8 Challenges Faced by Entrepreneurs in Africa Today

If you work with entrepreneurs in Africa as we do, you will find it easy to agree with the findings of the Global Entrepreneurship Monitor‘s findings that Africa has a stronger entrepreneurial spirit than the rest of the world. This is evidenced by the rapid growth of new businesses in the region. Global Entrepreneurship Monitor (GEM) data shows that sub-Saharan Africa has the most people engaged in TEA, with Zambia and Nigeria at the top of the world rankings in 2020.Entrepreneurs in Africa

Let’s consider some of the key challenges for early and growth stage businesses for entrepreneurs in Africa.

1. Entrepreneurial Drive and Determination

Doing business in Africa is not for the faint hearted. There are significant challenges to overcome. The good news is that entrepreneurs are made of strong stuff and will see every challnge as an opportunity to create a competitive advantage.

2. Next you’ll need is capital to get your business off the ground.

Most African start-ups face difficulties in raising start-up capital, perhaps the most obvious of all problems. In order to expand their businesses, entrepreneurs and small business owners face numerous obstacles, including the inability to evaluate financial proposals, a lack of financial knowledge, and a lack of easy access to venture capital.

3. Business – Energy and Communication Infrastructure

Even though Africa’s funding challenges are being alleviated, there is still a huge infrastructure gap to be filled. In order for a business to succeed, the government must provide basic necessities such as good roads, an efficient transportation system, high-speed internet, and reliable electricity. South Africa is great example here, where the crippling Load Shedding policy has harmed the South African economy to the tune of R360 billion and R450 billion, according to Statistics South Africa. The pie chart below indicates the size of losses experienced by businesses in South Africa as a result of load shedding.

Entrepreneurs in Africa

4. The Competition

Competition is a major problem for start-ups, especially in industries where there is already a dominant brand or a number of dominant brands. The general rule is that customers prefer to do business with companies that already have a good reputation and are well-known in their particular industry. In spite of the fact that this can be a major roadblock, it’s not insurmountable. Start-ups must make certain that their business ideas are distinctive, imaginative, and consistent within their industry.

5. Government Policies, Economic and Business Friendly Environment

Everything rises and falls with leadership, as it does in most areas of life. Depending on the sector, there are a number of government policies and regulations that make starting a business a challenge. A business-friendly environment can be created only when political leaders and policymakers constantly review their business policies across all sectors.

6. Intra-African Trade for Entrepreneurs in Africa

Intra-African Trade (also known as cross-border trade) is often difficult, slow, expensive, and inefficient. In part, this is due to local laws and regulations governing cross-border payments and domestic banking systems in various African countries. In general, business transactions are slowed down because of the continent’s lack of a regulatory framework that is universally accepted.

7.We Need More Woman Entrepreneurs in Africa

Female employees make up just 27% of the workforce, according to the results of a recent survey. Only 15% of the total number of female founders were previously disadvantaged. On the plus side, the percentage of previously underrepresented male founders surpassed 50%, at 42 percent. It’s clear that having more women on company boards has a financial benefit.” Entrepreneurs in south AfricaCompanies with diverse boards outperform those without any women on them, according to research from around the world. They can expect higher returns and better financial performance overall.

8. Access to Education and Skills

There is a severe lack of qualified candidates in South Africa’s labour market because of a lack of experience, a lack of necessary hard skills, and applicants’ unrealistic expectations of pay.

64 percent of entrepreneurs lack commercialization expertise and 55 percent believe that South Africa lacks serial entrepreneurs, according to the ecosystem stakeholders who participated in the survey.

The data shows that large companies (54 percent), medium-sized businesses (39 percent), small businesses (23 percent) and micro-enterprises (25 percent) all have a shortage of employees.

Sub-Saharan Africa has the highest percentage of private businesses reporting revenue losses due to a lack of skilled workers.

Fortunately, governments and transnational payment organisations are gradually creating standardised data formats to facilitate seamless transactions.

Start-ups and entrepreneurs in Africa face no difficulties that can not be overcome. There is no doubt that the African economy needs to be developed, and we all have a role to play.

Share Post


Recent Post

Get Your Free

Matthew Musgrove

Matthew Musgrove

Matthew is an entrepreneur and business Advisor with a passion for change management and social empowerment. With a background in business accounting and advisory, as well clinical research project management, he strives to find strategic and sustainable solutions to business problems.



Mark Van Hoff comes from background of technical & production planning, budgeting & scheduling of major live events. As the first production co-ordinator at M-NET for Outside Broadcasts, Mark has managed major local and international productions including Miss South Africa, Miss World, multiple music events and major sports events, including the PnP Cycling Tour.​Mark co-founded Van-Man Productions in 1994, Page to Picture in 2000 and Move Media Networks in 2007. All three companies have achieved domestic success and have been well-regarded in the South African production industry.



Oluwaseun Adewuyi who is the Group Chief Finance Officer (CFO) at Caban, is a Certified Chartered Accountant, with Fellowship status at both the ACCA as well as the Institute of Public Finance and Accountancy, a UK Based industry body with a specific focus on the management of charities, not-for-profit organisations and NGOs.. Oluwaseun comes with strong business acumen and 20+ years of progressive experience in finance and operations management within well-reputed and high growth organisations Including Next Plc and Royal Mail. He has been heavily involved in impact investment across Sub-Saharan Africa and has been instrumental in the creation of a series of community schools in West Africa. Throughout his career, he oversaw a broad range of operations, including Business Strategy and Business Reorganisation, summarising the organisation’s financial status, and coordinating the preparation of tactical plans, financial forecasts, and budgets. Adept at developing and implementing effective internal control framework to maintain sound financial accountability.

tim scholtz


Tim Scholtz, who's is the Chief Operating Officer (COO) at Caban Investments, is experienced in implementing corporate governance guidelines, formulating risk management structures, process and cost optimization. Tim has a strong corporate background, having worked as COO at the South African Tourism board, was COO at the Nelson Mandela foundation and as a internal audit manager at Arthur Anderson earlier in his career.

Ben Botes


Ben Botes is Entrepreneur, VC, co-Founder, Author and Academic with a strong social conscience. Ben Involved with early stage and growth firms for the past 20 years and has been Co-founder of 9 separate businesses across Africa. Ben has directly and indirectly been involved in impact investment and the support of charities and non profits for the last 30 years. Ben is a regular speaker at the African Investment Conference in London and has been featured in Wall Street for Europe, The Guardian Small Business, BBC, the Mail and Guardian in the UK and BizCommunity, Channel 3 TV, Investors Weekly, The Cape Times, Radio 702 with John Robbie and Good Hope FM in South Africa

Dave Romero


Dave Romero is a venture capitalist and entrepreneur with a passion for making an impact. A qualified Professional Accountant, Dave has been a director in multiple financial institutions and was once the youngest Chairman on the JSE, in addition to being listed as one of Business Times’ Top 100 companies and the 40th fastest-growing company in South Africa. Dave is a core founder of the Caban Group, which aims to provide a comprehensive service offering to small businesses in return for equity. With a passion for nurturing entrepreneurs, Dave can often be found outside of the boardroom – offering advice, creating innovative funding solutions and building communities through sustainable practices.



Dr Ruben Richards is a truly inspirational South African leader. Through his peace-building seminars for criminal gangs, Dr Ruben has facilitated the longest ceasefire in the history of gang warfare on the Cape Flats. In addition to being Chairman & Founder of the non-profit Ruben Richards Foundation, Dr Ruben is an ordained cleric, company director, non-executive Chairman of Visual International Limited and was once the Deputy Director-General of the now-disbanded Scorpions.