Drivers and Challenges of Entrepreneurship in Kenya

By Korir Isaac / Published May 17, 2022 | 11:51 am




KEY POINTS

Rich entrepreneurial culture in Kenya will create jobs, grow the economy and uplift the standards of living. The current depreciation in the Kenya Shilling, in the long-term, can be well addressed by entrepreneurs manufacturing more locally to reduce imports, exporting more to global markets, and thereby strengthening the Kenya Shilling.


Entrepreneurship

KEY TAKEAWAYS


Despite these challenges, the opportunities for entrepreneurial activities present an attractive prospect for economic diversity and growth. With the right governance, Kenya is poised to be Africa’s leading entrepreneurship hub.


Entrepreneurship is the capacity and willingness to develop, organize and manage a business venture along with any accompanying risks. Over the years, entrepreneurship, along with innovation, has carved its role in the economic and social development of society, transforming the lives of millions of people around the globe.

The stand-alone trait that makes an entrepreneur is the entrepreneurial spirit that inspires one from within to be the best one can be. It develops within an individual who demonstrates a true passion for building something great from nothing and the will to push themselves to the limits to achieve their goals.

An entrepreneur

  • is always passionate about what they do,
  • always welcomes improvement in every aspect of their lives,
  • optimistic about all possibilities, while taking challenges and obstacles as learning opportunities,
  • takes calculated risks, and above all,
  • executes their ideas. This combination of traits nurtures the entrepreneurial spirit within him that drives his ambitions.

Entrepreneurship in Kenya has evolved through the years driven by the political, social and economic changes that the country has undergone. In the past, entrepreneurship in Kenya lacked diversity, being reserved for family businesses, cultural lines, the older generation, and predominantly men.

However, over the years Kenya has transformed into a cosmopolitan economy that spurs innovation and partnerships along with diverse cultural differences and has seen youth and women step up.

Factors Encouraging Entrepreneurship in Kenya

The key factors that encourage entrepreneurial development in the country are:

  • Challenges such as unemployment and poverty

 The unemployment rate in Kenya as of 2021 increased to 6.6 percent according to the data published yearly by International Labour Organization. The maximum rate was 12.2 percent and the minimum was 4.7 percent. A large percentage of this comprised of the youth and women.

This has led to innovations and entrepreneurial activities with the aim of improving their standards of living, especially in the informal sector. The inability of a large proportion of school leavers to secure jobs has left many to come up with their own businesses as a means of livelihood.

  • Economic growth

Despite the high cost of living, the negative impact of the Covid-19, and the fall-out of the Russia-Ukraine war, the Kenyan economy is expected to pick up given the high infrastructural developments, for instance, that are bound to provide ample opportunities for entrepreneurial developments.

Kenya being a developing nation, the opportunities for entrepreneurship brought about by countless innovations are large and far-reaching ranging from technology to agriculture, manufacturing to service, education to finance and real estate to infrastructure.

Global technological advancements and local innovations such as M-Pesa have greatly enhanced convenience and the ease of doing business.

  • Government/private sector initiatives

The government and the private sector have come up with several initiatives aimed at promoting entrepreneurship in the country. While the government has come up with various initiatives to support the entrepreneurs, the private sector has moved to increase access to credit.

ALSO READ: Kenya to import maize outside EAC as flour prices surge

Over the years, the government, through various partnerships has moved to empower and support budding young entrepreneurs including the youth, women, and the physically disabled.

  • Education levels

We have seen a lot of growth in the tertiary education sector with a lot of new campuses being opened up. This will continue leading to significant growth in the knowledge base and is bound to improve the rate of discovery in the country.

Factors Discouraging Entrepreneurs in Kenya

However, the Kenyan population faces obstacles that hinder them from exploiting their full potential. These obstacles are statutory, economic or social:

  • High taxes

High taxes have a significant impact on entrepreneurial activity hindering innovation. Entrepreneurs are discouraged to invest their ideas in the formal sector which has strict statutory regulations and will rather work in the informal sector where they can evade tax.

  • Unclear and/or too many conflicting regulatory hurdles

It should be easy for any entrepreneur to register and run their business as long as they can comply with the required regulations. Streamlining the regulatory authorities so that there is a minimum waiting time to receive service should be key across all sectors.

  • Difficulty in attracting and retaining a quality workforce

A good entrepreneurial venture requires a skilled and dedicated workforce. The difficulty and the expenses associated with sourcing or training such a workforce discourages entrepreneurial activity as entrepreneurs try to minimize their startup costs.

Improvement of the education system to a problem solving based and rounded education system will help, as the quality of graduates will be improved thus reducing the cost of training.

  • Prevalent corruption in the country

Corruption within public and private sectors make it hard for ambitious entrepreneurs to pursue their ideas, as they have to pay bribes to attain the necessary statutory approvals. The Government’s war on graft is a step to curb the challenge of corruption in turn inspiring the public to innovate.

Despite these challenges, the opportunities for entrepreneurial activities present an attractive prospect for economic diversity and growth. With the right governance, Kenya is poised to be Africa’s leading entrepreneurship hub.

Rich entrepreneurial culture in Kenya will create jobs, grow the economy and uplift the standards of living. The current depreciation in the Kenya Shilling, in the long-term, can be well addressed by entrepreneurs manufacturing more locally to reduce imports, exporting more to global markets, and thereby strengthening the Kenya Shilling.




About Korir Isaac

A creative, tenacious, and passionate journalist with impeccable ethics and a nose for anticipated and spontaneous news. He may not say it, but he sure can make one hell of a story.

View other posts by Korir Isaac


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