Say all the good things about BBI but young Kenyans feel left out
Courtesy Of Daily Nation
There is a glaring gap in all this purported support for young people in business.
IN SUMMARY
A lot of Kenyan entrepreneurs have millions on ‘paper’ but nothing in their bank accounts.
This country is full of horror stories of young entrepreneurs taking loans to deliver goods and services on time, only for clients to fail to pay, leaving them reeling in debt.
URBAN MYTH
One of my greatest life pleasures in the recent past has been to interact very closely with young entrepreneurs. Kenyans are generally a resilient folk, but young Kenyan entrepreneurs are paragons of irrepressible resilience. Some of them take the entrepreneurship journey out of passion to solve problems. Most, however, turn to entrepreneurship out of disappointment with the “Kenyan Dream”, which promises great opportunities after years of hard work in school, only to find that this was just another urban myth.
Not so long ago, I wrote a column on how difficult it is to run a small business in this country. I may have given an example of two young men I met during my career as a journalist, whose lives were literally torn apart after a certain government institution failed to pay what it owed their young company. What I probably did not say was that I was also writing from experience – second-hand experience – as I have watched somebody very close to me nearly shut down a business because clients failed to pay for services already offered.
JOB CREATION
I had the fortune of having a mild discussion on BBI with a group of brilliant young entrepreneurs who had mixed feelings about the recommendations contained in the report.
The BBI recommends that we ‘nurture and open opportunities for children and youth to show their initiative, innovation and entrepreneurship’. Some of the suggestions include a tax holiday of at least seven years for new and small businesses as a form of support to ‘youth entrepreneurship and job creation’.
The report has also suggested an indigenous ease of doing business index for small Kenyan businesses, as opposed to relying on foreign indexes that fail to take into account the Kenyan context. There is also a proposal to provide aspiring entrepreneurs with mentorship in business through a foundation that will be chaired by the president.
All these suggestions sound interesting, inspirational even, for young Kenyan entrepreneurs who literally pour their all into their small businesses. The tax holiday, especially, seems like a plausible idea for start-ups – or upstarts, as an old friend likes to tease – for a country in which Micro, Small and Medium Enterprises (MSMEs) are a key driver of the economy, contributing about 40 per cent of the GDP.
HORROR STORIES
Who knows, if implemented, this recommendation could increase the number of people employed by small businesses, because at the moment those numbers are pathetic; only 3 per cent of businesses employ more than 50 people, according to a recent study by the Aga Khan University, East Africa Institute. Most Kenyan businesses – 71 per cent – employ less than 10 people. I imagine that these recommendations, if implemented, would move the needle in as far as youth employment in this country is concerned.
However, there is a glaring gap in all this purported support for young people in business. My smart young friends, some of whom have been in entrepreneurship for more than a decade, tell me that one of the greatest challenges that small businesses in this country face – besides undercapitalisation – is the fact that people simply don’t pay them for services offered.
This country is full of horror stories of young entrepreneurs taking loans to deliver goods and services on time, only for clients to fail to pay, leaving them reeling in debt.
PAY DUES
A lot of Kenyan entrepreneurs have millions on ‘paper’ but nothing in their bank accounts. You would be amazed if they tallied for you how much is owed to them and what a massive boost it would be if only their stubborn clients paid them. But I don’t see this sentiment captured in the much-hyped BBI, neither do I see any effort to compel both private and public institutions to support young entrepreneurs by paying them their dues.
A tax holiday and a mentorship programme are great ideas in supporting young people in business, but we all know that businesses, small or big, just like governments, run on money. But unless young people get paid, and get paid well and on time, we will have done nothing to solve the unemployment problem in this country and BBI will just remain that; another 156-page PDF document.
Ms Chege is the director of the Innovation Centre at Aga Khan University Graduate School of Media and Communications; njokichegefeedback@gmail.com
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