As a Bountifield Advisory Board Member, Daniel Sopdie has vast experience in economic and entrepreneurial development, including working with strategy and implementation for technology-based programs around the world. He has a passion for sustainable food and agriculture systems and supporting the development of small enterprises in communities to develop local and regional economies. An entrepreneur himself, Daniel shares insight into how developing entrepreneurial enterprises is an impactful strategy for economic recovery in the wake of the global pandemic.
Many economists and other experts have predicted that the global economy will suffer greatly from the COVID-19 pandemic, and it will take years to have a complete recovery. There is a lot of uncertainty about the future of the global economy, but developed countries are using different tools to stimulate their economies and reduce the pandemic’s impacts on their economies. Most nations, especially in the Western world, have come out with fiscal and monetary policies to stimulate their economy. These proactive policies have kept the hopes and dreams of many alive. The fact that developed countries have strong institutions and functioning democracies also guarantees that something might be done in terms of fiscal and monetary policy to get things back to “normal.”
In contrast, the sub-Saharan African region appears to be the part of the world that will suffer the most in terms of economic recovery. Most sub-Saharan African nations have weak institutions, poor infrastructure, and under-developed markets with constant political unrest, which means that many of these countries are unequipped to effectively deal with socioeconomic damages of a global pandemic like COVID-19. The post COVID-19 world could be devastating economically for many African nations in the region and the road to recovery will be extremely long and difficult for many, even those countries that may have more relative stability than others.
Some African countries have already reached agreements with international financial institutions as part of an effort to boost economic recovery and their COVID-19 responses. This trend will persist as these nations’ economies continue to be weakened by the effects of the pandemic. Although financial support and investments will certainly help many of these countries contain the effects of COVID-19, it is important to note that a more beneficial economic strategy for long-term economic prosperity in Africa will be to support impactful entrepreneurs who are purpose-driven and socially aware of their environment.
We know that entrepreneurship challenges in Africa have persisted over the last decade even though different public and private sector entities have invested many resources to promote bottom-up entrepreneurship in Africa’s emerging economies. Most of the work being done has concentrated on equipping African entrepreneurs with the same basic tools as their counterparts in developed countries. However, access to financial services and markets, business connections, education and training, mentorship and support systems are still lacking, especially in rural communities. The work that was being done by NGO’s, African governments, and economic development partners to address these gaps might suffer with the new focus on addressing economic issues specifically related to the global pandemic.
There is no doubt that weak institutions and other socioeconomic challenges have contributed to slowing economic growth across Africa. To achieve faster growth, many countries across the continent will have to work not only on the structural foundations of growth, but also on finding creative solutions to incentivize entrepreneurship. We know that governments cannot always effectively do this work without external partners that often bring capital as well as other tools that contribute to enhancing economic policy reforms and entrepreneurs skills. Partnerships between Africa and external economic development allies is not only important in order to advance growth policies and entrepreneurship, but also to develop a market economy in the region.
Institutional economic development actors and entrepreneurs in developed countries seem to have a consensus on the purpose of entrepreneurship as an important driver of economic growth. Because of this consensus, the promotion of entrepreneurship receives substantial support from government, academic institutions, venture capitalists, businesses and nonprofit organizations. The fact that these societies already operate in a market economy makes it easy to develop the best tools to address issues around access to financial services and markets, business connections, education and training, mentorship and support systems. This support creates an entrepreneur’s mindset and means that basic entrepreneurial needs, like access to education or mentors, are not seen as a barrier to succeed as an entrepreneur.
Entrepreneurs’ mindsets in developing nations appears to be different from those in the developed world. A study on African entrepreneurs found that there are three types of entrepreneurial mindsets: the survivalist entrepreneur, the success-driven entrepreneur, and the society-minded entrepreneur. These differences in terms of mindsets also influence the way entrepreneurs in each category approach their business activities. In an environment where access to basic needs is still a barrier for entrepreneurs, the complexity around African entrepreneurs’ mindsets creates a difficult task for African institutional economic development actors and partners to find the most effective tools or resources that will help all entrepreneurs prosper.
If we agree that there are differences in mindsets between African and developed countries’ entrepreneurs, we should also point out that all these entrepreneurs share these important entrepreneurial traits: hope, optimism, and dreams. Hopefulness is a crucial aspect of all entrepreneurial leadership because, as Dr. Melodena Stephens Balakrishnan from the Mohammed Bin Rashid School of Government wrote, it expresses the “faith that you can achieve your goal, and this can be reinforced by positive affirmation. Hopeful thinking leads to better divergent thinking (thinking out of the box, with higher quality ideas and more details). And we know startups need to be creative in finding solutions,” — solutions which are independent of location, nationality, and socioeconomic situation. Having hope is a component that every entrepreneur uses to create a pathway to succeed. “Hope” is such a powerful trait that raises the confidence to be more entrepreneurial and this greatly helps every environment in terms of economic development.
Being an entrepreneur also means that you get to fulfill a dream and have the opportunity to pursue what may bring you happiness for the rest of your life. The dream is what gives many entrepreneurs the passion and the willingness to take the risks. Such traits can be seen in entrepreneurs all over the world. Even though they may have different mindsets in terms of their approach to entrepreneurship in their respective geographic location, there is no doubt that they share traits like dreams. Dreams are important for us to see beyond ourselves and they are surely what drive and motivate every entrepreneur around the world throughout their journey. However, entrepreneurs in developed countries are more likely to pursue and realize their dreams as they have a well-organized support system in their countries. This is not the case in most African countries.
It is crucial that Africa and its economic development allies continue to put more emphasis on promoting entrepreneurship, and especially invest in impactful entrepreneurs. This type of entrepreneur, who views societal challenges as opportunities for innovation, is rare and needed. Efforts to boost economies after the global pandemic should continue prioritizing entrepreneurship. This strategy is important because in a time when many people all over the world are experiencing emotional challenges due to economic uncertainty, continuing to invest in African entrepreneurship initiatives will help keep the dreams and hopes of many alive. Dreams and hope are important in terms of building African entrepreneurs’ resiliency and optimism, which are the most powerful tools to master in order to navigate different challenges they will face in their journey and contribute to the continent’s progress in terms of economic development.
Normal economic forecasts and scenarios created in developed countries are difficult to apply to many African countries because of weak institutions and dysfunctional democracies. Africa will need outside capital from both Western investors and philanthropic entities, and expertise not only to stimulate its economy post COVID-19, but also to continue promoting impactful entrepreneurs and enterprises for continued inclusive growth. Outside capital and expertise helps address important gaps that keep hope and dreams of many entrepreneurs alive. Dreams and hope represent the first drivers of entrepreneurs’ motivation and resilience, which are important in navigating a challenging journey in Africa, and important to continue to nurture in Africa’s entrepreneurs.