Africa entrepreneurs make the most of home advantage

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Arriving at the offices of Micro Sun and Solutions, I am swept into a room buzzing with computers and busy developers. Bluye Haddis, owner of the company, is eager to show off his work, not just talk about it.

One by one, young men and women demonstrate their projects, which range from a university registration system to digital mapping to educational games.

MSS is one of Ethiopia’s few home-grown IT services companies. But it is also a vibrant example of an increasing number of entrepreneurial technology companies in Africa.

Mr Bluye’s firm does more than install and maintain imported technology, it also develops its own software solutions. For instance, MSS created an application that alerts to impending food shortages across Ethiopia’s regions. Mr Bluye now hopes to sell the system abroad.

African firms, says Mr Bluye, should leverage their understanding of the continent’s special qualities. “Taking off-the-shelf solutions and customising them can’t always work. You need to consider a country’s variables from the outset,” he says.

“Our schools use imported educational material. But in Ethiopia, water boils at 97 degrees, not 100, because of the land’s altitude.”

Many Africans see a vast pool of business innovation to be tapped in the region, although they concede that there are many barriers throttling this potential: unreliable infrastructure, no access to capital, a shortage of skilled workers – these are just some of the hurdles.

“In Ghana, everyone seems to be an entrepreneur with an idea,” says Estelle Akofio-Sowah, managing director of BusyInternet, a business technology services provider in Accra, Ghana. “But being stuck, with no money, can be so demoralising.”

Peter Retief, regional chief executive for Africa at Business Connexion, a South Africa-based IT services company, agrees: “There has always been a strong spirit of entrepreneurship in Africa, especially in places like Nigeria and Ghana. But the problem is a question of scale. Small businesses grow well, but it is very difficult for them to become medium size. This is a question of access to financing more than anything.”

Another problem is finding and retaining skilled technical staff. Mr Retief says: “In South Africa, it is not impossible to find skills, although there is a shortage. But in other African countries, it is a real problem. Local people tend to get trained and then go abroad. None of the economies in the region are large enough to retain people with the highest level of skills.”

Ms Akofio-Sowah agrees: “Yes, it is difficult to say the least. The few highly skilled people are very expensive.”

But she also finds that the broader work culture can inhibit business: “How do you get people to have initiative, to think for themselves? You can be taught marketing, but putting it to practice is just as important. In the UK, you have examples to learn from all around you. In a small economy, where’s the stimulation?”

Not that this seems to apply to BusyInternet’s patrons. Besides providing internet services to businesses and homes, BusyInternet also runs a business centre and internet café that is open 24 hours a day – about 1,000 customers use the facilities each day.

“Our café is a hive of activity, there are always people here. They’re working on computers and having meetings. People can save their work on our servers and they use BusyInternet as a virtual office.

“Others are here just to have a coffee, watch a movie or to hang out. The café model really works, it is a perfect model that any large African city could roll out,” says Ms Akofio-Sowah.

BusyInternet also operates a small business incubator, providing office space, connectivity, reliable electricity and business support services for a flat monthly fee, a rarity in Ghana where tenants are normally expected to pay two years’ rent upfront.

Ms Akofio-Sowah says: “It is just a matter of having the right resources to grow your business. It is very stressful to do business in Ghana. Everything is slow and restricted cash flow means you must do business on credit.”

But the price of getting connected may prove to be the biggest hurdle for innovative African businesses.

“Bandwidth is so expensive in Africa, this is the biggest challenge,” says Ms Akofio-Sowah, adding that a 2 megabit line in Ghana costs $9,000-$12,000 per month.

“The government is trying to position Ghana as an outsource destination to compete with India. But the cost of bandwidth is huge. You can’t talk about growth if you have this big barrier,” she says.

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