The lingering effect of the Covid-19 pandemic is still impacting businesses and economies around the world, including Africa. One of the demographic groups on our continent that has been particularly affected, are the youth. While the pandemic amplified the challenges our youth face, such as limited job opportunities, access to affordable education, and so on, it has also created new opportunities for them to innovate, adapt to the new reality, and become Africa’s next generation of entrepreneurs.
The pandemic highlighted the importance of entrepreneurship in driving economic growth and innovation on the continent. Many African entrepreneurs stepped up to provide essential goods and services, during and after the pandemic, such as personal protective equipment (PPEs), hand sanitizers, and various other medical supplies. They have also adapted to the changing market conditions, such as pivoting to e-commerce platforms to reach customers and shifting their business models to focus on more pandemic-related products and services.
However, these very same young African entrepreneurs are yet to fully overcome the following barriers that have been exacerbated by the COVID-19 pandemic. They include:
- Limited access to funding: The pandemic has made it more difficult for young entrepreneurs in Africa to access funding. Many investors and financial institutions have become more risk-averse due to the economic uncertainty caused by the pandemic. This has made it harder for young entrepreneurs to secure the much-needed capital that they need to start or grow their businesses.
- Disruption of supply chains: The pandemic disrupted supply chains globally, making it harder for young entrepreneurs in Africa to import and export goods due to some restrictions that have been put in place. This has also made it harder for them to source the materials and products they need to manufacture their products, and to reach their customers.
- Reduced demand for goods and services: The pandemic has led to a significant reduction in demand for many goods and services, particularly those that are not considered essential as people have been forced to cut back on their spending due to job losses and economic uncertainties. This has impacted young entrepreneurs in Africa who may be operating in industries that have been affected by the reduced demand. This has also affected the marketing efforts of many young entrepreneurs in Africa, who have had to find new ways to reach their customers.
- Closure of businesses: Many businesses in Africa have been forced to close, as they were unable to recover from the financial/ operational disruption due to the pandemic.It has also impacted young entrepreneurs who may have been relying on these businesses as suppliers or customers.
- Changes in consumer behaviour: The pandemic has led to seemingly permanent changes in consumer behaviour, with many people still preferring to shop online rather than in-person. This has created opportunities for young entrepreneurs who have been able to pivot their businesses to focus on e-commerce. However, it has also created challenges for those who have not been able to adapt to these changes.
- Increased need for innovation: The pandemic increased the need for innovation globally, particularly for young entrepreneurs in Africa who have been able to innovate and adapt to the changing environment, as they are able to continue operating and even scale their businesses.
- Economic downturn: The pandemic has caused a significant economic downturn in Africa, with many businesses struggling to stay afloat. This has affected the ability of young entrepreneurs to secure funding and access other resources they need to start and grow their businesses.
Despite the challenges brought about by the pandemic, there have been positive developments and opportunities for youth entrepreneurship in Africa such as;
- Boost in online sales: The pandemic has accelerated the shift towards online shopping, presenting an opportunity for young entrepreneurs in Africa to reach a wider audience and expand their businesses through e-commerce platforms.
- Innovation: The pandemic has forced young entrepreneurs in Africa to be more innovative in their approach to business. Many have had to pivot their business models to adapt to the new reality and find new ways to generate revenue.
- New markets: The pandemic has created new markets for young entrepreneurs in Africa, as people have started to focus more on locally sourced products and services. This has created an opportunity for young entrepreneurs to showcase their products and services and build a customer base.
- Diversified funding pool: The pandemic has led to an increase in funding opportunities for young entrepreneurs in Africa, as governments and other organizations have recognized the importance of supporting youth entrepreneurship during this difficult time.
- Increased government support for youth entrepreneurship: With many governments providing funding and other forms of support to help young entrepreneurs overcome the challenges they face.
- Increased collaboration: We see a surge of collaborative activities among young entrepreneurs in Africa, as many are coming together to share ideas and resources.
Having observed the aftermath of the Covid-19 pandemic on African entrepreneurs some of whom resorted to extreme measures to adapt to the changing environment, there was a surge in support from the public and private sector, one of which is the Tony Elumelu Foundation, to come forward, collaborate, and empower these young entrepreneurs.
Governments and International organizations need to provide more support to African entrepreneurs. This can include financial empowerment, such as grants, and improving infrastructure and access to markets.
While the COVID-19 pandemic presented significant challenges for African entrepreneurship, many African entrepreneurs have adapted and found innovative ways to respond to the pandemic. To ensure the long-term success of African entrepreneurship, governments and international organizations need to provide African entrepreneurs with sustainable support that promotes self-reliance and equips them to overcome the structural challenges affecting their businesses.