Ahunna Eziakonwa has a ready-made answer when asked about digital innovation’s potential to solve real-world problems across Africa. The U.N. assistant secretary-general and director of the U.N. Development Program points to M-Pesa, a Kenya-based mobile currency company that predates Venmo and allows people to store, receive and send money from their smartphone without having a bank account.
While Africa’s vastness and diversity allow for entrepreneurship to flourish across communities, it also presents challenges to creating universal solutions for issues such as poverty and food security, because each country has its own capacity for innovation. For instance, while Bloomberg reports that Ethiopia, Uganda, Ivory Coast, Egypt, Ghana, Rwanda and Kenya ranked in the top 10 fastest growing economies worldwide in 2020, the continent still holds some of the poorest nations in the world.
“I think one of the flaws in development practice in the past has been taking Africa almost as a country and [applying] the blueprint development template,” Eziakonwa says. “It’s very diverse – it’s 54 different countries at different stages of their development and with different contexts and dynamics. And it’s important, therefore, that any investment first tries to understand this diversity and the specific context of each country, but also the capacities and capabilities in each place, and then target your interventions based on that reality on the ground.”
However, while Africa’s potential for entrepreneurship bodes well for its economic growth, challenges in cultivating innovation still persist.
Although Africa’s large youth population makes the continent a rich place for innovation, young people also make up 60% of Africa’s unemployed population, according to the World Bank. The young people that are employed are typically part of Africa’s “informal economy,” meaning that they earn money through jobs that do not fall under the regulated economy and tax system. A 2018 report from the International Labour Organization indicates that 94.9% of Africans between the ages of 15 and 24 work in the informal economy, peaking at 97.9% in West Africa.
Eziakonwa says there should be a greater effort to integrate those in the informal economy into the mainstream economy in order to better protect entrepreneurs and stimulate the economy.
“A lot of businesses are in that informal sector and they need to bring them into the main economy – it is something that we are learning that is key to the survival of those businesses,” she says, adding that security can be difficult to obtain for those businesses when cross-border activity is factored in.
“And there’s a lot of cross border work entrepreneurship going on,” adds Eziakonwa. “It is a hotbed for entrepreneurship, the borders, yet there is very little formal protection for those entrepreneurial activities. If you created a more enabling environment for these entrepreneurs, then I think the sky’s the limit in terms of contribution to the national economy.”
