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Top economists urge African States to support enterprises

CARTOON
By | Mar 26th 2011 | 2 min read

By Jackson Okoth

Leading economists, entrepreneurs and academicians have called on African governments to improve business environment to accelerate the continent’s economic growth through enterprises.

Speaking at this week’s Economic and Cultural Transformation Conference organised by Acton Institute and Strathmore University, the business and academic luminaries decried punitive tax administration systems and institutionalised corruption as key barriers to entrepreneurship.

Robert Vivian, a professor of Finance and Insurance at the School of Economics and Business Sciences, University of the Witwatersrand, said Africa has one of the highest rate of unemployment necessitating the development of entrepreneurship to reverse the trend.

Wealth monopoly

"Corruption in Africa has made sure that wealth is monopolised by a certain stratum of the society. The only way to break the shackles of poverty and ascend to the level of clique is through entrepreneurship," said Vivian. He said existing political structures are there to maintain status quo of poverty and inequality; and thus inefficient for rapid economic growth.

David Sperling, a professor at Strathmore University, said budding small and medium enterprises in Kenya are the major employers as opposed to the formal sector.

Recent statistics indicate the only two million Kenyans are employed in the formal sector as opposed to close to eight million in the informal sector. Eva Muraya, the chief executive of Colour Creations, noted that a myriad of complex impediments to entrepreneurship in Africa are rooted in corruption. Vivian called on African governments to pass strong property rights legislations to boost confidence in entrepreneurs that their intellectual rights are protected and their businesses will not be nationalised at the whim of narrow political agendas.

Other challenges cited as prohibitive of free enterprise include protracted business registration processes, high cost of production, high lending rates and lack of sustainable funding for science and technology research.

Kishore Jayabalan, director Acton Institute and a former international economist for the Bureau of Labour Statistics in Washington,. said there was need for the Government to prop up successful entrepreneurs as role models in order kick start a cultural change in attitude towards entrepreneurship.

"Kenya is on the verge of having a glut of graduates; it is critical to show them there is an opportunity for prosperity in entrepreneurship," said Mr Jayabalan.

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When Njonjo almost resigned over coffee smugglers
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