Is Kenya experiencing an entrepreneurship bubble? (Part 2)
Last week we looked at all the hype that has been created around entrepreneurship in Kenya, with cheerleaders ranging from banks and oil companies to president Barrack Obama himself. This article may be considered pouring water on the fire and spoiling the party. Is the opportunity as huge as it is being touted or is it a mirage? Let us analyse the opportunities.
There are many opportunities forKenyan entrepreneurs right now. More than ever. These range from the 30% government procurement scheme for youth and women which will be made more transparent through the e-procurement portal .We have 47 county governments carrying out projects that present opportunities of all kinds of entrepreneurs locally. Our extractives sector is beginning to yield fruit in oil and gas as well as coal mining and other precious stones . Tourism is rebounding thanks to the Popes and Obamas visits and the lifting of travel bans. Kenya is increasingly seen as the new financial hub for the continent with a growing middle class, good internet connectivity. There is what many consider marginally improved governance and security as well as new laws perceived as being business friendly. It now takes 3 steps to register a business in kenya part of it can be done online. As South Africa self-destructs under the effects of populist leadership , many investors are seeing Kenya as the next destination to put up their africa headquarters. Our investment in agriculture is looking up and infrastructure development is on steroids-we are building roads,a new railway ,new ports in Lamu and Mombasa. We have the massive but faltering Ksh 900 billion Lappset project which should connect the coast to South Sudan . We have international airports built in remote places like Isiolo as well as resort cities planned in places like Kilifi and Turkana. We will also have computers in every school for education purposes. MPESA keeps us in the global spotlight as the darling in mobile money innovation and related applications are also drawing in investors as well as inventors. We have the Uwezo fund , youth fund , womens fund and many donor funds focused on all types of entrepreneurship programs whose impact we can only question. Kenya is a basketful of opportunities. And dont forget the world is still saying (in husher tones nowadays) that Africa is still the next frontier.
But the big question remains, are our entrepreneurs really creating sustainable economic value?
What everyone is not talking about , is the harsh reality of entrepreneurship, we have made entrepreneurship look like the most exciting thing for everyone to do.The truth is ,it takes years for a sustainable company to take off, and failure rate is also high. It takes resilience, patience, consistency and a lot of sacrifice in the initial years of building a business to succeed. Entrepreneurship can leave behind a trail of destruction. From broken families, aggressive compliance officers (KRA ,NSSF, NHIF always want a piece of your action), lost family assets, family feuds, tainted reputations , depression, no personal time and other dark sides. No one is telling people that this dark side is what they would be exposing themselves to. A few that survive this journey, quietly reinvest and enjoy their spoils in silence away from public attention. Those that try celebrating their wealth publicly are raided by compliance officers and those they purpotedly owed money as they built their wealth. Entrepreneurship is not as rosy as we make it look in the media.
Many donors , private equity investors and social funds have witnessed this destructive force of entrepreneurship firsthand as they watched many of their initial investments go up in flames either due to the lack of ethics of their investees or outright failures of their investments. Some of them privately admit to having invested more in hyped up companies than substance.What is the actual success rate of entrepreneurial initiatives such as the ones mentioned above? No one really knows, and no one is really willing to measure it either. Many funds have closed down and left a pile of disillusioned and bitter foreign investors , some of whom have had their funds stollen by fraudsters to the tune of millions of dollars. The few that remain committed to funding Kenyan companies have learnt bitter lessons and now scrutinise investment opportunities with a microscope. In the absence of concrete data measuring the success of entrepreneurship programs , hype may continue to win the day until the world decides to find another interesting cause to fund.
Bubbles always burst, eventually and when the entrepreneuship one does , only the well meaning, visionary , passionate and dedicated entrepreneurs who are serving real needs in the market with profitable business models will be left standing and will go on to succeed. Sometimes the ones who succeed are the ones who simply held on long enough until everyone else gave up.
Before you jump out of employment to cash in on all the opportunities being flashed in your face, think twice, entrepreneurship is brutal the world over and it can take you and your family down, nomatter where you are on this planet.
Joram is a strategy and entrepreneurship consultant and MD at www.wyldeinternational.com and blogs regularly on inspiringgreatness001.wordpress.com