The new year began with the news that the Government of Eswatini has declared 2020 the year of the SME. The good news could not have come at a better time for the Eswatini Accelerator Lab which has established an Entrepreneurship Policy Lab (EPL) to tackle the issue of youth unemployment as a frontier challenge constraining development.
The EPL brings together actors within the entrepreneurship eco-system - entrepreneurs, policymakers, financiers, service-providers and development partners - to co-design and prototype interventions that would promote the establishment and scaling up of successful Micro, Small and Medium Enterprises (MSMEs).
A series of workshops will be hosted by the Accelerator Lab as part of the Entrepreneurship Policy Lab. The workshops’ themes are drawn from the Eswatini SME Roadmap and the SME Policy and include (i) addressing policy and regulatory barriers; (ii) improving access to finance; (iii) improving business development services; and (iv) unearthing and scaling up ‘below-the-radar solutions.
The Acc Lab team has engaged potential partners to solicit input into the design of the EPL, thereby bringing forth innovative approaches and new and unexpected insights about the really pressing issues and potential solutions.
The Acc Lab team has made a deliberate and conscious effort to continually ensure space remains for the uncommon actors to input into the workshops’ design. In this regard, the Lab convened a workshop for Youth Entrepreneurs from four rural communities under the Siphocosini Inkhundla (a local Constituency in the Hhohho Region). This presented an opportunity to test the methods used by the Acc Lab team to tease out the issues and solutions pertinent to the entrepreneurship challenge in Eswatini.
The learnings and solutions discovered by the team were an eye-opener to the Acc Lab Team. For instance, youth in rural areas are very interested and already engaged in enterprise. In fact, several of them tend to have more than one business venture, with at least one being some type of agricultural venture.
Interestingly, startup capital is not perceived as the most significant constraint; most entrepreneurs were able to raise finance to establish their businesses from the 3 F’s (family, friends and fools). Access to working capital and investment capital to scale up their businesses are the challenges constraining business activity, largely arising due to limited capacity to operate their businesses in a manner that would allow them to access such resources.
For young people located in rural areas, access to information pertaining to their activities is a major challenge. Despite the plethora of instruments and funds available to support rural-based entrepreneurs, young people were found not to be aware of these. Consequently, they often miss-out on opportunities to access the much-needed support to operate their businesses successfully.
Several innovative solutions were suggested by the rural based entrepreneurs to overcome these barriers to entrepreneurship. For instance, information campaigns utilizing the school network were suggested as one way of overcoming the information challenge. The entrepreneurs also contributed to the conceptualization of a suitable instrument that would overcome their working-capital challenge. Elements of this instrument include training and capacity building in terms of business-management and personal finance skills. Entrepreneurs also suggested that instead of funders providing Finance by giving them money, they could make direct payments to suppliers and service providers for the business needs.
The Lab further engaged with the University of Eswatini (UNESWA) to explore possible research partnership and tap into the already existing innovative activities being undertaken by the University. Examples of such innovative activities include an incubation facility established by the Faculty of Consumer Science in partnership with Chakaza (a new company by UNESWA) whose aim is to improve employment creation and entrepreneurship through assisting entrepreneurs with business skills and business development services. Part of this includes assisting the youth with the development of business proposals; an Entrepreneurship and Business Development Center (EBDC) established by the Faculty of Commerce and; an innovation lab established by the Faculty of Science in partnership with the Royal Science and Technology Park.
UNESWA has great plans for promoting the culture of innovation in Eswatini, with a focus on skills development for the youth –, to place them at an equal competing level with their international counterparts- and not just those studying at the institution.
The UNDP Accelerator Lab, and UNESWA are currently exploring developing a prototype for testing a method to reduce costs while improving access to education and skills. The protype will be centered around skills development for the youth with a focus on reducing costs and improving accessibility to building the right skills for the market.
We are learning as we go that entrepreneurship development in Eswatini, as a frontier challenge needs improved collaboration and coordination between different stakeholders operating in this space. This frontier challenge also needs more engagement with uncommon actors such as rural folk as these tend to be left out of discussions that affect them, and the result has been that the many programs that have been developed to address the challenges experienced by rural entrepreneurs have not even had sufficient reach to them. For instance, when asked about the local funding mechanisms (such as the Youth enterprise Fund) that were widely advertised across social media and local print media, only 2 out of 20 participants knew about these calls. And more recently, the Minister of Commerce, Industry and Trade, Mr. Manqoba Khumalo, in one of his statements mentioned that only 10 – 15% of the 140 million emalangeni of the Small Scale Enterprise Loan Guarantee Scheme (SSELGS) had been accessed by local SMEs, possibly signaling that local SMEs cannot reach this facility (http://new.observer.org.sz/details.php?id=10789).