3 Ways the US Supports Promising African Entrepreneurs

“I’m here because, as the world gathers in New York City, we’re reminded that on so many key challenges that we face – our security, our prosperity, climate change, the reduction of conflict – Africa is essential to our progress. Africa’s rise in not just important to Africa, it’s important to the entire world.”

–  United States President Barack Obama

Many African countries are experiencing tremendous economic growth, and while more work remains to be done, the future seems promising. One factor that has contributed significantly to Africa’s success is the number of bright, hardworking entrepreneurs on the continent. These entrepreneurs have successfully launched startups in a number of economic sectors, including finance, financial technology, solar and alternative energy, education and training, and many others.

Leaders of nations around the world understand and appreciate the importance of an economically-viable Africa. As such, these countries have committed significant resources to stimulate an African economy brimming with potential.

This article examines three of the organizations the US government has established to help buttress Africa’s growing economy. In particular, it discusses a number of commitments made to assist African entrepreneurs.

  1. YALI and the United States African Development Foundation

YALI logoIn December 2013, President Obama started a program called the Young African Leaders Initiative (YALI) to “provide virtual resources and vibrant physical spaces to equip young African leaders with the skills and connections they need to foster change in their communities and their countries.” Members of YALI have access to virtual training in leadership and entrepreneurship, as well as a Facebook group, through which they can connect with other young leaders.

In August 2016, the United States African Development Foundation (USADF) awarded 50 African entrepreneurs from 20 countries a total of $1.25 million. These new business owners will use the money as seed capital for growing their respective companies and social ventures. Since 2014, USADF has awarded more than $2 million of grant funding to 95 YALI entrepreneurs.

  1. African Women’s Entrepreneurship Program

Women comprise a significant number of Africa’s entrepreneurs and business leaders. To empower this important demographic, the Obama administration designed and implemented the African Women’s Entrepreneurship Program (AWEP). The rationale behind the initiative’s founding is that, while African women provide a disproportionate AWEP logoamount of the continent’s labor, they often lack or are denied access to the necessary resources needed to drive economic growth. Furthermore, while Africa’s female entrepreneurs have made significant contributions, they remain economically disenfranchised in several areas, such as Sub-Saharan Africa.

To counteract the obstacles to African women’s full economic participation, AWEP establishes networks of women entrepreneurs. Through these connections, women business owners can grow their companies, increase trade, improve the business environment, and give voice to important issues in their communities. Entrepreneurial sectors represented by AWEP include agri-business, fashion, food processing, and home décor and textiles.

  1. United States Agency for International Development

The United States Agency for International Development (USAID) focuses its efforts on “expanding and deepening partnerships with African governments, businesses, universities, and civil society— as well as with the new generation of African leaders, thinkers, entrepreneurs, and innovators, who are leading the transformation of their USAID logosociety.” Currently, USAID supports a variety of African energy entrepreneurs, particularly those who aim to provide electrical power to Africans who are off the grid.

In August 2015, President Obama announced the awarding of up to $100,000 to 11 energy companies from Ethiopia, Ghana, Kenya, Nigeria, and Tanzania. Via a collaborative partnership with General Electric (GE) Africa and the USADF, USAID has committed to supporting novel energy solutions with the goal of expanding access to affordable, reliable, and sustainable power sources.

Entrepreneurs benefitting from the funds are working on a number of energy solutions, such as home solar systems, solar-powered mini-grids, and micro-financing of assorted energy technologies, predominantly for rural communities. Of the projects that received funding, five specialize in solar systems, three are biogas regeneration projects, and one is constructing a small hydro-electricity power plant. As these firms complete their projects, nearly 10,000 Africans will gain access to electricity and power for the first time.

Future US Commitments in Africa

President Obama spearheaded all three of the abovementioned organizational mechanisms supporting African entrepreneurs. Because the President is nearly at the end of his term, it is difficult to predict whether or not such efforts will continue after he leaves office.

Fortunately, the administration has been working closely with the private sector in efforts to keep the projects funded. The Overseas Private Investment Corporation (OPIC), for example, plans to contribute $200 million as part of a $450 million loan from Equity Bank Group to small and medium-sized African enterprises focused on young people and women over the next four years.

In collaboration with Deutsche Bank, USAID undersigned $25 million of the $50 million to be distributed to social enterprises in developing nations around the world, including Sub-Saharan Africa. According to the White House website, these funds will be used to support entrepreneurs in the energy, financial services, and health sectors.

At the Global Economic Summit (GES) of 2015, the President reemphasized the importance of private sector leaders supporting entrepreneurs around the globe, including in Africa. At the conclusion of GES, it was revealed “private sector companies…committed to train and mentor over 1 million burgeoning entrepreneurs and pledged nearly $700 million of capital.”

Advertisements