Agricultural entrepreneurship refers to farmers’ ability to change or abandon old models and enter new phases of agriculture.

And this leads us to today’s episode of the #TEFAdvocacy space where we talk about the policies that affect entrepreneurs in Burundi.

Burundi’s economy is dominated by Micro, Small, and Medium Enterprises (MSMEs). According to research done by finclusionlab.org, micro firms (those with less than 5 full time workers) represented 34% of the population of formal firms while small firms (those with 5 to 19 full time workers) represented 46% of the total number of formal firms. Hence, micro and small firms represented 80% of all formal firms in Burundi in 2007.

Among 9 countries surveyed in East and Southern Africa, Burundi has the lowest level of financial inclusion with 85.7% of the population not using any financial product (BRB — Banque de la République du Burundi, 2012.)

Even though MSMEs in Burundi seem to have the same level of access to formal financial services as in other developing countries, the term structure of commercial banks’ resources is too concentrated on short-term credit. As a result, MSMEs use bank loans for short-term needs such as working capital or lines of credit rather than investment, as the latter requires medium and long-term loans. It is also relevant to note that the cost of credit is prohibitive. Data from Burundi’s central bank (or BRB) Short-term lending rates vary between 14.3 per cent for import to 17.4 per cent f or working capital credit, the most dominant form of short-term credit. These high levels of credit imply that to be viable, an MSME must have a very high rate of profitability in order to pay back its loan and cover its other costs.

Our Recommendation

• With respect to the sectoral distribution of credit, productive sectors such as agriculture and industry benefited from 0.5% and 7% of total credit, respectively, while credit to trading represented 43 per cent of total credit (Nkurunziza et al., 2016; Nkurunziza and Ngaruko, 2008). Burundian banks also allocate a substantial amount of their credit to the government. On average, credit to the government represents 38 per cent of total credit, which is high even by African standards, as credit to government in the rest of Africa represents, on average, 25 per cent of total credit. Combined with the inefficiency of government resource use in Burundi, the large number of financial resources allocated to government by banks crowds out resources that could have been more efficiently used by private firms. We recommend the excess allocation of financial resources to the government be minimized and more, up to 40%, be allocated to the private sector. We believe this will strengthen the country’s primary revenue sector, Agriculture, by more than 50% increase in production.
  
  
• The pattern of credit allocation in Burundi illustrates a disconnect between the financial sector and the real economy. Agriculture is the mainstay of the economy in Burundi . In 2014, it represented 39 per cent of GDP against 42 per cent of GDP for the services sector (World Bank, 2015). Agriculture is also where most jobs are created. According to estimates, the sector employed 70 per cent of the work force in 2009 (LO/FTF Council, 2014). We also recommend that the financial resources availability should be higher for the Agricultural sector, as this is the country’s primary revenue sector. This will also lead to more job creation, which will aid the eradication of poverty and increase the country’s economic GDP.

In conclusion, the size of a firm in developing countries is the major determinant of its efficiency, resilience, profitability, and access to inputs. The dominance of Burundi’s business sector by MSMEs makes its flagging private sector particularly vulnerable to the country’s political and economic instability, which brings about the need for availability of financial resources to MSMEs to bring about rapid growth of the country economically.

~ Author: Oluwadamilola Oladepo

The post Burundi – The Heart of Africa appeared first on The Tony Elumelu Foundation.

Education Is The Most Powerful Weapon Which You Can Use To Change The World

Education provides entrepreneurs with cognitive skills to better evaluate and exploit entrepreneurial opportunities. 

On today’s episode of #TEFAdvocacy, we will be discussing challenges affecting entrepreneurs in Senegal. 

Shortage of jobs in Senegal means people are forced to fend for themselves to generate their own income. This “survival entrepreneurship” could be a unique opportunity for the country, however, if used as a catalyst to create SMEs with the capacity to develop long-term activities. 

This is the reason why the Tony Elumelu Foundation (TEF) has stepped in to assist in funding young entrepreneurs in countries like this to help generate income for themselves and create direct and indirect jobs within the country to further improve the economy of the country.  

Despite the opportunity granted by TEF and the “survival spirit” of the Senegalese, they are still faced with several challenges limiting them to achieve their goals and have financial freedom which in turn improves the country’s economy.  

Amongst the many challenges faced, poor investment in education has been a major issue. According to the Human Development Index (HDI), Senegal is not only one of the poorest countries in terms of GDP per capita, but also in terms of its human development. The lack of investment in the education sector has led many citizens to settle for menial jobs which is now a norm among the citizens. This has limited a lot of citizens to birth ideas that can change the narrative of the country.  

A research done by AfDB in 2009 shows that 47% of total education expenditure was allocated to primary education, 27% to secondary education and 24% to higher education. This breakdown reflects the belief that primary and secondary schooling are more important than tertiary education for poverty reduction, and has been encouraged by international development agencies. 

The issue has also been a major reason for unemployment leading to more employment in industries that require little to no educational background. 

Our Recommendation

We recommend that the government invest more in education and ensure there is a significant rise in the number of school students across every state in Senegal. These investments should cut across primary to tertiary as this will help meet the standard efficiency required of the education sector.  

According to the African Development Bank (AfDB), the efficiency of education is assessed based on two criteria: internal and external efficiency. Internal efficiency is jointly measured by the ability of the system to retain the maximum number of pupils in school, results obtained by pupils and available resources (teachers, classes, equipment, etc.). External efficiency corresponds to the match between the provision of education and market needs. The rate attained in Senegal falls far short of the target rate of 83% set by the World Bank and it is considerably lower than the rates recorded by other West African countries (Ghana 73%, The Gambia 91%, Mali 79% and Cape Verde 85%). The secondary education enrolment rate is much lower – 31.4% in 2008, while enrolment in higher education did not exceed 8.3% in 2008.  

Strategic investment in the education sector will help see this rate rise reasonably and give future entrepreneurs the exposure they need to ideate, plan, develop and deliver solutions. It will also provide the platform they need to have the basic knowledge every entrepreneur needs to provide solutions to problems facing the country. 

We at TEF also propose that the government should create initiatives that will expose citizens to vocational training that can help them be independent rather than the norm of bare labor jobs. This platform will also help them think of innovative ways to do carry out tasks thereby making them enterprising.  

We believe that prosperity in Senegal is prosperity for Africa at large which is why we at TEF are working tirelessly to fulfill our mission of improving lives and transforming Africa.  .

~ Author: Oluwadamilola Oladepo

The post To be educated is to be informed appeared first on The Tony Elumelu Foundation.

” We need to prioritise our women. As a father of five girls and being surrounded by women in the workplace, I see first-hand, the energy, the potential, and the professionalism in women’s leadership and I encourage it.” 

Africa leads the world in terms of numbers of women business owners. In fact, women in Africa are more likely than men to be entrepreneurs. Women make up 58 % the continent’s self-employed population. However, a recent World Bank report, profiting from parity, shows that women entrepreneurs across sub-Saharan Africa continue to earn lower profits than men (34 % less on average).  

On average, women-owned microenterprises in Uganda generate 30 percent lower profits than their male counterparts (World Bank 2019). Lower levels of innovation, lower use of capital and labour, and sector-based sex segregation are all factors associated with women entrepreneurs’ poorer business outcomes relative to men in Uganda.

Women in Africa are more likely than men to choose entrepreneurship not because they have a burning passion or the right skills, but because of a lack of better opportunities. Wage job opportunities are relatively scarce in Africa and this is even more the case for women who often have lower levels of formal education and may face discrimination in hiring practices. Additionally, women tend to be given most of the responsibility for home-based work, including childcare, so small-scale home-based businesses may be one of the few ways they can generate an income to help cover the needs of their families. 

Hence, many women who become entrepreneurs out of economic necessity do not intend or have the skills to build large and successful companies. Their decision to start a business instead of seeking wage work is influenced by important constraints such as differences in skills, capital, networks, time and family formation, occupational opportunities, and safety 

According to Oppong (1994), women’s work has often been hidden in the tasks associated with domestic and marital roles, which has led to women’s relative invisibility in the official labour statistics of many countries in sub-Saharan African.  The reason for this admitted bias towards women’s work, in contrast to men’s work, is that economic activities of females have suffered from misconceptions, poor measurement and recording, and consequent neglect, since they have tended to be subsumed under, women’s roles as daughters, house-wives and mothers. 

Furthermore, findings from Uganda also pointed to sectoral segregation as an important determinant of the gender earnings gap in entrepreneurship. In Uganda for example, the average monthly profit in the female-dominated saloons sector is just USD 86, while those in the male-dominated electrical sectors enjoy average monthly profits of USD 371.

Recommendations  

To address the drivers of gender gaps, the Ugandan government could consider implementing policies and programs focused on enhancing women’s entrepreneurial skills. Providing these women entrepreneurs with the training they need to develop the right skills and a growth-oriented mindset to spur innovation; improving their use of and control over capita.

Also improving women entrepreneurs’ skills through adequate training in male-dominated sectors, and providing access to capital could support women entrepreneurs in crossing over into more profitable male-dominated sectors. 

~ Author: Eniye Aduwari

The post Empowering Female Entrepreneurs in Uganda appeared first on The Tony Elumelu Foundation.

Corruption remains a major barrier to doing business in Angola, despite some progress. It creates private and social deadweight losses and hence, entrepreneurs are willing to pay corruption rentals (bribes) in order to circumvent red tape that reduces productivity. Estrin et al. (2016) suggest that less corruption and stronger protection of property rights increases the growth of entrepreneurship. Angola has developed a comprehensive legal framework to combat corruption, but still confronts challenges with implementation.  

In 2021 Angola was ranked 136 out of 180 in the Transparency International’s latest corruption perception index.  

Public servants routinely ask for bribes, what they refer to as “gasosas” in the local language. This is usually to supplement their low wages, levying additional charges for bureaucratic services such as permits, licenses and registration of businesses. Business owners are expected to make informal payments to “get things done”. 36 %of companies identified corruption as a major constraint to doing business in the country (World Bank & IFC, 2006). 

While progress has been made in recent years to improve the overall regulatory environment, the business environment remains difficult. It is plagued by pervasive corruption, complex bureaucratic procedures and an underdeveloped financial system (US Department of State, 2010). 

President Lourenco has prioritized the anti-corruption fight, putting forward new laws on Anti-Money Laundering, Combatting the Financing of Terrorism, and the Proliferation of WMDs; the Law on Repatriation of Financial Resources; and development of a national anti-corruption strategy. There have been a number of high-profile court cases against senior officials which have resulted in some custodial sentences and a slew of dismissals. This fight against corruption is a vehicle to ensuring a conducive business environment for Angolan entrepreneurs.  

Recommendation   

We further recommend hat policy makers reduce taxes, reduce red tape and increase the efficiency of public institutions that deal with entrepreneurs. 

Also, companies should assess the business climate in the sector in which they will be operating or investing, have an effective compliance program or measures to prevent and detect corruption, and become familiar with the relevant anticorruption laws of both Angola and the United States. 

~ Author: Eniye Aduwari

The post Corruption Barriers to Entrepreneurs in Angola appeared first on The Tony Elumelu Foundation.

On today’s episode of #TEFAdvocacy, we will be discussing challenges affecting entrepreneurs in Nigeria. Quintessentially policy-based logistics challenges. 

We started advocacy [through the Tony Elumelu Foundation] to get the public sector to understand the need for businesses to do well.

Tony O. Elumelu, CON

In a discussion with some Nigerian entrepreneurs, the foundation found that logistics poses a major challenge for entrepreneurs in commerce. We had a chat with two entrepreneurs; Hills-Tech Stores and The Salesman Phones & Gadgets. They deal in buying and selling of smart phones and gadgets in Ikeja computer village Lagos, and they represent majority of similar businesses. 

These businesses have the same challenge with logistics. They stated how the cost of deliveries through dispatch riders within the same city are incredibly high and continue to increase. It was discovered that the state government exploits these logistics companies dry with one payment or the other and so they have no option but to correspondingly increase their fares.  

Inter-state cargo logistics is now a grave opposition to these entrepreneurs. There is a need to ship fragile and time sensitive items within the shortest timeframe through the airports, but the exorbitant prices and frequent flight cancelation has crippled these efforts.  

Road users are not left out. “There is always the issue of police stop and search or the no movement in the south-eastern part of the country.” These things cripple business activities and raises the issues of extra cost and integrity issues between these entrepreneurs and their customers. Items spend longer on the roads and even get damaged in some cases. 

Recommendations 

With the mind that entrepreneurs are the lifeblood of the nation’s rise, the Nigerian government ought to do right by these young entrepreneurs in providing a smooth landing into starting a business and running same. The government is responsible for policy making, and should be such that champions entrepreneurship. We propose that certain fees and charges specially pertaining to logistics services should be properly regulated and standardised to favour all parties involved. 

The post Logistics Challenges are Crippling the Activities of Nigerian Entrepreneurs  appeared first on The Tony Elumelu Foundation.

“We need a more active private sector. The private sector must engage with the government to let them know the need to address the job issue so as to get massive investment to create job opportunities for the youths.” 

Libya has recently experienced significant political, social and economic changes in its state and society. Due to decades of state dominance on most of economic activities under the former regime, the country’s private sector has been small and marked as informal (Ali and Omar, 2015). In the context of Libya’s oil-dominated economy and continued large role of the state as an employer (with the public sector employing some 75% of the country’s labor force), there is little understanding of the propensity for significant and sustained entrepreneurial activity.

The situation is changing rapidly as more Libyans can see new opportunities in the emerging private sector. Even though some efforts towards creating a more private sector – oriented economy have already occurred, there are still significant difficulties in actively supporting these aspirations in the emerging private sector. 

“Young people’s idea of the ‘dream job’ is changing because of the economic situation and the reality they are facing in Libya. They realize that the kind of job they would like to have is hard to get so they conclude that they would rather create that job themselves to do what they love and what is best for the society,” Amir Neihoum, Tatweer Entrepreneurship Campus (TEC) manager.

Our chairman was absolutely right when he said, “Young entrepreneurs and those they inspire are the lifeblood of Africa’s rise.” 

There is a general agreement in entrepreneurial research that entrepreneurship fosters economic growth, creates new jobs, opportunities and generates prosperity in an economy. In addition to launching new products and services, entrepreneurial activities support innovation and are capable of effecting social change. 

A further crucial point is that entrepreneurship with its above-mentioned abilities can be a key driver in the upcoming peace building – and stabilization process for the country. Hence, creating a more private sector – oriented economy would be of upmost importance since a well-functioning private sector contributes to an encouraging business environment, which in turn fosters entrepreneurship. 

Recommendations  

The National Expert Survey by the Global Entrepreneurship Monitor (GEM) studies environmental factors—in GEM’s terminology— Entrepreneurial Framework Conditions (EFCs) that were proved to influence the development of entrepreneurial activity and quality of entrepreneurship in a country. These include; entrepreneurial finance, government policy, government entrepreneurship programmes, entrepreneurship education and training, commercial and legal infrastructure, entry regulations, Physical infrastructure, Culture and social norms, Research and Development. The level of entrepreneurial activity in Libya depends, among others, on the quality of the respective EFCs in the country.  

Some authors (Omar, A., Ali, F., & Imhamed, S. 2020.) have provided recommendations in their scholarly paper on how to provide good and actionable insights into possible improvement opportunities for making the Libyan entrepreneurship environment more positive and attractive and able to enhance the start-ups.  

The followings represent policy implications suggested for Libya:

• Libyan government should adopt SMEs development policy that seeks to improve the performance of SMEs and enhance the Libyan entrepreneurship environment in general. This policy should include a strategy for strengthening the overall legal and institutional framework. It should also promote enterprises creation and their diversification, which can provide employment and income opportunities and contribute to economic growth.  

•  There is an urgent need to make a shift in the current Libyan education system – on what is being taught at all levels of education system and methods used in teaching at these levels. To this end, entrepreneurship education and training can have a role, where entrepreneurship should be taught, at this early stage, at the higher education level in all academic disciplines. In addition, entrepreneurship training should be available for all graduates, with a more focus on knowledge and skills needed to manage a new business. It should provide a better understanding of the entrepreneurial capacity of Libya. Hence, education and training related to entrepreneurship should perhaps pay more attention to EFCs in Libya and the relevant aspects that may get limited attention but could play an important role for entrepreneurs.  

•  It is becoming clear that all unfavorable factors of EFCs in the Libyan business environment can be directly linked to the major weaknesses and limitations from which the national innovation system in Libya suffers for a long time. The main aspects of these weaknesses and limitations are reflected in the absence of some important institutions and the weak linkages and interactions between the existing relevant institutions. These represent obstacles that can hinder the growth of entrepreneurial activities in Libya, especially high-growth businesses. Thus, specific improvements need to be urgently applied to develop relevant elements of the national innovation system, where the propriety should be given to reforming the education and funding systems and government regulations related to entrepreneurship. 

~ Author: Eniye Aduwari

The post Libya: Healthy Economic Environments to Stimulate Entrepreneurial Activities   appeared first on The Tony Elumelu Foundation.

 “I think the past two years have been quite traumatic for humanity. It exposed the way leaders were becoming too nationalistic instead of being global and we’ve seen the devastating impact across the continents.” 

Small and medium enterprises (SMEs) are possibly the hardest hit in all the countries, and this implies that there is need for special economic revitalization programmes and packages. Report from Statistica shows that as of March 2, 2022 the total number of confirmed COVID-19 cases in Morocco was 1,161,290. This makes Morocco the second most affected country on the Continent, with South Africa leading.  

Small and medium-sized enterprises constitute 92% of the Moroccan economic fabric, and they are among the most seriously affected by the current pandemic. Small and medium enterprises are likely to be severely affected, as they tend to be more concentrated in sectors that have been directly affected by COVID-19 response measures and are typically more credit constrained than larger businesses. Importantly, small businesses make up the majority of companies, and are responsible for a substantial fraction of employment. 

According to Global Entrepreneurship Monitor (GEM) 2020 Entrepreneurial Activity Review, Morocco experienced a difficult 2020 economically, with the pandemic having a significant impact on several key measures of entrepreneurial activity, leading to the shutdown of many businesses. At the level of the general population, 71% of Moroccan adults (18–64) reported a loss of overall household income as a result of the pandemic. This was one of the higher rates among GEM economies.  

One response to this economic reality remains an irony as Morocco’s adult population increased its intention to start a business within the next three years, from 42% in 2019 to 49% in 2020. This was the largest increase, proportionally, of any GEM economy. This might lead to the assumption that most of this increase came from pandemic-driven necessity; however, only 50% of those prospective entrepreneurs stated that this was influenced by the pandemic, suggesting a collection of other factors driving this fairly large rate of aspiring entrepreneurs in Morocco. On one hand, Morocco’s Total early-stage Entrepreneurial Activity (TEA) rate declined from 11.4% in 2019 to 7.1% in 2020, meaning that many of 2019’s prospective entrepreneurs (42%) did not make the leap into actively starting a new venture. A substantial 82% of those Moroccan respondents currently involved in TEA see no new opportunities as a result of the pandemic. A more alarming 95% of those in the Established Business Ownership (EBO) category also see no opportunities. 

This presents us with a dual impact of covid 19 on small and medium-sized enterprises (SMEs) in Morocco; where a percentage of the adult population have increased intention to start a business within the next 3 years, while Established Business Ownership (EBO) see no opportunities. While others lost businesses, some saw opportunities. 

Recommendations for Equitable and Sustained Recovery  

Given the number of businesses that have had to fold up, we propose revitalization programmes for entrepreneurs. Such programmes may include special lending programmes, entrepreneurship education emphasizing innovation and digitizing entrepreneurship etc. Entrepreneurs and start-ups should be more opportunistic during this period, pivoting their businesses through some kind of “repurposing” and redirecting existing knowledge, skills, people and networks to suit current needs. 

~ Author: Eniye Aduwari

The post Covid-19 and the State of Small and Medium Enterprise in Morocco  appeared first on The Tony Elumelu Foundation.

“I see a future driven by fundamentals. Entrepreneurship is the only way to help create access to further opportunities.” 

According to Kasi Insight, industries and enterprises in Kenya are hit with new laws and regulations every day. These laws are often carried out by the government and stakeholders to regulate the operations of enterprises. These laws can pose a huge threat to the growth of the economy because enterprises don’t have control over certain operations, therefore, their potential is limited. 

Recent changes and developments to business laws and the regulatory environment.

According to the 2017 Doing Business in Kenya report, the ease with which businesses can be registered has a bearing on the number of entrepreneurs who start businesses in the formal sector, where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government. In Kenya, starting a business involves seven procedures, takes 22 days and costs 21.1 percent income per capita for both men and women. 

Regulatory policies and environments should encourage entrepreneurs to set up their businesses and explore new opportunities, ideas and also take on calculated risks by keeping administrative, regulatory and licensing burdens minimal. 

Hence, government needs to create the optimal environmental conditions for individuals to start and grow businesses. Global Entrepreneurship Monitor’s National Entrepreneurship Context Index (GEM NECI) provides policymakers with insights on how to foster such an environment. The index measures the 12 entrepreneurial environment conditions (EFCs) that make up the context in which entrepreneurial activity takes place in a country. Our focus here is one of these environments: Government policies, regulations and bureaucracy. 

The heavy impact of these regulations will typically limit the potential of these enterprises and the growth of the economy will equally be affected. 

Recommendation 

With the world’s technological advancement, we propose the introduction of ICT-based procedures for business registration and reporting. Online registrations, where feasible, are one of the most effective ways to speed up company registration and streamline procedures to ensure entrepreneurs do not have to go to multiple government agencies. It serves as a way of eliminating bureaucratic processes and red-tape attached to business registration and obtaining of licenses. Once these steps for business registration can be conducted online, entrepreneurs can easily access documents and obtain certificates, with the right regulations in place as well. 

The long and tedious procedures for start-ups should be eliminated to encourage entrepreneurs bring their ideas to fruition. Among the benefits are more registered businesses, financial resources and job opportunities. 

~ Author: Eniye Aduwari

The post Kenyan Startups Should Have an Optimized Regulatory Environment  appeared first on The Tony Elumelu Foundation.

“Economic transformation lies in the hands of young people, entrepreneurs who have great ideas, energy and audacity of what and how they can contribute to economic growth of the continent”

At The Tony Elumelu foundation, we believe that the private sector holds the key to unlocking Africa’s Economic potential. Therefore, youth entrepreneurship is an important lever for economic growth and employment creation in Africa.

According to Idris Dempsey (CEO, FNB Commercial Banking), entrepreneurship empowers citizens and is required for any emerging market to move forward and successfully integrate into the global economy. The South African government has recognized this contribution and therefore has the goal of establishing South Africa as an entrepreneurial nation that rewards and recognizes entrepreneurship.

To this course we see the contribution of the Small Enterprise Development Agency to promote entrepreneurship and development small enterprises by providing customized non-financial business support services that result in business growth and sustainability. This is in collaboration with other players like Endeavor South Africa, First National Bank, Kauffman Foundation amongst others. Even with all these, the greatest challenge faced by entrepreneurs in South Africa remains access to capital, particularly seed funding.

The issue is not the availability of funds but awareness and preparedness amongst entrepreneurs. There is a general lack of awareness about the procedures and courses of action involved in gaining funding.

In addition to this is the application process which tends to be bureaucratic and heavily laden with protocol and red tape as funders endeavour to gain confidence and assurance when granting funding to entrepreneurs.

Beyond funding is the lack of basic Entrepreneurial training. “From preschool to university graduation, young South Africans are educated and prepared to join the workforce, but this training often fails to include the basic groundwork required for entrepreneurship. This omission in our education system can hamper aspiring entrepreneurs from attaining the key skills they need at the outset of their fledgling business.” – Gugu Mjadu

Recommendations

Our recommendation will be for entrepreneurs to be more proactive in seeking funding opportunities and arm themselves with adequate information. A wealth of information lies on the internet and mass media to investigate various forms of funding available. This should be done alongside sharpening their business ideas or operations to ensure they are ready and eligible for funding opportunities and to see that their business is in line with funders mandate.

The post The Way Forward For South African Entrepreneurs appeared first on The Tony Elumelu Foundation.

On today’s episode of #TEFAdvocacy, we will be discussing policies affecting entrepreneurs in Namibia.

A researcher ranked taxes and levies as No 2 on the Top 5 Challenges Affecting Entrepreneurs in Windhoek, Namibia. According to Lazarus Amukeshe of The Namibian, economists and analysts have called for a leaner tax for small enterprises over the past few years, and the ministry only gave in to the demand towards the end of last year, saying they will need at least a year to study how best to tax small and medium enterprises. The Namibian tax code does not discriminate between taxpayers according to size and Schlettwein, a past minister of finance said this will not change. This statement was made in January 2020, we are in 2022 and the tax rate is still 32%. Entrepreneurs have complained of this tax rate being too high for their businesses. This tax rate will prevent some entrepreneurs from registering their businesses which leads to tax evasion and reduced income for the government. 

Of 190 countries ranked in the World Bank’s Doing Business 2020 report, Namibia ranked number 104.  Namibia ranked lowest in the following three areas: Registering Property (173); Starting a Business (165); and Trading Across Borders (138). There are 10 procedures spanning over 54 days, involved in registering a business in Namibia. This is a time that entrepreneurs cannot afford to lose because most startups have little to no employees and the burden of running the business is on very few people. When time that should be spent on running the business is diverted to registering the business, the business will most likely suffer some setbacks or even losses. 

Recommendations 

We propose that the government look into better ways of reducing the burdens of taxes and levies in favor of SMEs. SMEs play a vital role in shaping a company’s economy; therefore, they should be given preferential treatment in some aspects in order to promote their growth and development. 

We propose that the government reduce the steps involved in registering a business, make some of these steps online and easier. 

The Micro, Small and Medium Enterprise Policy that was approved by the cabinet and parliament of Namibia in 2016 was a step in the right direction. It addressed many of the challenges faced by entrepreneurs and also made great recommendations towards solving these challenges but unfortunately there is not a significant difference in the MSME space. There has been a lack of implementation of the recommendations made. 

It is our hope and wish at TEF that the government of Namibia implements the MSME policy. It will definitely go a long way in improving entrepreneurship in Namibia which will in turn improve economic growth.  

~ Author: Opeyemi Ayodeji

The post SMEs are to Pay the Same Tax Rates as Large Businesses appeared first on The Tony Elumelu Foundation.