As Botswana aims to diversify its economy to reduce a dependence on diamonds, a growing number of local businesspeople are blazing a trail for others, but a lack of financial know-how could trip them up, caution global entrepreneurship experts.
Pinkie Setlalekgosi is a mother and grandmother as well as an employer of 168 people. She is one of Botswana’s top female entrepreneurs, seen as a trailblazer for other women trying to make it in male-dominated industries across the country. The co-founder and Director of Sprint Couriers, one of the country’s leading courier companies, knows what it takes to be an entrepreneur.
“There are no short cuts to success, you have to work hard to realize your dream,” she said in a recent interview. Together with her partner, Michelle Gabriel, she started the company about 10 years ago in a coffee shop. For almost a year, they didn’t draw salaries and almost threw in the towel, but their perseverance has paid off. Sprint Couriers now operates in Zimbabwe, Zambia and South Africa as well as in Botswana.
There are many entrepreneurs like Setlalekgosi in Botswana – a country with the second highest score in the world for Total Entrepreneurial Activity (TEA) – measured by the Global Entrepreneurship Monitor (GEM) as the percentage of adults who have started a business in the past three months. Botswana scored 35%, not far behind the top scorer Senegal at 39%. The average for the sample, which included 60 countries, was 21%.
Entrepreneurship is actively encouraged in Botswana, a country wanting to diversify its economy and reduce a dependency on diamonds. For 2016, the International Monetary Fund (IMF) estimated a 3.7% increase in growth for Botswana, significantly higher than neighbouring countries Zimbabwe and South Africa.
Numerous government initiatives and programmes exist that are aimed at job creation and promoting entrepreneurship. With a high unemployment rate sitting at around 19%, there is growing awareness of the benefits of entrepreneurship, which include income generation, economic stimulation and opportunities for collaboration.
But, according to the GEM study, while Botswana has a highly entrepreneurial population and many positive supporting framework conditions, not all of the businesses created manage to survive to maturity. In addition, the data clearly shows that entrepreneurial businesses in Botswana are less likely to be innovative than businesses operating in more advanced economies. The net result of this is that they are neither generating enough jobs nor creating new markets and products that will benefit the country.
Nearly half or more of entrepreneurs in Botswana operate wholesale or retail businesses whereas in more developed economies entrepreneurs are drawn more to opportunities in information and communications, financial, professional, health, education and other services industries.
According to Mike Herrington, Executive Director of GEM, more specialist support needs to be directed at entrepreneurs in less developed economies to help right these imbalances. He cites making it easier for new businesses to register and operate by reducing the amount of regulations and ensuring that people have better training – particularly around financial skills – as key.
Targeted financial training has definitely played a key role in the success of local entrepreneur Tony Mautsu. At the age of 23, Mautsu founded Social Light, a media management company that specialises in social media marketing, working across platforms like Facebook, LinkedIn, Youtube and Twitter. Trained as an accountant, he might have thought he was leaving the world of numbers behind him when he started a media business, but he says financial skills are vital to any entrepreneur who wants to make it in the tough world of business. It is a view also held by Sprint Courier’s Setlalekgosi. “Business is easy,” she says. “It’s how you manage it that matters. Financial management is important.”
“Hiring the right accounting staff is an essential ingredient for any successful business,” says Mark Farrar, Chief Executive of the Association for Accounting Technicians (AAT) – a UK-based professional body for accounting technicians that offers qualifications in accounting and finance. “But it is also essential that the entrepreneur themselves have a good grasp of the numbers so that they can spot the red flags before they become a major threat to the business.”
Farrar says that many people think an accountancy or business degree is the only way to develop finance skills. “However shorter, more targeted training options are available,” he says. “AAT offers shorter, practical qualifications like the AAT Accounting Qualification. No prior experience or qualifications are needed and students are taught financial skills that they can use straight away in the workplace.”
“It takes a lot of courage to venture into business,” says Mautsu, who started out running his business from a mobile phone. Now a well-known name in Botswana’s social media circles, Mautsu sees a bright future for himself and other entrepreneurs. “Entrepreneurship is very important to our country. A lot of people are now waking up to the harsh reality of unemployment after graduation and are starting businesses,” says Mautsu. According to GEM, 60% of people in Botswana have indicated that they want to start a business in the next three years. They are also rated highly when it comes to not fearing failure – with the country featuring amongst the most confident entrepreneurs of all the nations surveyed for the report. The Botswana government is also credited as being one of the countries in Africa with the least bureaucracy and red tape, meaning that entrepreneurs have less of an uphill battle when establishing businesses and getting companies off the ground.
“I believe that we are yet to see a lot of global leaders rise from Botswana,” says Mautsu. “In my opinion, Botswana is positioned geographically and otherwise as the future place to do great business. Botswana, just like anywhere in the world, is not without its challenges but entrepreneurs here are learning and making great strides within our borders as well as outside of it.”