adminSEVERAL African countries have started embarking on economic empowerment reforms to address imbalances in the distribution of wealth.
In the Sadc region, South Africa’s economic empowerment is being guided by its Black Economic Empowerment Codes of Good Practice and of late the Broad-Based Black Economic Empowerment Codes of Good Practice while Zimbabwe’s is being implemented under the Indigenisation and Economic Empowerment Act.
While all the empowerment programmes are noble the missing link has been the absence of entrepreneurial infrastructure.
While the regulatory framework addresses some of the challenges faced by first generation entrepreneurs is giving money to youths who have never run a business before.
There is a clear need to set up incubation centres and entrepreneurship parks to support start ups and would be entrepreneurs.
It may seem wise to support closed and collapsed businesses but a closer look shows that it is better to support creation of new small and more competitive businesses which do not inherit inefficient cost structures.
Entrepreneurial infrastructure includes the facilities and services present within a given geographic area which encourage the birth of new ventures and the growth and development of small- and medium-sized enterprises.
The model of entrepreneurial infrastructure that they provide support to potential new business owners and owners of small growing businesses, and existing small- and medium-sized enterprises by way of assisting them with tasks, physical and monetary resources, information and knowledge.
Well funded and structures programmes which provides funding, markets, support network and business advisory service are part of a robust entrepreneurial infrastructure which Zimbabwe and Africa in general need to invest in.
The continent has numerous examples of once thriving enterprises which have suffered due to lack of expertise and managerial skills which could be sourced from a well developed entrepreneurial infrastructure.
Entrepreneurial infrastructure helps to develop strong tradition of self-reliance and entrepreneurship which is critical in starting up new ventures which create employment and deliver superior services and products.
In addition Zimbabwe in particular and Africa generally lack the spin-off culture whereby major firms often encourage their employees to quit their jobs to start their own businesses and will sometimes even provide them with financial backing.
The spin off culture normally leads to second wave of entrepreneurs once the pioneers had become successful.
This is a culture which is desperately needed in Zimbabwe in particular and Africa in general to ensure that the black empowerment programme does not just become sloganeering and election rhetoric but rather a sustainable policy which will systematically increase Africa’s middle class.
The presence of a much stronger entrepreneurial infrastructure will naturally make it easier to attract Foreign Direct Investment as many well equipped locals will be available to partner foreigners and achieve desired and regulated ownership thresholds.
In the physical realm, for example, it is hard to imagine life without roads, communications networks, airports, ports, sewer systems and electricity grids.
Since they are defined for their “public good” nature, government plays a central role in financing, if not operating, such infrastructural facilities.
It is taken for granted that the government must install these. It should not stop on these alone the presence of rule of law, respect of property rights come as part of the entrepreneurial infrastructure package.
Even though Economic Empowerment is a noble idea there is need to work on providing and establishing the network of support institutions, zones, centres and incubators, stimulates the establishment of institutional support to small entrepreneurship and their connecting in an integral network of support institutions for the purpose of entrepreneurship advancement.
These are the institutions which will make the economic empowerment programme a success and not mere rhetoric or slogans.
In today’s business internet connectivity and availability is a critical component of the entrepreneurial infrastructure.
However, Zimbabwe and Africa remain mostly with limited access to the internet for budding entrepreneurs and the costs are way too high.
The Internet represents perhaps the most significant infrastructure project of modern times. Its growth has been fuelled largely by competing cable and telecom providers seeking to demand for faster computational power and transmission speeds.
Disclaimer: At GMRI Capital, we pride ourselves on the quality and depth of our research and analysis. This means digging deeper than our competition for information and generating more useful reports.
This article is provided “as is” for informational purposes only, not intended for trading purposes or advice. Prior to execution of any security trade, you are advised to consult your authorised financial advisor to verify the accuracy of all information. Neither GMRI Capital nor any independent provider is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein.
Contact; Face book; http://www.facebook.com/GMRICAPITAL Twitter ; @capital_gmri
WhatsApp ; +263 778 409 875
Online Reporter