2015 Entrepreneurship in SACU Region

The Promised Land

With only 5.5% of the continent’s population, slightly more than 60 million inhabitants, the Southern African Customs Union (SACU) is not short on potential. Entrepreneurs from SACU accounted for 199 submissions in the premier edition of BMCE Bank of Africa’s African Entrepreneurship Award (AEA), nearly 7% of total applications. You can probably imagine that in this region – including Botswana, South Africa, Lesotho, Swaziland and Namibia – the land of Madiba (Nelson Mandela) is the zone’s most prolific with 46% of completed business proposals.

The fact that South Africa’s entrepreneurialism topped the list of African countries and even the BRICs (Brazil, Russia, India, China) in potential for success reinforces their dominance in SACU. This, according to the recently published Global Entrepreneurship Index 2016, further elevates South Africa and all of SACU as they produce great entrepreneurs.

Namibia, for its part, thanks to preferential access to multiple markets and economic zones, political stability, and government policies that encourage free enterprise, is close behind South Africa with 43% of submitted business proposals in SACU. According to Doing Business 2016, the cost of business creation in Namibia is advantageous. It is estimated at 11.1% of income per capita compared to 53.4% for the whole Sub-Saharan Africa.


Distribution of projects submitted by country of location (SACU)

SACU Regional 1

Opportunities and Aging in SACU

Entrepreneurs in SACU confidently invest in their home contexts. Only 14% of AEA bidders hold a different nationality or live in a different country in which they plan to invest. By comparison, this ratio rises to 28% in ECOWAS. In other words, aspiring entrepreneurs in SACU venture little beyond their borders and believe in their domestic markets.

Concerning the period of their lives when they decide to take the step of entrepreneurship, applicants in SACU have an average age of 29. With unemployment at nearly 18% and over 60% of the population living below the poverty line, young people in Swaziland perceive entrepreneurship as a solution. In stark contrast, having attained further education and professional experience, especially abroad, South Africans try the entrepreneurial adventure at 34 years old.



A Region for Women

In the 2015 AEA premier edition, 27% of entrepreneurs in the region were women. On this indicator, Anglophone Africa did slightly better than Francophone Africa. The accelerated “urban migration” in South Africa and Namibia, the 2 countries where the majority of women candidates came from (Johannesburg, Cape Town, Pretoria, Windhoek), partly explains this trend.

Technology and Environment-The Winning Activities

Finally, and from a sectoral perspective, the relatively more mature economies of leading SACU countries result in stronger interest in tertiary activities. In order of importance these are technology and communication – related especially to education and health activities –environment & energy, and services.

South Africa exemplifies this strength in technology, developing within a few years, a whole range of business incubators (i.e. The Innovation Hub, Maxum, Springlab, Sarebi…) and networks of entrepreneurs (i.e. Silicon Cape Initiative) contributing to the creation of technology start-ups.

 

 

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Average age of bidders in corporate projects by nationality

 

 


It is not surprising that the first edition of the AEA selected two winning South African projects. The first Vula Mobile is an application created by ophthalmologist William Mapham. It enables health workers who work in low-income communities to provide quality eye care and referrals through their mobile smart phones. The second Johann Kok’s SeeBox, is a video game designed to introduce children to the concepts of electronics and artificial intelligence from an early age.


Distribution of projects submitted by industry (SACU)
SACU Regional 2

 

Conclusion

With two South African winners and three finalists, the Southern African Customs Union (SACU) region shows that it has a strong entrepreneurial climate and is often at the leading edge of innovation in Africa.


 

Follow the African Entrepreneurship Award in 2016 to see what this region has to offer this year as well as other fascinating entrepreneurship projects from around the continent and the diaspora.