More entrepreneurs in the African ecosystem?

for global supply chains to be disrupted and in turn for emerging markets, like Africa, to become vulnerable.

The automotive sector is a perfect example of this. Countries like South Africa have benefited from major foreign investment by the likes of Ford, VW and Toyota and many jobs have been created through this investment. However, the disruption to the global supply of semi-conductor microchips has stalled new production capabilities.

Africa is a net importer of many goods and does not have sufficient local manufacturing capacity or skills. What should be a growth industry, is suddenly hamstrung due to a global shortage and a dependency on international supply.

Unless the manufacturing capacity on the continent is bolstered through long-term investment, AfCFTA will struggle to create an enabling environment for entrepreneurs who will be at the tail-end of the value-chain.

Manufacturing requires long-term capital commitments and we as banks are working closely with export credit agencies to create opportunities for growth. Development Finance Institutes (DFIs) are investing in incubation to help develop entrepreneurs across multiple sectors – unfortunately, all of this takes time.

But … the opportunity is there

While there are very material challenges that the AfCFTA region faces in developing the entrepreneurship ecosystem, it is not all doom and gloom and we are excited about a number of growth sectors amongst our clients.

We are having a number of discussions with multinational technology businesses who want to develop a presence in Africa. US and European investors are excited by the scale of the African fintech story. Sizeable Venture Capital investments over the last 12 months are proof of this excitement.

On top of this, there are some very obvious success stories from the likes of the Chinese automakers who have come into Africa offering high-quality, lower-cost motor vehicle options and downstream opportunities for local businesses. Other success stories include agriculture, wine and the afore-mentioned berries exports. $450bn in increased economic activity represents a very real opportunity for entrepreneurs in Africa and if we can focus on creating an enabling environment for these entrepreneurs; jobs and economic prosperity will follow.

Export growth has been a longstanding pillar of Botswana’s national development plan, aimed at making the country more internationally competitive, boosting production, diversifying the export base and raising the country’s standard of living. Given the increased export opportunities created by the ACFTA it is expected that SMEs would remain central to the realization of this development goal and enhance Botswana’s resilience.

In view of the many challenges faced by SMEs key amongst them being access to finance, business management, access to market, technology adoption and product, Absa Bank Botswana introduced a Customer Value proposition that is aligned to the needs of the SMEs.

The Enterprise Supply chain Development (ESD) program streamlined some of the stringent financing requirements and has therefore enabled SMEs to execute on the provision of goods or services for the clients and positively impacted their growth. The Enterprise Supply chain Development (ESD) program seeks to give SMEs access to markets, finance and business support (capacity building).

Absa has committed itself to being the lead Pan-African banking group on the continent and we look forward to working with entrepreneurs who want their slice of nearly half a trillion dollars.