Building a future-proof sustainable state we can be proud of
KIZITO OKECHUKWU | FEBRUARY 3, 2020
Image Source: siteselection.com
Whether it’s a collapsing state or anything else for that matter, more often than not, we deem failure as the end of the road and we surrender our will to persevere.
But in the innovative entrepreneurial space, it’s quite different. For example, Elon Musk says that if you haven’t failed hard enough, then you might not have innovated hard enough, while legendary auto innovator Henry Ford reckoned that failure is simply the opportunity to begin again, this time more intelligently. So failure is understandable and quite prevalent in entrepreneurship because it leads to success when it’s calculated.
However, when a state has failed or is failing, it takes decades to get it back on its feet. Most times, the failure that various states experience is not because of innovation or building towards a sustainable future, it’s due to poor leadership, governance, planning and the lack of willingness to build for the next generation.
In this light, the Fragile State Index powered by Funds for Peace published an annual report in 2019 and it’s the first time I’ve come across it though they have been doing this for over a decade. It groups various countries in categories such as Very Sustainable, Sustainable, Very Stable, More Stable, Warning, Elevated Warning, High Warning, Alert, High Alert and Very High Alert.
This reminded me of a conversation I had in Aberdeen with a seasoned and successful entrepreneur during my visit there. I was encouraging him to consider investing in South Africa and/or the rest of Africa. Although he expressed a great love for Africa, he was quick to mention the cloud of uncertainty that hangs over the continent regarding stable economic policies to protect investors, visionary leadership and infrastructure to ensure sustainable investments. Testimony to his opinion is that if one looks closely at the Fragile State index report, no African country even made it to the first four categories of Very Sustainable, Sustainable, Very Stable and More Stable, except for Mauritius and the Seychelles.
The last weeks of January have shown us proof of more economic instability. Many listed companies are set to cut jobs, some predict as many as 10 000 in the first quarter, not to mention other companies that haven’t publicly announced their projected cuts. However, these will be tabled in the first quarterly Labour Survey to be published by Stats SA soon. With this, our unemployment rate could easily jump to 30%. The International Monetary Fund just last week sounded an urgent warning to South Africa to address its policy and economic challenges and predicts the economy to grow to only 1% by 2021.
The number of youth unemployed is also still a major concern and less than 50% of learners that started school matriculate. With no formal education to secure proper work experience, this is a disaster waiting to happen. From a young entrepreneurial perspective, during my discussions with some municipalities, the biggest challenge they face with their various entrepreneurship interventions is that the most applications they receive are people just looking for jobs and they lack even a simple understanding of basic business. So why spend funds trying to convert them to entrepreneurs instead of enrolling them at school?
The linkage between education and entrepreneurship cannot be underestimated. Even a few billionaires that did not attain a higher education qualification will still tell you that some form of education they got earlier on in their life played a vital part in their business success. My MBA thesis in 2013 highlighted the contribution of higher education in advancing entrepreneurship in South Africa.
Entrepreneurship remains pivotal to build a sustainable future for our country. Looking on the bright side, the looming job cuts may entice those former employees to consider entrepreneurship, given the work experience they have banked over the years.
Times are tough. Especially when the four African superpowers are not doing well on the Fragile State Index. South Africa is on Elevated Warning, Egypt on High Warning, while Nigeria and Kenya are on Alert. It does not bode well and is confidence draining for any country that is now ranked alongside Iraq and Afghanistan.
On the flipside, many economic pundits and institutions have positioned Africa as a continent of the future. With our burgeoning youth population, there is no doubt that we have the potential to define our own global path. Yet we must remember that in Africa, our youth population is growing faster than our economy, which is a serious red flag. What’s more, if many of our African youth continue to migrate to Europe, America and Asia – not by choice – but by running away from dire situations at home, then we are in even more trouble.
The latest news of Toyota’s R4.28billion investment in South Africa is a sign of confidence and more needs to be done to improve this confidence amongst various other multinationals.
In Other News
As President Cyril Ramaphosa prepares to deliver his State of the Nation Address (SONA) later this week, many startups are hoping that it will highlight the challenges they face in scaling their firms.
Dubbed a first-class global event, the three-day France Africa-Summit will be held in Bordeaux during June this year and will, for the first time, bring some 15 000 participants together, including political and economic stakeholders to address the major challenges of the years to come.
We are excited to announce that one of our Fintech startups, Maxicash App, is amongst the 5 African countries to have been selected to pitch at the Migration Challenge Startup Competition in Ecuador. The International Organisation of Employers (IOE) and Seedstars competition is targeted at the most promising HR, Fintech, Civitech and EdTech startups with solution-orientated products to improve migration systems that respond to the labour market.