Ugochukwu: Support for SMEs Will Catalyse Africa’s Economic Recovery

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The Chief Executive Officer of the Tony Elumelu Foundation, Ifeyinwa Ugochukwu, in this virtual interactive session with journalists spoke about the Foundation’s entrepreneurship programme, its contribution to Africa’s economic recovery that had been battered by the COVID-19. Obinna Chima brings the excerpts:

Can you tell us more about the Tony Elumelu Foundation (TEF) entrepreneurship programme and the decision to open the 2021 application on January 1?

As you all know, the TEF was founded in 2010 and in 2015, our founder, Mr. Tony Elumelu launched a $100 million commitment to identify, train, mentor and fund 10,000 African entrepreneurs across all 54 African countries over 10 years. So, 2021 marks the seventh edition of the TEF entrepreneurship programme. Till date, we have trained, mentored and funded just over 9,000 African entrepreneurs. We are also excited to say that PwC in conjunction with our Foundation has just completed an impact assessment report which would be released in the first quarter of 2021, to mark our 10-year anniversary. So, there is a lot happening in the Foundation.

Shortly after our 2020 application closed, the lockdown happened across Africa and indeed, the entire world due to the COVID-19 pandemic. We knew that we could not continue with the programme at that time because most people were under strict lockdown and there were no movements in their country. Most of our entrepreneurs often times needed to go to schools, business centres or offices to have access to the internet to take the programme. So, we decided to postpone the programme to 2021. Now, we all know that Africa didn’t bear the brunt of the health impact of the COVID-19 pandemic. But for the economic impact, some people have said that Africa is the epicenter of the economic impact of the COVID-19 pandemic and the SMEs, which are the heartbeat and lifeblood of economies in Africa, is on the frontline. Most SMEs do not have the shock absorber that the bigger organisations have.

And that is why it has never been more urgent than now, to deepen and expand the work that the TEF does in empowering African entrepreneurs. That is why for us, opening the application portal on January 1, 2021, marked a new beginning. It marked a renaissance and the beginning of recovery; and the beginning of Africa really taking its place in the global stage as a strong, thriving economy led by SMEs who are the largest generators of jobs in the continent. So, we are pleased to say that as we had announced last year, that those who applied in 2020, we would still be selecting 1,000 entrepreneurs who would be funded. Now, for the 2021 applicants, the world understands that Africa is critical to the world’s economic recovery from the pandemic. And that is why we have partnered with the European Union to fund and train an additional 2,400 women on the TEF entrepreneurship programme for 2021.

This is in addition to many other partnerships that we have been running through the years with the likes of the United Nations Development Programme as well as the ICRC. For us, we have put up a call to action for all development organisations, for African government and foreign governments that, now is the time to scale and expand the work that we have been doing in empowering African entrepreneurs with capacity building and the much-needed seed capital funding. We do not want to lose the gains that we have made over the last 10 years whereby we have put entrepreneurship on the global agenda. Most governments know that it the SMEs that would create the jobs needed to catalyse growth across the continent and now is the time to ensure that SMEs that have been hit-hard by the pandemic get the required support.

Many sectors are barely able to keep their head above water – tourism, restaurants, and so many others. So, now is the time to teach our entrepreneurs the importance of resilience and the importance of ensuring that regardless of the challenges, you look within your communities, you look within your environment, identify the problems that need to be solved and create businesses to solve those problems. So, for the 2021 application, we are doing it a little different from what we did in the past. Previously, when you apply to the TEF, ones you apply you put in your business plan within the application and those selected would be trained and funded. But this year, just as we did last year, we want to train a lot more than we would fund. Primarily, that is because the feedback we have gotten from our entrepreneurs is that training has been critical to the success of their businesses.

And whilst we continue to build on our commitment to train 10,000 over 10 years, by partnering with global organisations to scale those numbers, we want to ensure that many more entrepreneurs are able to have the opportunity to get the training and capacity building that they need to prepare to be successful business owners and job creators. So, when you apply for the TEF entrepreneurship programme, you will be segmented into different training segments. So, you either gets segmented into beginners, intermediate or advanced. Now, based on which segment you belong to, you will receive training with people at same stage of business as you. After the training and mentoring, you will then be expected to develop your business plan.

Armed with this, we would select the top performers to go through a pitching competition that would be run Africa-wide. And it only after the pitching competition that we would then, with a panel of judges validated by our partners such as Deloitte, PwC, select those who would be funded for the year 2020 and 2021. So, it is an exciting year because we would be training many more entrepreneurs than we usually do, which is critical at this time when entrepreneurs need every help they can get to ensure that they navigate the new normal and that they come out of this period stronger and better able to face the challenges and thrive in their various sectors. We also know that it is important to continue to scale access to capital for all entrepreneurs, particularly for women entrepreneurs. Everyone know that if you empower a woman, you empower a nation. Women have been particularly hard-hit with the pandemic and its economic impact. That is why we have decided in conjunction with our partners, the European Union, to zero in on women and provide the much-needed support and access to capital to help women-owned businesses across Africa to surmount the challenges currently being faced and to ensure that we have a stronger and better ecosystem that creates opportunities for growth for women-owned businesses.

When will the selection start and end?
So, with the new system that we run, the selection is automatic. So, we have an automated application system where the entrepreneur that logs on to tefconnect.com would take a series of questions and based on their answers, they are scored by the system and immediately segmented into either beginners, intermediate or advanced. And immediately they click on their questions and submit their answers, they would get an e-mail letting them know which segment they belong to. So, if you don’t get an e-mail telling you that you are a beginner, an intermediate or advanced, it means that you are not ready to take on the training with the TEF entrepreneurship programme. We would like to call this segment of people the preparatory stage. That means you need to go back and do some more work to prepare to be an entrepreneur.

This segment of people, we are not going to leave them empty handed because we have a 12-week online training toolkit, which is available free of charge on tefconnect and of course they are welcomed to apply again in the coming years. So selection for the training is automatic and you get your e-mail as soon as you finish applying. Now, once you get the e-mail, you start the training. When you are done with your training and mentoring, it is the top performing entrepreneurs who would then be selected to go through the pitching competition. The pitching competition is where the finalists and those who would receive the $5,000 seed capital funding would then be selected.

You talked about 1,000 entrepreneurs to be picked from the 2020 applications, so how many more are we looking at for 2021 and can the 2020 applicants reapply this year?

In answering your second question, I will say it is not to the advantage of the 2020 applicants to apply again because by the way our system is set up, it rejects duplicate. So, if you apply in 2021 when you have already applied in 2020, it will simply be a duplicate and the system will throw out both applications because they are seen as duplicate. So, if you applied in 2020, the best thing is to leave it at that because we will be reviewing the 2020 applications. So, all 2020 applicants would have received e-mails letting them know the segment of training they belong to and they would soon be informed when that training would start. So, you have already been accepted for training and there is no need going to apply again. However, if you didn’t get an email letting you know that you belong to a segment of training, which means you didn’t make it through, so you are free to apply again in 2021. For the first part of the question, yes, we would be selecting 1,000 entrepreneurs from the 2020 applications and for 2021, we would be selecting a minimum of 2,400 entrepreneurs. It would likely be more than that. So, in total for 2020 and 2021, we would be selecting and funding more than 3,000 entrepreneurs.

I would like to know if all the training categories would be given same platform to pitch their business ideas and what time of the year would the pitch likely take place. Secondly, considering the impact of the pandemic, what can all actors in Africa’s development space do differently to ensure positive impact on the road to recovery?
In terms of the training categories, the reason why we segmented the training is that we realised that a one-size-fits-all training is not the most efficient because people are at different stages of their business and have different business competence. So, we took that into consideration. That is to make sure that people at more advanced stage of their business are getting the information and training that they need to take their businesses to the next level, whilst for people who are beginners, they are being taught the fundamentals and what they need to grow their businesses. So, what we have now done is that the pitching competition is a level playing field in the sense that no matter whether you are just starting, you are intermediary or advanced, a business is a business and a business opportunity is a business opportunity.

So, for pitching competition, it is a level playing field across all 54 African countries and this will take place towards the end of the second quarter of this year, when the training, the mentoring and business plan have been completed. For the second part of the question, the economic impact of the COVID-19 is quite a lot on Africa because we are heavily dependent on our SMEs, they make up 80 to 90 per cent of entrepreneurs and businesses in Africa. What we are doing at the Foundation is that we are putting together the largest COVID-19 economic response plan because we know that the world needs SMEs right now and one area development organisations, stakeholders and government can really bridge that gap is in access to capital. That is what is needed now because the impact of the virus has really taken a toll on liquidity.

So, we are calling on countries, development organisations, to really begin to put funding and capital in the hands of African entrepreneurs. When we are on the table discussing, we always tell our partners that we need to trust the African entrepreneurs; we need to move away from entrepreneurship programmes and interventions that are so focused on training and capacity building and do not put capital on the hands of entrepreneurs. They are the people to create jobs, they are the ones on the frontline, they are the ones catalysing economic activities and so now more than ever, we need to put money in their hands because that is what would stimulate economies in the continent and create the much needed growth so that Africa can climb out of the current recession given the impact of the virus.

How many entries did you receive for 2020?
We received well over 230,000 applications for the 2020 TEF entrepreneurship programme.

The TEF has made some progress in the inclusion of female entrepreneurs as shown by the increasing number of female participation since the launch of the programme, but what are the challenges in achieving a more gender equal representation?
When we first started the programme in 2015, we had just about 26 per cent female participation. For us, that was not acceptable especially when you note that the Foundation is made up of 80 to 90 per cent female and we must ensure that the female participation in the TEF entrepreneurship programme is very high. Our target is 50 per cent. I am happy to say that last year, we reached 41 per cent. So, 41 per cent of the applicants for 2020 were female, but we were targeting 50 per cent and more. Definitely, our target is to catalyse growth of female-owned business and that is something that is very dear to our heart and I think that is demonstrated in our partnership with the European Union because women in Africa face challenges women in other parts of the world don’t face.

In Africa we have customs and cultural traditions that bar women from owning property; that bar women from expressing themselves through entrepreneurship. But, on the other hand, we have statistics that show that women make up 90 per cent of the workforce, but they earn sometimes as little as 60 per cent of the income and own less than 10 per cent of the property. So, we want to change this; we want to bridge the finance gap for women in Africa. Women in Africa have a 70 per cent less chance of accessing capital than their male counterparts and these are the challenges we are working to bridge in conjunction with our global partners and I think that we are well on our way to doing that.