from powerful prayers and tithing to stronger democracies and better leadership.

Lately however, there is a new doctrine that attributes most of Africa’s growth to an internet generation of young M-Pesa powered Africans who are riding a wave of digital entrepreneurship that promises to create millions of jobs and many more black Steve Jobs who will deliver us from the clutches of poverty.

This narrative places mobile money and all manner of apps and tech acquisitions smack bang at the heart of Africa’s growth story.  You will be forgiven for assuming that the next decade of Africa’s growth will be steered from the laptops and smartphones of young Africans.

This appears to be hardly true.

There is little doubt in my mind that technology and the internet are instrumental in creating the tools and services that will make everything else work faster and better as farmers check prices on their mobile phones, citizens interact with their governments, the unbanked become banked, traders transact across borders and apprentices acquire new knowledge from lessons learnt and taught across the world.

Certainly, technological innovation is the thread that will weave the lining on Africa’s future. That said, in terms of raw numbers the ICT sector is not where most of the growth and jobs in Africa will be recorded neither should it be where all our creativity, energy and hopes are directed towards as we seek sustainable growth.

Investments in agriculture, manufacturing, education and infrastructure driven by national governments’ spending and institutional capital will drive most of Africa’s growth in the coming future.

These sectors will also offer most of the jobs that Africa’s impending 1.1 billion (by 2040) workforce will require in order to earn a living and rise out of poverty. In addition, low-tech SMEs in mining, retail, manufacturing and agriculture will represent most of the self-employed.

The arenas where Africa’s battle to develop itself will likely unfold are its back street market stalls and rural plantations, classrooms and clinics, colonial halls of government and parliament where old mindsets must be broken down and new policies formed, factory floors and construction sites where young engineers and contractors will imagine and realize towers that scale mountains and bridges that span valleys and deep ravines. This is where most of our broad based growth will happen.

Apps and APIs will occupy a very important but secondary role of catalyzing growth in well-managed broad based economies on the back of huge investments in all sectors and robust policies that support productivity and growth across the board.

In Conclusion

As we continue the discussion on what realistic role ICTs and technology can play in the future of our young people and our continent, we must begin to have really sober home-grown discussions that are grounded in fact and precedent. We must not promise the stars and the moon to young people who will fall behind anything that promises them the prospect of a decent life.

In my experience, such discussions too often assume the form of feel-good indabas where untested ideas take on the role of law. Where eloquent sounding dogma drowns out dissent one adage at a time and myths are regurgitated at will and at the expense of those who quickly become advocates and blind believers yet still almost always find themselves empty handed on the other end of the tunnel.

What do you think?

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40 thoughts on “3 Common Myths & Misconceptions I’ve Heard About Entrepreneurship and Africa

  1. You have highlighted myths, what of solutions? How best should we tackle the issues you have raised. Too often, we complain and little or nothing is done to address the issues raised or discussed.

    1. It’s ironic that all you have done is complain about my observations. You have done little yourself to propose any solutions, it’s fine though, I don’t believe you or i have any special responsibility to find a solution for each and every problem that we may observe, that will leave us with very few problems we are qualified to talk about.

      I believe sharing my views here and highlighting these issues was a good place to start. After all, what I am saying is not law, my views must be tried and tested.

  2. You are waffling.

    In 1996 are you aware how many people had an internet connection ? Did you even have an e-mail by then.

    TechZim please spare us the garbage.

    1. You are incoherent at best.

      What do 1996 internet statistics have to do with anything, please clarify. And to answer your question, no, in 1996 I had no email address, I had just learnt to spell my name at that stage, I doubt I could have pulled off the @ symbol anyway.

  3. The magic of Africa exists in her people. Despotic entities may do their best to hold the people down but that ultimately will fail.

    1. To the extent I understand what you have said, i agree with you. That said, nothing is guaranteed, whether success or failure we must systematically work to achieve it. Destiny has nothing to do with it, we must rise above the challenges that we face through creativity and systematic progress.

      1. Was not referring to “destiny” Taf but to “… rise above the challenges that we face through creativity and systematic progress …” The people have the drive, They have to identify, prioritize, and overcome the challenges.

  4. Good analysis, we need african entpreneurs in the trenches to tell the true story of african entrepreneurship. the problem is we have motivational speakers, beaurocrats, tender entrepreneur’s and journalist telling the stories of african entreprenurs. strive masiyiwa has started this critical process via his facebook page. the other thing is that tender entrepreneurship is not the entrepreneurship that will create jobs. where are the books by or of african entrepreneurs. where are the mentorship networks by african entreprenurs who have succeeded for the youth. where are the venture funds by successful entrepreneurs funding new entrepreneurs. until we tell our own stories others will tell them the way they want to or the way they think things are.

    1. Thanks G

      To answer your question, books by Africans about Africa can be found on 🙂

  5. I agree with you, there is need for Africa to wake up from the fantasies we have been preaching. Internet has potential to drive the African economy but not in the short term, mainly because of cost and awareness. If you look at a typical African most of our time is spent on hustling for food, few of of us have the liberty to invest time into building things like Apple or WhatsApp. How best we can tackle this issue is for the wealthy to invest in Africa instead of importing Rolls Royce’s or splashing money in Dubai. The moment Africans can eat, then we begin to dream big and build huge enterprises. In terms of comparing us to silicon valley, there is a huge gap between Facebook finding success here and our locals. Facebook has the resources to make it last and the ability, most of our businesses are started by people who need to eat and not to scale, The only way forward is for the wealthy to invest in Africa, then we build something that can attract FDI. Other wise we can only hope for Africa’s future.

    1. King, I think you are right. I think you have proposed some valid potential solutions, whether they are viable or not, i can’t say.

      As far as Facebook is concerned, I think it is now clear beyond doubt that a Sillicone Valley approach can work in Africa, it has and it is, that alone means lessons must be drawn. We need quantifiable evidence backed by facts and figures not guesses. Can a Facebook success be replicated by Africans? if not, what conditions must be put in place to make it so.

  6. You (& the techzim team) need to improve your writing & research skills. How come you do not know whether it’s ‘Silicone’ or ‘Silicon’ Valley? Capital letters in the middle of a sentence? Small letters where it should be capital? Iroko TV or iROKOtv? This seems like a copy & paste article. The least you could have done is to name or quote your sources. This is pathetic writing in my own standards. And some say you are not journalists, so what are you? Zwingrish writers? Maybe, maybe not. Get your house in order – at least for those who use your site for research purposes who need well researched articles & not this zwingrish thing you are doing.

    1. “This is pathetic writing in my own standards” I’m sure you meant “This is pathetic writing BY my own standards”.

      Now that the grammer and irony are out of the way, I think you are right, very much so, I – like many other people – need to improve my writing and be more thorough before submitting my opinion pieces. I am, after all, not a journalist. However, in the absence of journalists addressing these very pertinent issues that we face everyday, I must do what I can to fill the void and articulate the issues as best as I can. Within the context of making a point, grammer – just like a strong accent – become semantic and irrelevant. The point I am driving towards has been made and understood by most.

      However, I digress. A discussion on grammar and linguistics is outside my scope of expertise or interest. When you wish to discuss the actual contents of this article, I’ll be happy to respond.

      That said, thank you for your corrections.

      1. Great job talking about the issues that burn you. I personally didn’t care about grammar. As a tech guy in the diaspora I am following your dialogue and wish you all the best

  7. its funny that if we hear a French or spanish lady speaking broken english we africans make a note of how sexy she is. but if a africN lady starts speaking broken english we start lauging and rush to critic her. most africans know at least 2 indegenious languages plus english. most westerners only know their language and don’t bother to learn any other african language let alone an african language. we need to develop our own languages and make them a medium of communication, learning and teaching. we have small countries like poland, england, Netherlands and with very few people in comparison to most african countries but they learn and teach in their own languages. why not in africa.

  8. the reason why the internet is not an effective tool for economic development in africa is an issue of numbers. internet penetration ratea are still low, very few people have smartphones beyond the major capital cities and internet is still expensive. when ths powers that be make internet widely abailable at reasonable prices then and only then will the full potential of the internet for change in africa be realized.

    1. I think you are exactly right.

      Internet usage is not necessarily the catalyst for prosperity but maybe instead it is the product of a prosperous nation. is that what you mean?

      1. the internet is a byproduct of a prosperous country but the internet is one of the best equalizers in terms of giving people the opportunity to learn, reduce costs, improving access to knowledge and even services. so with that knowledge african governments should create critical mass access to internet at an affordable price. maybe even make basic internet aceess free. with the benefit of hindsight in how the internet has created opportunities and a new economy we need regulatory measures to fastract widespread internet access at reasonable cost. not by nationalizing

  9. Grammer or grammar? I prefer “opinions” that are supported by facts & not creating your own, eg:

    “While institutional FDI in Africa is on a major
    decline, Private Capital is experiencing modest
    growth from less than US$1 billion in 2009 to
    over US$4 billion in 2014.”

    If they are your own estimations, how did you come up with such figures? Do you see the importance of naming your source(s)? You cannot compromise the quality of your work because your grammar is irrelevant or improperly paraphrase your “opinion”

    But what do I know? At least some “opinion writers” know better than me:

  10. Nyaya chaiwo iri pahurumende dzese dzemuAfrica!!

    Hurumende inofanira kuve pamberi ichidyara nekudiridzira makambani anozofanira makuru mangwana.

    What have tend to happen is that most african gvts are specialists beggers! They are only interested to implement technology where there is hope to extend their stay in the grave train.

    What we lack is a gvt which is passionate about its pple’s welfare. And as pple we do not have the mentle to face our problems head on, we want others to feel sorry for us and give us freebies.

    Every technology revolution in all countries was driven by responsive gvts, but this is not the case with Africa, its actually the opposite.

    We lack leadership who understand the technology world but accept technology where there is direct personal benefit. My attention was recently drawn by Gweru councillors who still do not understand how to use laptops they were given bt are now demanding new upgrades.

  11. @why lam not criticising anyone on their english but our researching skills. Ini chirungu handinyatso kutochigona! And if we do not learn then @macdchip is correct.

    @tafmakura I prefer “opinions” that are supported by facts & not creating your own, eg:

    “While institutional FDI in Africa is on a major
    decline, Private Capital is experiencing modest
    growth from less than US$1 billion in 2009 to
    over US$4 billion in 2014.”

    If they are your own estimations, how did you come up with such figures? Do you see the importance of naming your source(s)? You cannot compromise the quality of your work because your grammar is irrelevant or improperly paraphrase your “opinion”

    But what do I know? At least some “opinion writers” know better than me:

    1. @Theriskguy your corrections are becoming frivolous, yes I mean grammar, what do you think I mean?

      As far as my cited figures, these are not my own statistics please find various sources below:

      These are according to the London-based African Private Equity and Venture Capital Association.

      There is also a 2015 paper by the Overseas Development Institute (ODI) which has the figure at $4.1 billion in 2014 (and 5.4 billion in 2015)

      You can also check the following:

  12. Taf, I think on the issue of grammar and spelling, you should not try to defend yourself or play ignorant. Just be humble and make corrections, we all err. I see you mentioned how weaker local currencies are affecting growth, this is not true. Most major economies are deliberately trying to weaken their economies to spur growth.The weaker your currency, the more attractive it becomes to export to major economies.

    1. The King, on the issue of grammar and spelling you are right. I may have gotten a bit defensive there.

      On the issue of currencies

      Most major economies do devalue their currencies (not economies) to spur exports as a product of monetary policy. However, what is happening in Africa is not intentional, for example in South Africa. Instead it is a result of depressed demand of commodities (minerals and natural resource) which are the major export of Africa. China was the main customer and invested heavily in infrastructure and telecoms in exchange for raw materials, infrastructure in turn created jobs and stimulated the economies etc.

      Devaluing currencies at this stage when demand for our exports is low would only put more pressure on our economies.

  13. kune vanoti muarticle hamuna masolutions, nyatsai kurava futi. Inga wani zvanzi, investing in agriculture,manufacturing, education and infrastructure ndipo pane growth yedu wani!ngatisave vanhu vanongofarira kucriticiza chete.

  14. These are the words of a man who has no
    idea where problem solvers come from, a man
    who reasons only based on what he can see
    not in the world of possibilities. Japan in the
    1940s couldn’t be compared to the USA let
    alone China and they are more mythical than
    Africans. Just because someone pitched up an
    entrepreneur challenge in Africa and all
    participants replicated Silicon Valley stuff
    doesn’t mean all Africans are incapable of
    their own creativity. I mean who has ever
    entered an Entrepreneur competition and went
    on to move huge mountains? no one cause
    most of the guys who enter these
    competitions are half baked entrepreneurs who
    just want to be seen and heard with no vision
    what so ever

    1. You are right, i think evidence based reasoning is better (not always).

      I believe facts, figures, actionable steps and a clear understanding of precedent not an emotional belief in destiny and the magic of waiting for time has created more problem solvers.

      By 1941 Japan was a relatively super power at war with the US and more powerful than China. By the 1960s Post war Japan was the second largest economy. It’s rapid rise had a lot to do with US aid, good Japanese economic policies and the cold war against communist USSR. Japan was neither magic nor a miracle, it was the product of systematic planning, unity of purpose and unique circumstances and events around the world at the time. The same is true for China’s rise. My point is that these are not miracles, they are the fruits of home-grown creativity and hard work. Japan is not more superstitious than Africa, it is in fact one of the most secular societies in the world today.

      Most first time young entrepreneurs especially those in very young infant industries are always half baked. Most successful entrepreneurs are products of past failures (that’s how they get baked) let them fail and learn. Although I have my own misgivings about pitch competitions, from my experience, they do produce success stories. Because most entrepreneurship ventures fail no matter where you are (7 out of 10 in the US) if you don’t look carefully you’ll think everyone is failing.

      1. When USA hit Japan with a nuclear warhead, the country was flattered. A number of European countries which seemed to be super powers like Germany were flattered after WW2 and took calculated steps to recover as you just said.

        Similarly Zimbabwe was somewhat an African super power when it decided to go to a sociopolitical war with Britain. It endured adversities up to 2008 just as Japan endured adversities despite getting US aid. It is those adversities that led Japan to Industrialize on it’s own and it is those adversities that sparked the birth of Tech companies like Toshiba, though it sparked to world fame in the 1980s.

        Despite the hard evidence of the stats which i don’t usually bring up i just reason. Problem solvers are people who went through severe adversities and overcame them. People who came from nothing to something big, self made people. If you look at the likes John D Rockefeller senior, Thomas Alva Edison, Nikola Tesla. These were all men who after experiencing problems in their childhood went on to solve similar problems and made money.

        People think that challenges or adversities in a nation signal it’s slow sinking. It might but at the same time they could yield the next problem solvers. See when people have to think hard everyday about how to make the next dollar like we did in 2008,that’s sparks your natural creativity.

        So it’s not a case of an angel coming from the sky and being Africa’s Bill gates, or one of our ancestors taking physical foam to do the magic. It’s a case of did those adversities burn away our soft relaxed nature and yield hardcore serial thinkers or did they fry our brains to the point that we gave up.

        If those trials and tribulations were fruitful, expect the youth who went through that period to be the ones who carry the torch forward. Not the present 50+ year olds who run the country. Who are so behind even when it comes to handling a tablet or pc.

  15. And I agree with you there on the Internet and app thing though. Apps are not more than luxuries which Americans came up with which only serve to feed our leisure time.

    Apps will not run factories or build an economy. Americans are busy diverting Africans from the source of their problems, excess imports. Africans should start manufacturing their own stuff before talking about the Internet and stuff.

    1. Technically apps and the internet can run factories, don’t get me wrong, apps and software are very important.

      What I meant is that in and of themselves apps will not build economies or employ many people, they are tools after all, they can only be leveraged to catalyse tangible economic activities in other sectors of the economy, it is in these other sectors where Africa’s growth will happen.

      1. Like I said, only look to apps when you have a factory running. And I’ll back up my point, apps on a tablet or pc software don’t run a factory they are just a means of observing the state of Networked industrial equipment.
        PLCs do, or the software inside a PLC does which is written in assembly programming language or ladder logic. And again the primary focus should therefore shift to knowing how to run automated manufacturing systems through Programmable Logic Controllers so we make cheap products like the ones which come from RSA or China.

        An automated tyre factory can make up to 500 tires a day at least, while ours like Dunlop, run by working people can make about 50. And you can’t expect such a factory to compete at a global scale.

        As such focus should shift to manufacturing, and software programming languages like Java or C given last preferences. You can’t expect to design a computer or plc program if you don’t have the computer or plc

  16. We can never say the Internet will be the Ultimate driver of the ‘African Growth’, but that’s the best shot we got. The internet is the only platform that can put me out there right now and face whoever, whatever, wherever.

    1. I Respectfully disagree

      The internet is not the only shot we have. As a Zimbabwean or African you have plenty of opportunities to make money from many other non-internet related activities, the reality is that not many young people in Africa have figured out a real way to make money from internet businesses (those that do are a minority). Even if today you can face anyone, anywhere, wherever, you still need to offer them some value. In Africa chances are that value is related to an agricultural or natural resource that exist outside the internet.

      Commodity trading, agriculture, manufacturing, retail etc are were your best bet is. There I agree the internet can be very useful when leveraged to support these businesses.

      1. Without a strong diverse economy, the internet is a hammer without a nail to hit, a spanner without a nut to screw etc

  17. Good insights & and a great start to interesting conversations. It comes down to the narrative – in Europe when analysing and looking at economic growth its largely done by country – startup & tech in France is very different from the UK. However in Africa we usually prefer to go with a single story. What’s working and accelerating growth in Kenya is very different from whats happening in Namibia. I also think another myth is that all this can happen outside of government and that hubs and incubators will save us all. You still need good policies and governance to create viable ecosystems for all types of businesses to thrive.

    1. I couldn’t agree with you more. You raise a very interesting point. As Africans we always say that Africa is not a country, yet we are increasingly talking in terms of the entire continent, particularly as far as the internet and technology are concerned. One would think Sub Saharan Africa is a single entity with one set of rules and realities.

      Is this a good thing or a bad thing? Are we finally united as Africans that we no longer see the need to talk in terms of countries? i don’t know. But it’s very interesting.

  18. Hi it’s me again the developer from econet. Sorry to barge in like this. So this PHP thing, does it run all the time on the server? or do I shut it down when I go home?

    I really appreciate you helping me keep my job at Ownai guys. Zvichaita

    Kind Regards
    Developer from Econet

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