ENTREPRENEURSHIP Vs AID, WHAT DOES AFRICA NEED?
PRESENTED TO THE WORLD YOUTH ALLIANCE AFRICAN EMERGING LEADERS CONFERENCE 2010 AT KENYA HIGH SCHOOL ON 12TH AUGUST 2010
By Emmanuel Dennis
My respect to you - Young African Leaders. I am extremely honored to talk with you this morning on the topics that I am very passionate about in the wake of the Bulging Youth Population in Africa. Africa our motherland is a continent rich in mineral resources.urces, a virgin land that has not been explored with beautiful people and a very rich history. Africa attracted Western interests because of its virgin nature of resources through colonization. They came and raped our continent, and stole much of our needed natural resources for their own interest and good.
Of Donors and Aid: We have all sorts of donors with all manner of ulterior motives both big and small with both Developmental and Social agenda. We have organizations like Action Aid in Kenya which was established here over 40 Solid Years ago "Fighting Poverty Together" "Making Poverty History" HISTORY IS STILL JUDGING US THROUGH POVERTY. There is a small village called Budalangi in Western Kenya close to the border to Uganda with its Floods Mitigation Program for close to 30 years now. Next year we will still have floods displacing the people of Budalangi. YET MORE THAN A MILLION DOLLARS HAS BEEN SPENT.
Our main donors the World Bank and the IMF the so called Brettonwoods Institutions who have been running Development Based Aid since Independence. If we did a comparative analysis of the Funds spent on projects in Africa for both Brettonwoods, International, Multilateral, Multinational and National Donors, the money would be a paltry Trillions of Dollars. BUT WHAT Can WE SHOW FOR IT?
The Question of Entrepreneurship Vs Aid is a chicken and Egg issue. What Africa needs is Foundational Aid that has time Limits. Foundational Aid is like a Startup Capital. You get startup Capital given a Good Business Plan. For an entrepreneur can only access loans from banks if they have a good Business Plan and supported by security and other collateral requirements. The Plan must clearly show Financial Returns with capacity to repay the Loan and grow to scale.
Startup Capital may go to acquiring Equipment to support the hardware and software for the business to thrive. More so the Entrepreneur will need Incubation Period supported by Business Development Services to make the business withstand the taste of time.
In INDIA, CHINA, THE USA, EUROPE, the citizens are given Mortgage loans with moratorium periods of over 30 years. Interest rates for a Mortgage or any other kind of Loan from majority of the banks in those countries is as low as 1%.
We have the Youth Enterprise Development Fund in Kenya, a kitty that provides Loans to the youth to start up their business. This is a very good model to develop the culture of Entrepreneurship among youth in Kenya. PROBLEM is that the YEDF is a good example of a Bad Strategy gone bad which failed in its planning. The number of defaulters is extremely high which a shame to the banks. WHY? The Interest rate ranges from 8% to 14%.
A hustler in a slum running a small micro business can't afford a 14% interest rate in a poor country like Kenya? Many banks have interest rates of up to 25% depending on the amount of money required and on whether your loan is fixed or flexible. Remember the between 8% and 25% interest rate loan in Kenya has to be repaid off in 15 years. THAT IS A RECIPE FOR POVERTY because it will give precedence to defaulting and thus impede development then corruption crops in.
LET ME SHOW YOU ONE OF THE OPPORTUNITIES THAT AFRICA IS NOT EXPLORING TO ITS FULLEST.
AGOA and How Mauritius is ahead of the Game over and above all other African Countries. Its only in Africa that you can get Curios, Artifacts, Apparels, Cotton. Think of Coffee, Tea and the rest of the agriculture based produce that we have from Africa. All grow from natural environments and most rain fed and hand processed.
We have the EPZ in Nairobi. Kenya produces the best Rain fed Cotton in the world with capacity of over 400 Bails per year. Through the AGOA arrangement the best exporters of Cotton the United States from Africa are Mauritius, and Egypt. AGOA is one of the biggest opportunities that Africa can harness for development. And to do that we don't need aid, we just need a good entrepreneurship and Financial Model to back it up and we can have higher Dividends more that Tourism and other Production opportunities that we currently exploit for growth.
I have a belief that Entrepreneurship and Innovations are the prerequisite for Economic, Social and Political Development of any society. You cant get it wrong if you invest on Entrepreneurship. The story of a Young Man from Kitui Selling Curios in the US and the Wallmat Connection. He wanted to supply curios and bracelets to Wallmat. He sought audience with the management of Wallmat. Wallmat has 1000 Stores across the US. With 1 Million Customers in terms of traffic/Week . He was given a challenge to produce 1 Billion Bracelets Branded and finished to specification. Even the whole of Kenya can close down to just venture in that kind of business but our cottage industry can't afford to handle such supply chain. The Young man never walked back to Wallmat again. Our Supply, Capacity, Constant Flow of Products and Quality must be high.
MY VERDICT: Aid directed through Development Incorporated approaches is what is making AFRICA poor. HOWEVER: For Entrepreneurship to thrive, you need Start up Aid that is time bound based on a Financially Sound sustainable Business Model.
You the Emerging Leaders of Africa, you need to unite on good Governance and Development of Our Continent. If you don't, the future generations will haunt you for your inaction. We shall not sit and watch as our continent is misruled by Octogenarians leaders who lack in Vision. This is our time to prove to the world that we can. Through our innovative nature, we can come up with sophisticated approaches to development and entrepreneurship. We need to keep discovering so that we can create opportunities for us and our next generation. The Key question is, what legacy will you as an individual leave in your society?
The Global Peace Youth Corps Kenya and the Green Teams are moving a mile higher. Look up to the www.youngleadersummit.org for the upcoming event that we are planning.
Let me take seven minutes to run you through the Green Teams of Africa Vision under the Green Teams Initiative… (Quick Time Player Presentation)