Africa’s ‘Double G’ phenomenon

2013-10-06 14:00

Entrepreneurship may be the key to economic growth on the African continent, but entrepreneurs remain plagued by lack of access to funding and lack of skills.

The African Entrepreneurship Summit held in Mauritius this week confirmed that access to funding was still the major hurdle for most entrepreneurs.

A recent report released by the Omidyar Network on the state of entrepreneurship in Africa also cited poor infrastructure, and a lack of the right skills and talent, as some of the major problems.

In South Africa, more than two-thirds of respondents to the research said schools did not devote enough time to teaching entrepreneurship.

Every entrepreneur has a different story and tech-savvy Ugandan-born Alpesh Patel believes his experience in the corporate sector is what gave him a leg up.

“I used to work at a mobile phone company and we used our own money to start our business,” he says.

Patel started Mi-Fone, a phone manufacturing company, which markets smartphones in 15 countries, making more than $30?million in revenue.

“What we didn’t want to do was become another Samsung or Nokia. We wanted to create a tool to empower people’s lifestyles,” he says.

In Kenya, Patel has expanded the brand to mobile money, where his vision is to turn the phone into a mobile merchant.

He said it was a tough business to get into because “big boys buy from big boys”, adding that people still did not embrace African entrepreneurs.

“People think because we’re a small business we don’t have any muscle or innovation. The smaller carriers speak to us. The big ones won’t,” says Patel.

He says in Africa he encountered the “Double G” phenomenon.

“We call it the gatekeepers and the gravy trains, and you encounter both when you’re doing business in Africa. You get guys who are blocking you as a young entrepreneur and the ones who tell you you’re not going to get anywhere without giving them something, and I think that’s one of the major challenges,” explains Patel.

He has worked in some tough environments, such as the Democratic Republic of Congo, which he says makes it a challenge to get money out, while in Nigeria, it is expensive to conduct business.

Patel says his company is proof you can build a reputable company in Africa in five years with zero funding.

Malik Fal is managing director of Omidyar Network, which has invested $640?million in various profit and not-for-profit organisations since 2004. Its investment in Africa has only been about $50?million.

The company set up shop in Johannesburg earlier this year and is looking to accelerate investment into Africa.

Fal says this is driven by the growing middle class and the consumer boom as the demand-driven Africa grows.

The network invests in education, financial inclusion, consumer internet and mobile, as well as government transparency.

Fal thinks Africa still lags in creating a culture of entrepreneurship and, in many countries, it is not seen as a viable career option. He says government red tape can also stunt entrepreneurial growth.

“People from all over the world make their fortunes in Silicon Valley, whereas in South Africa, for instance, it’s hard for a foreigner to get a work permit.”


1 Africa’s total entrepreneurship activities are high, but denote necessity as opposed to opportunity-driven, high-growth entrepreneurship.

Malik Fal, Managing director of Omidyar Network

2 We are aspiration within reach; Apple is aspiration beyond reach. If I was in Silicon Valley, having achieved what I’ve achieved, I’d be hanging with Barack Obama!

Alpesh Patel, Founder of Mi-Fone

3 Banks are there to make easy money, so don’t expect them to fund early stage


Hitesh Mehta, Ecotourism expert

4 There are a lot of people who are comfortable doing what they are doing, but they have to ask themselves: Am I doing enough?

Manu Chandaria, Kenyan entrepreneur

5 Questions of minority, women and diversity become an issue when entrepreneurs only fund people who look like them.

Alpesh Patel, Founder of Mi-Fone

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