Nigeria and other African countries must increase their levels of innovation and funding access to start-ups and small businesses as entrepreneurs and global leaders canvass more credit access and creativity to get the majority out of poverty.
“The challenge is when a business needs to move from small to medium enterprises, there is no access to capital,” Ivanka Trump, advisor to the president of the United States and entrepreneur, said on Wednesday at the Global Entrepreneurship Summit in the Hague, the Netherlands.
“Investing in women too makes a lot of business sense. We have to empower women particularly and ensure there is a better environment for them to grow,” she said.
Trump said 2.7 billion women did not have the same choice of jobs as men, adding that 104 countries had laws preventing women from working, thereby stifling innovation and entrepreneurship.
Innovation is the process of translating an idea or invention into a good or service that creates value or for which customers will pay, says Business Dictionary. Entrepreneurs in the developing world, especially Nigeria, are innovating solutions to issues relating to health, energy, water, education and other vital human areas. But these entrepreneurs may be overlooking little but critical details that can redefine their future.
“For instance, there is a lot of improvement to be done in our food,” said Feike Sijbesma, chief executive of the Netherlands-based DSM, which plays in health, nutrition and materials industries.
“Our food contains too much sugar, salt, fat and not enough nutrition. I do not think this is what we call innovation,” he said.
“Africa must not copy everything from the West but must look for something that works locally and is sustainable,” he further said.
Tequila Harris, an associate professor in Georgia W. Woodruff School of Mechanical Engineering, said entrepreneurs must not be stuck in their old ways of doing things, as doing that would put them out of business.
“You need to keep learning and innovating to stay afloat. If you are stuck in the old ways, you will be left behind,” she said.
Funding is a key issue inhibiting innovation and entrepreneurship in Nigeria.
Data from MAN show that lending rate to the manufacturing sector averaged 22.21 percent in 2018 and 22.84 percent in 2017.
But the current repo rate (central bank lending rate to commercial banks) in South Africa is 6.75 percent while the prime lending rate (lending rate to customers) is 10 percent.
Similarly, Kenya Central Bank’s monetary policy committee cut the determining bank rate in late July 2018 to 9 percent, from 9.5 percent.
Zambia’s benchmark lending rate is 9.75 percent as of February 2018, while Ethiopia’s is 7 percent.
Nigeria’s monetary policy rate, which is the benchmark interest rate, is 13.5 percent and banks lend at 20 to 30 percent. Up to 90 million Nigerians are extremely poor, with unemployment rate sitting at 23 percent.
“We must remove barriers to access t capital, especially as it concerns women,” Ajay Banga, chief executive of Mastercard.
“Women have the capacity to add $4 trillion to world’s the gross domestic product and they need maximum support,” he said.