BUSA president calls on black business to take advantage of new African growth opportunities

BUSA President Sipho Pityana has called on South African business – and black business in particular – to take advantage of the increasing economic opportunities on our continent.

Speaking at the Black Business Council’s Black Business Summit today, Pityana outlined the combined opportunities presented by the Africa Continental Free Trade Agreement (ACFTA), President Cyril Ramaphosa’s chairmanship of the African Union, and the World Economic Forum’s new Africa Growth Programme (AGP). “All of us gathered here have an opportunity to be meaningful partners,” he told the summit. “These opportunities beckon for you, our country and indeed the African continent. Africa has great potential not only to become a global growth frontier, but to attract investment that would lead to meaningful development and growth.”

Pityana said the Africa Growth Platform — launched at WEF Africa in Cape Town in September 2019 – was intended to address Africa’s job creation crisis by massively scalingup millions of SMEs and start-ups across the continent

It will be guided by a WEF Africa Regional Stewardship Board, co-chaired by Pityana and former World Bank vice-president Dr Oby Ezekwesili.

“The AGP will bring together governments, investors and entrepreneurs to enhance funding prospects and create better enabling environments for small business growth.

“It is a business community-driven response to the current youth unemployment crisis and entails helping small businesses grow beyond their domestic borders and compete in international markets through intentional linkages to the supply chains and value chains of large corporations in specific industries.” The AGP does not aim to reinvent the wheel, he said, adding: “It aims to build on existing entrepreneurship support initiatives by fostering collaboration and sharing of best practice between the key stakeholders, in order to increase their collective impact faster.

“For example, we will seek synergies with the African Union Development Agency-NEPAD, which recently launched the “100,000 SME’s for 1 million Jobs by 2021 “campaign.

“Like the AGP, this initiative places special emphasis on harnessing Africa’s youth demographic dividend.” The AGP aims to scale small businesses in three ways: • by securing commitments from governments to implement policy reforms aimed at stimulating and accelerating business growth; • by building a community of investors to enable better coordination and pooling of resources that could facilitate larger subsequent rounds of funding; and

• by creating and sustaining a community of SME and start-up businesses, promoting collaboration and sharing best practices. Pityana emphasised the crucial role that young people and small and medium enterprises must play in contributing to growth, saying: “With our fastest growing young population, Africa is well placed to exploit technology and innovation in the era of the Fourth Industrial Revolution.

“This calls for an innovative approach to helping Africa’s SMEs reach the scale where they become sustainable.” Pityana said youth unemployment in Africa was a high risk for the future of the continent. And in South Africa, 8.2 million young people between the ages of 15 and 34 are not in education, employment or training.

“These young people cannot be spectators for long; at some point they will forcibly demand a stake in the economy. This tough economic backdrop makes today’s conversation even more critical.

“Two thirds of Africa’s 420 million young people are currently unemployed, which highlights a clear need for new solutions to drive entrepreneurship and employment growth. Quality education, policy certainty and a conducive regulatory environment are non-negotiable if we want to entice more foreign direct investment our way.

“This is critical because the African youth dividend runs the real risk of being overrated. The developmental deficit in the continent is an opportunity to attract investment, so long as we can ensure a stable policy and regulatory environment.”

He pointed out that Africa’s young population is “well-endowed with entrepreneurial spirit with early-stage entrepreneurial activity 13% higher than the global average. However, due to insufficient support and infrastructure, the continent’s start-ups are 14% more likely to fail than those elsewhere in the world. “We can achieve a lot more if all of Africa’s stakeholders act in concert to create jobs by scaling 100 million SMEs and startups by 2025.” He said it was in South Africa’s interest to have a thriving small business sector: “More people get employed, the market gets bigger, incomes grow, poverty reduces, social cohesion is enhanced.” “It is common cause that SMEs contribute significantly to economic development and are associated with discovering new markets and exploiting them to their advantage,” he said.

“Likewise, SMEs are the heart of founding new ventures and a source of income and employment for millions of Africans. This means SMEs are central to wealth creation by stimulating demand for goods, investment and trade.

“We need to transcend the thinking that small enterprises exist only to be part of the supply chains of larger businesses. We should enable high growth small businesses to be disruptors that will create whole new industries and jobs. These are the next generation of corporations.”“A thriving, dynamic and growing small business sector is a critical component of an inclusive economy. We also need to specifically ensure the successful integration of womenowned businesses in Africa’s high growth agenda.”

Pityana called on the BBC Summit – which ends tomorrow — to come up with three concrete initiatives to take the AGP forward in 2020. “It is my hope that we emerge from this summit with concrete, actionable plans with clear milestones,” he said. “The tide can be turned, and it must be turned.”

Sipho Mila Pityana BUSA  (President)