At the opening of the 2015 Global Entrepreneurship Summit in Nairobi, President Barack Obama of the United States and President Uhuru Kenyatta of Kenya announced new investments in African businesses led by women. The White House hosted the first summit six years ago and has since made supporting developing startup ecosystems an important part of its engagement agenda. This year’s summit, the first held in sub-Saharan Africa, brought around 1,000 leading entrepreneurs and investors to Nairobi to discuss the future of startup ecosystems around the world. In particular, the discussion focused on how existing startup hubs can interact with and support emerging ones throughout Africa.
At the 2014 Global Entrepreneurship Summit, President Obama announced a goal of raising $1 billion in investments to promote entrepreneurship in emerging economies. In 2015, he reported that this goal had been achieved with the help of banks, philanthropists, foundations, and the US government. Moreover, President Obama promised that half of the funds would support entrepreneurship projects undertaken by youth and women.
The money will benefit entrepreneurs and businesses in sub-Saharan Africa through the following initiatives overseen or supported by the US government:
- The Overseas Private Investment Corporation (OPIC) will provide $200 million to Equity Bank Group to lend in foreign currency to youth and women operating small- and medium-sized businesses over the course of the coming five years.
- OPIC signed a memorandum of understanding to provide financing to Goldman Sachs 10,000 Women and the International Finance Corporation’s Women Entrepreneurs Opportunity Facility, both of which support women entrepreneurs.
- OPIC’s $50 million Portfolio for Impact program will provide two years of support to smaller and earlier-stage companies focused on generating a positive impact in sub-Saharan African.
- The US Department of State will launch several new Global Innovation through Science and Technology (GIST) initiatives, including the GIST Startup Boot Camps, GIST TechConnect, and GIST STEM Women’s Village Workshops. Collectively, these programs will engage more than 10,000 African innovators, with a special focus on women, by July 2016.
- A third Women’s Entrepreneurship Centers of Resources, Education, Access, and Training for Economic Empowerment (WECREATE) will open in Mali with the support of the Department of State’s African Women’s Entrepreneurship Program (AWEP), StartUp Cup, and the Caterpillar Foundation. WECREATE is already active in Zambia and Kenya. By October 2016, the three centers are expected to train and certify at least 630 female mentors.
- The Essential Capital Consortium Fund, recently launched by Deutsche Bank, will receive a $25 million Loan Portfolio Guarantee from USAID to support social enterprises in energy, health, and financial services, with a focus on sub-Saharan Africa.
Inspired Support for Female Entrepreneurs from the Private Sector
President Obama’s pledge to support entrepreneurship, especially among women, was answered by additional investments. Explaining that women are entrepreneurial powerhouses with the potential to create massive change, he called for organizations around the world to support to female entrepreneurs and businesses led by women. At the time of the 2015 Global Entrepreneurship Summit, private companies around the world had donated $700 million to fuel the next generation of entrepreneurs, and had offered to train and mentor more than a million future business leaders. The most notable contributions include:
- The Mara Foundation pledged to work with a million women and youth entrepreneurs in East Africa through its Mara Mentor Platform, which offers free coursework, one-on-one mentorship, e-learning opportunities, and even financing through Mara Ad-Venture Investments. In addition, women and young people gain access to networking events and internships.
- Over the course of three years, Chase Bank Kenya will make $580 million available to entrepreneurs with small- and medium-sized enterprises, with a special emphasis on lending to youth and women. This initiative also focuses on those entrepreneurs who do not have access to traditional financing.
- The Global Entrepreneurship Network (GEN) announced the launch of GEN Kenya, which will include an investment of $100 million in local programs to develop startup ecosystems.
- The Coca-Cola Africa Foundation (TCCAF) will invest $4.5 million in a new program to empower youth by teaching them key business skills. The so-called Youth Empowered for Success (YES!) program will ultimately offer employment and mentoring to 25,000 young Africans, both girls and boys. YES! targets marginalized youth populations in six African countries and uses TCCAF’s considerable technological and strategic partnerships to offer exciting opportunities.
- Understanding the challenges of securing funding at the critical seed stage, Village Capital announced that it would earmark $13.2 million to support early-stage startups working to address major societal problems. While this funding is available to entrepreneurs around the world, VilCap Investment estimates that it will benefit around 25 Kenyan entrepreneurs.
All of this investment in the African startup ecosystem promises to fuel growth and ensure that the people who face the largest hurdles have a fair chance at establishing and growing their own businesses. Presidents Obama and Kenyatta see entrepreneurship as one of the keys to economic development in Africa, and it is exciting to see so much international support for the continent’s business sector.