False msafiri BUSINESS 118 O ne of the biggest mistakes we make is to believe that countries become rich because they have huge companies. When we look at countries like the USA, Japan, Germany or South Africa, we tend to think of giant corporations like Microsoft, Sony, Toyota, BMW, Anglo American and so on. In fact, a country’s wealth is in direct proportion to the number and value of its small businesses. The USA leads the world in terms of small business, followed by Japan and Europe – which is exactly what their respective GDPs reflect. Africa has the smallest number and value of small businesses and consequently is the world’s poorest region. Giant corporations may well employ thousands, even hundreds of thousands of people, but small business employs millions – and it is these millions that create the real wealth of nations. In Africa, there is one country that has an outstanding economic record. Home ownership is around 80%; the middle class forms about 78% of the population; education for both boys and girls is practically universal; IT penetration, including home- computer ownership, is over 50% and poverty is less than 3%. It has achieved all this in 30 years without owning any oil or other natural resources. In fact, more than half the country is desert. That country is Tunisia. I once asked the President, Zain El Abediene Ben Ali the secret of his country’s economic success. “ Small business!” he replied. “ I clear all obstacles from the path of small business.” Indeed Tunisia thrives on its hundreds of thousands of small businesses – many of which are no longer small. It has carved out an enviable niche for itself as a trading and manufacturing powerhouse on the Mediterranean coast. Alas, few other African countries ( or for that matter, the USA, Japan, China and India) show the same respect for their small businesses as Tunisia. There is a lot of lip service given to small business but, in reality, the small- scale entrepreneur is faced with almost insurmountable obstacles, including dense jungles of red- tape, harassment from council officials, unfair taxes, lack of amenities such as water and power supply and a generally hostile attitude to the small-scale entrepreneur. Fortunately, as governments begin to realize the value of small- scale enterprises, the environment for small businesses in Africa is beginning to change. Banks and other financial institutions in more progressive African countries are now more willing to lend to the ‘ little guys’. They are learning that the vast profits being made by Western banks come from the middle classes, the small enterprises, not the huge multinationals. Innovative financing and marketing approaches, such as the Danish inspired MyC4 concept, are encouraging ordinary workers to become investors in small businesses. THE FUTURE’S BRIGHT The time is also ripe for an explosion of African enterprise – the only sure route that will take the majority of its population out of poverty. Economic growth has been sustained at around 5% ( growth for 2007/ 8 is expected to be 6%); commodity and mineral prices are high and the new generation of educated young Africans is now in a position to be economically active. In addition, one must not underestimate the transformative power of IT technology. It has both shrunk the world and opened up vast avenues of communication. Ideas, knowledge and opinions are flowing in and out of the continent. Africans are connecting with the West and East, North and South and forging new business alliances. This is the ‘ can- do’ generation all over the world and Africans are increasingly becoming part of the trend. The world of business in Africa is beckoning as never before. Despite the difficulties, the opportunities have never been better for ambitious people to enter the world of business for the first time, or for those already engaged in it to expand. Remember, all the global household names today ( Sainsbury, Tesco, Coca Cola HOW TO BECOME AN ENTREPREN getting the right mental attitude Africa desperately needs new entrepreneurs if it is to make economic headway, says Anver Versi in the first of our two- part series on how to set up a small business PART ONE

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