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The jarring truth about going into business in Kenya

Gear box workers at work at the Avon Centre main Workshop in Industrial area, Nairobi on  April 22, 2021. [Samson Wire. Standard].

Entrepreneurship is one of the hottest topics in public discourses and in academia.

It probably espouses our dream of becoming rich and affluent.  

Last week, I argued persuasively that the golden route to entrepreneurship is to have top or “A” students become entrepreneurs.

But that has not been the reality; it’s the dropouts and the laggards as measured by our exams that are left to start and run enterprises.

Why then are we surprised by the high failure rate of start-ups in the country? 

The reality is that top students prefer secure jobs in firms that were started by someone else and nurtured into maturity to the point of being listed on the stock market. 

They also love jobs in the public sector (read national government, county governments and other State agencies).

Add the UN and other cross-border entities lie the East African Community or the African Union. 

Unlike these well-established firms or agencies, new enterprises, including small kiosks, have no structures, systems, networks or even established markets or brands.

This is why such start-ups need Harvard’s brains. We have our Harvards here in Kenya. 

The reality on the ground is that men and women pushed into entrepreneurship have no interest or the necessary acumen.

Many would love to be employed and the certainty that goes with it, from a regular salary to a pension.

Ever wondered why we leave for the Middle East, the US or the UK for jobs?  

Yet schools and even the government push the youth to entrepreneurship, with the latter offering them funds to start their own enterprises.

As one youngster asked, why should someone who has been employed for 40 years ask me to become an entrepreneur? 

The truth is that entrepreneurship despite our love of money is not popular. It’s too romanticised, and the truth about it is rarely told.

For every successful enterprise that we see, many more have failed but were never publicised. The men and women we push into entrepreneurship are alive to this truth. They are on the ground.  

The support reviled entrepreneurs like Steve Jobs and Mark Zuckerberg got is rarely publicised. Their success is portrayed as a one-man job.

They probably got some venture capital, advice from leading consultants, support from the government and goodwill from their communities as well as patents to protect their innovations. 

America and other nations are very proud of their firms and their “homes.” I could sense the pride of Mississippi in hosting the headquarters of Worldcom in Clinton when I arrived there in the summer of 2001.

Never mind it went bankrupt the following year in 2002.  

I have asked why our firms are not headquartered where they were founded. For example, why is Equity Bank not headquartered in Murang’a?

By the way, why do we extract entrepreneurs from the countryside to Nairobi? Is it that counties do not need them?  

The reality in Kenya is that entrepreneurs are looked down. Why then do we expect our youth to aspire to become entrepreneurs?

In fact, small-scale entrepreneurs such as boda boda riders are seen as a nuisance. 

How many motorbikes are rotting away in police stations because the owners can’t pay fines for petty traffic offences?

I am not supporting the breaking of the law, but where would all these young men and women be without the motorbikes?  

Hawkers are always on the run from kanjos (city council - now county - askaris).

Yet, we do not seem to accept the reality that our economy is not that formalised, with 80 per cent of jobs being in the informal sector.

This is despite our policies and even infrastructure being built on formality. Noted how we leave out overpasses in new roads?  How shall we cross the fenced-off  Nairobi expressway?

Why doesn’t it have enough underpasses? Why did the designers assume we all drive?

There are no spaces left for entrepreneurs to work from despite the popular term, jua kali. Not only are there no working spaces, but amenities like toilets are few. 

But in the West and even in the East, we find industrial parks that just need you to build your factory and start production.  Our communities never commend us when we start enterprises the same way they celebrate politicians and musicians. 

Oddly, many enterprises want to remain small despite their success. Their owners prefer to retain control over growth.

Remember, many of them were forced into entrepreneurship. I have written consistently about the “missing middle” in Africa - a phenomenon whereby developing economies consist of a large number of microenterprises (mostly informal) and some large firms but very few small and medium-sized enterprises (SMEs).

Our economies are like vases; growth also means getting into the radar of government agencies such as the Kenya Revenue Authority and other regulators.  

Finally, entrepreneurship is taken as part-time by the employed. How often do you hear “I am going to my jua kali.”  

You are not supposed to be in entrepreneurship full-time; it should be a hobby or fallback position that was reinforced by Covid-19. 

Let’s not forget another reality: we value control over growth. Many boards and CEOs are content with the status quo as long their perks and power are intact.

Growth is secondary. Who said public sector firms can’t be entrepreneurial?  

The truth is that we admire the money made by entrepreneurs but not the “dirty work” of setting up enterprises and the risks thereof.

Did Vision 2030, the Big Four agenda, devolution and Covid-19 change that? What about the Competency-Based Curriculum? We can only wait and hope. 

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