Nigerians and other African nationals, who participated in the 2015 Tony Elumelu Entrepreneurship Programme, have criticised their exclusion from low-interest loans provided by the government.
In a survey conducted by the Tony Elumelu Foundation across 53 African countries, participants blamed the system for giving preference to civil servants, military officers and politicians over business owners, which required funding to survive.
In the survey entitled, ‘Unleashing Africa’s entrepreneurs: Improving the enabling environment for start-ups’, 74.6 per cent of African entrepreneurs said that lack of collateral made it difficult for them to obtain business capital.
The survey result showed that 65 per cent of the African entrepreneurs recognised the importance of government incentives such as tax holidays, subsidised land and low interest loans to start-ups
Moreover, 69 per cent of the entrepreneurs stated that the initial funding for their businesses was from personal savings, while 35.5 per cent received funding from friends and family.
The report stated, “Only a small percentage (3.43 per cent) have benefitted from commercial bank loans. For many of those without personal savings or family/friends (26.5 per cent), they still remain without access to capital.
“Obtaining financial capital was ranked as the biggest challenge to starting up/running a business for African entrepreneurs with a score of 13. Entrepreneurs also bemoaned the high cost of core inputs that made production difficult and poor infrastructure that increased operating costs and put downward pressure on profits.”
To facilitate easy movement of manufactured goods and raw materials, the entrepreneurs advised the government to provide infrastructure such as good road networks, regular electricity supply, and improved port facilities.
Moreover, the report stressed that stringent regulations from the federal, state and local governments were hampering new business outfits’ growth.
According to the entrepreneurs, laws and regulations such as licensing and registration of business name, workers’ compensation, unemployment compensation, health and safety regulation, and land use regulations are ambiguous and pose an obstacle to the growth of small businesses.