DAKAR – Entrepreneurs are central to bridging Africa’s widening inequality gap but most governments on the continent are not doing enough to help them, the regional head of billionaire Pierre Omidyar’s philanthropic arm said.
The Omidyar Network, set up by the founder of eBay and his wife, works through grants and equity investments to maximise the social impact of organisations in sectors like technology, entrepreneurship and government transparency.
It opened an office in Africa last year and has spent $50 million on the continent since 2008, a figure that will rise by $15-20 million a year from 2016, said Malik Fal, managing director of the network in Africa.
Africa’s poor were failing to reap the benefits of an economic growth rate of around 5 percent, Fal said.
“South Africa is now the most unequal country in the world. We are seeing this inequality spreading across the continent,” Fal told a Reuters Africa Summit.
“That speaks directly to our efforts in entrepreneurship because small businesses are the largest creators of employment.”
The Omidyar Network provides grants and investments of up to $4 million. Its entrepreneurship initiative focuses on issues ranging from access to capital to legislation and changing attitudes to failure in countries.
Rankings like the World Bank’s Doing Business index have led to African governments paying “lip service” to improving the environment for entrepreneurs, Fal said: “There’s a willingness from governments but the execution … is sometimes lacking.”
He identified Kenya and Nigeria as exciting prospects and said Rwanda had achieved a lot despite its meagre size and troubled history. Technology, agriculture and clean energy were sectors presenting some of the best opportunities, he added.
But in most parts of the continent, Africans became entrepreneurs just as a means of survival, rather than because there were specific opportunities to exploit.
In many African countries there was a “cacophony” of policies that were not properly thought out and or in line with their needs.
In a bid to meet U.N. Millennium Development Goals over access to primary education, governments had built schools without providing teachers, administrators or a curriculum.
“You have many countries in Africa, including South Africa, where you have schools sitting idle,” he said.
Fal said while nations were trying to be the next Silicon Valley, they needed to think more about what kinds of businesses their economy really needed. “It is very local. It is not even about countries but regions within countries,” he said.
Another priority for Omidyar Network is helping people use technology to improve the transparency of governments.
In Nigeria, it supports Sahara Reporters, a citizen media website that encourages people to publish evidence of corruption and other abuses. It also supports the XYZ Show in Kenya, a satirical television show similar to Britain’s “Spitting Image”.
Omidyar is carrying out a survey of public service delivery in South Africa, Nigeria, Kenya, Ghana andTanzania.
“In Africa, I don’t think we have yet understood the difference between the public service and the government … We need to uncouple that discussion,” Fal said.