Many Liberian leaders would agree that for a poor country like ours, entrepreneurship is key to growing the economy, creating employment opportunities for the many unskilled young people and securing the fragile peace.
However, there are hardly any deliberate attempts to support entrepreneurship in the country amid massive youth unemployment and poverty – a threat to national peace and stability.
Recently, the director of the prestigious Anzisha Prize visited Liberia in search of young entrepreneurs for the prize’s 2017 application cycle and she was shocked over the apparent nonexistence of entrepreneurship among young people in the country.
The Anzisha Prize presents its awards to young entrepreneurs who have developed and implemented innovative solutions to social challenges or started successful businesses within their communities.
In her reflection on the trip, the director, Melissa Mbazo, wrote:
“After a few days of trying to schedule meetings with youth entrepreneurial support organizations, it was evident that the subject of entrepreneurship is not at the top of the Liberian agenda. Organizations such as SMART Liberia, the Movement for Sustainable Alternatives, and the Business Startup Center, are trying hard to encourage entrepreneurial thinking and entrepreneurship but they are climbing a steep and high mountain.”
Melissa’s notes on the sad state of entrepreneurship in Liberia did not come to me as a surprise at all. If anything, it affirmed what we have been bemoaning for years.
As many African countries blossom with entrepreneurial ecosystems and start-ups, Liberia is yet to begin a serious conversation on youth entrepreneurship and how local entrepreneurs can be supported to launch businesses that employ many people and solve some of the many problems affecting our country.
When one considers Liberia’s situation, one cannot help but wonder why entrepreneurship does not feature prominently in policy discussions.
Unless Liberia adopts aggressive policies that institutionalize the culture of entrepreneurship to empower its hugely unskilled, unemployed, and “impatient” young population, we are headed
for a huge crisis.
According to the International Labour Organization’s 2016 report, 63.8 percent of Liberians live below the poverty line and 90 percent of young Liberian workers are in the informal sector. Youth unemployment is estimated at 85 percent.
With a reduction in large corporate and private sector investment in Liberia due to the falling price of iron ore, rubber, and oil on the international market and the devastating effects of the Ebola crisis, it is clear that the answer to our problems lies in deliberately empowering our people to create jobs for themselves.
Although the government, via the Ministry of Commerce and Industry, has made some strides through the E+Program—an initiative under the Liberia Innovative Fund for Entrepreneurship “designed to promote youth entrepreneurs through training and access to Finance” – a lot more is needed to create a thriving entrepreneurial ecosystem.
While there are a few successful youth-led entrepreneurial start-ups in Liberia (for example, J-Palm Liberia and Cookshop.biz), these successes have more to do with the entrepreneurs’ access to quality entrepreneurial education and networks outside of Liberia and not the support they received from the local government.
There are many other hardworking and self-motivated young people with business ideas that might not see the light because of the absence of factors that make us celebrate the few that have made it. This is why our government must initiate programs that create a conducive environment for youth entrepreneurship.
Entrepreneurship as a Culture in Liberia
I have compiled a list of factors that hinder youth entrepreneurship in Liberia along with recommendations on how to create an entrepreneurial ecosystem that will empower Liberians to create jobs for themselves, their families and other Liberians while diffusing the ticking time bomb of youth unemployment and preventing us from the next civil crisis. I believe these recommendations are viable solutions to addressing the question of youth unemployment.
Education and Skills
The informal sector is pervasive in Liberia; as a result, our country sees a significant amount of informal entrepreneurship. These businesses are led by those with little or no training in business management, which prevents them from professionalizing or scaling up.
Although broken now, our education system was designed to prepare the workforce for more traditional roles in established firms. None of our schools offer entrepreneurial education that gives students hands-on learning through managing small projects which can offer them a clear path to developing critical thinking and creative problem solving—skills needed to successfully build and manage business ventures.
Entrepreneurship in Our National Curriculum
Our government needs to integrate entrepreneurship into our secondary and tertiary education systems to cultivate the culture of innovation and expose students to entrepreneurship in their early years. Just like English and Chemistry, we need to have Entrepreneurship as part of our core curriculum.
Since most of our students don’t make it to the university or the formal sector, this course will give them the skills to successfully run a venture and understand how things like balance sheets and income statements work.
It will expose them to the possibilities of starting a company and the financial rewards and challenges that come with self-ownership. It will teach them how banks and taxes work and by the time they graduate from high school, they will not only know how to register and manage small companies, but they’ll also develop critical thinking and creative problem-solving skills that will be useful for them throughout their lives.
And regardless of options and specializations in the university, every student should take at least a course in entrepreneurship before graduation as it’s done in Nigeria. In countries like Mauritius, students start learning about entrepreneurship at the primary level. This will enhance students’ entrepreneurial skills and challenge them to apply entrepreneurship to their various fields of study.
For most emerging African entrepreneurs, access to funding remains one of the major hurdles to running a successful venture. According to the OMIDYAR Network’s 2016 report on entrepreneurship in Africa, “Bank lending policies favor more well-established firms compared to new companies, given their limited or non-existent historical financial or bank records.” Not being able to raise money to finance their ventures, many young people are easily discouraged about pursuing entrepreneurial projects.
Our government needs to collaborate with the private sector to initiate a local angel investing ecosystem that makes funding available for start-ups, especially those who do not have the network of friends and family that traditionally play this role.
To encourage angel investors to fund start-ups, the government should incentivize them through tax cuts to reduce their risks. In Singapore, angel investors in local start-ups receive tax cuts and new businesses are given tax exemption status for three years. No doubt, this is one of the many reasons for Singapore’s great economic successes.
Business Advisory services
Early start-ups struggle to access professional and affordable business advisory services like lawyers, accountants, and even consultants. Many local entrepreneurs do not have the expertise or professional network to address the many functional needs of their business.
If any, these services target only established firms and big businesses. Entrepreneurs who lack the information, skills, or cash to do a rigorous analysis of their business model, business environment, and market potential to convince investors and banks to fund usually don’t get anywhere because of these constraints.
Youth Entrepreneurship Fund and Incubations
Our leaders need to partner with international organizations like the World Bank, the private sector, and entrepreneurial NGOs to set up business incubator in major entrepreneurial centers of the country that assist small businesses and young entrepreneurs with business advisory services like setting up cost structure, business plan development, feasibility studies and other technical services required to jumpstart their businesses.
This will encourage youth entrepreneurship; promote business innovation while reducing unemployment and crime in the country.
For instance, programs like the Youth Enterprise Development Fund in Kenya and the Federal Government Youth Entrepreneurship Program in Nigeria are designed by these governments to support youth businesses and wage war on the disease of youth unemployment. These programs don’t just incubate start-ups; they also fund youth businesses through business plan competitions. Kenya is one of one of the hottest innovation hubs in Africa partly because of these programs.
Youth unemployment often accompanied by crime doesn’t just go away because we recognize it and make beautiful speeches about its solution; we must take deliberate, practical steps to fight it.
Making Entrepreneurship Attractive
We need to introduce policies and programs that make entrepreneurship attractive and enviable. Our young and ‘politically savvy population’ must be shown that entrepreneurship is a better springboard for escaping poverty and breaking the cycle of dependency than politics. For example, after the economic crisis in South Korea in 1997 that led to high unemployment, most people fought for government and big organization jobs (present-day Liberia, right?).
But the government, under the “Creative Economy” initiative, introduced policies that changed tax laws and bankruptcy codes. In addition, the government also introduced its ‘Entrepreneur of the Month’ program to raise the stature of entrepreneurs. Today, South Korea is the world’s 15th largest economy with GNI per capita of US$22,670, compared with US$67 in the early 1950s.
Countries don’t just attain developed status with good intentions and false promises of better days ahead. Our government must go beyond good intentions and put in the work, enact programs that ‘move the needle’ in ways that empower people to develop their own jobs and create a better environment for all.
I have never seen a better way of doing this than entrepreneurship.
Featured photo by Gbatemah Senah