{"id":23809,"date":"2025-03-26T10:01:23","date_gmt":"2025-03-26T11:01:23","guid":{"rendered":"https:\/\/www.premium-partners.net\/?p=23809"},"modified":"2025-03-27T07:04:27","modified_gmt":"2025-03-27T07:04:27","slug":"unlocking-africas-trillion-dollar-potential-why-startups-need-more-than-just-sme-policies","status":"publish","type":"post","link":"https:\/\/www.premium-partners.net\/fr\/builder\/unlocking-africas-trillion-dollar-potential-why-startups-need-more-than-just-sme-policies\/","title":{"rendered":"Unlocking Africa\u2019s trillion-dollar potential: why startups need more than just SME policies"},"content":{"rendered":"

This post<\/a> was originally published on this site<\/a><\/p>

<\/p>\n

Buntu Majaja <\/em><\/p>\n

 <\/span>Africa\u2019s economic growth is too slow for its population boom. With GDP growing at just 3.5% annually while the population expands by 2.5%, the continent is barely inching forward at 1% per capita growth each year. At this rate, it would take 140 years to reach India\u2019s projected 2025 GDP per capita of $11 000 (R200 765.29), 200 years to match China, and 300 years to reach Germany\u2019s standard of living. Something isn\u2019t working.<\/span> <\/span><\/p>\n

This is not about talent – we have plenty. It\u2019s not about ambition for Africa is home to some of the most innovative entrepreneurs in the world. The real issue is that we keep making the same trillion-dollar mistake. We treat startups like traditional businesses and by doing so, we are holding back the very companies that could transform Africa\u2019s economy. And while we hesitate, the rest of the world is moving ahead fast.<\/span> <\/span><\/p>\n

 The Global Economy Is Being Reshaped Right Now <\/strong><\/p>\n

 <\/span>Artificial intelligence isn\u2019t the future, it is already here, and it is changing how industries operate, creating new global giants overnight. Agile companies that adapt quickly, like Amazon, OpenAI, and Alibaba, are keeping up and rewriting the rules of the global economy.<\/span> <\/span><\/p>\n

 <\/span>Apple, Google, and Samsung became dominant because they moved fast, while companies that hesitated became irrelevant. Africa is at a critical moment. If we keep treating startups like small \u2018traditional\u2019 businesses, applying the wrong policies and expectations, we will miss our biggest opportunity for exponential economic growth.<\/span> <\/span><\/p>\n

 <\/span>One of Africa\u2019s biggest economic missteps is confusing startups with small and medium-sized enterprises (SMMEs). The two are fundamentally different. SMMEs grow steadily, meeting local demand. A restaurant, a logistics firm, and a retail shop are examples of this. Startups are designed to scale exponentially, disrupt industries, and create new markets. Think Uber, Paystack, Temu, and Shein.<\/span> <\/span><\/p>\n

 <\/span>We keep applying SME-style policies to startups, measuring their success by short-term job creation and profitability instead of their potential to scale and reshape entire economies. This is like expecting a rocket to climb a skyscraper floor by floor instead of launching into orbit.<\/span> <\/span><\/p>\n

 Bridging the Gap: Budget Speech, Investment & Startup Growth <\/strong><\/p>\n

 <\/span>We also see the failure to distinguish between startups and SMMEs play out in our national economic policy. The 2025 South African National Budget highlighted this gap in a stark way. While Finance Minister Enoch Godongwana’s speech addressed economic constraints, SMMEs received only passing attention. Worse still, the Department of Small Business Development was allocated a mere 2% of the total budget which is a fraction of what is needed to drive real entrepreneurial growth.<\/span> <\/span><\/p>\n

 <\/span>While efforts to expand the tax base are understandable, small businesses are now potentially facing added burdens, such as the proposed VAT increase. The additional 0.5% VAT hike in 2025\/26 and another 0.5% in 2026\/27 will place further financial strain on already struggling enterprises. Finding ways to balance revenue generation with pro-growth incentives for scaling businesses could strengthen long-term intended outcomes.<\/span> <\/span><\/p>\n

While public sector wages see increases, SMMEs are left in a precarious position, with many forced to cut jobs to stay afloat.<\/span> <\/span><\/p>\n

 <\/span>The reality is that the National Development Plan predicts that 90% of new jobs by 2030 will come from SMMEs. However, without substantial policy reform, targeted funding, and a framework that distinguishes scalable startups from traditional businesses, the potential for these companies to drive Africa\u2019s economic transformation will remain unrealised.<\/span> <\/span><\/p>\n

 Startup Scale Equation Thinks Beyond Jobs <\/strong><\/p>\n

 <\/span>Standard measures such as direct job creation and Ebitda, while effective for traditional businesses, miss the point when it comes to startups. Startups don\u2019t exist to hire thousands of employees. They exist to remove inefficiencies, unlock access, and solve problems at scale. And when they do, they create entire ecosystems where millions of jobs follow.<\/span> <\/span><\/p>\n

 <\/span>Alibaba built an e-commerce ecosystem that empowered millions of merchants. Shein created a global supply chain that enabled small retailers worldwide. Temu reshaped logistics for global e-commerce. They didn\u2019t create millions of jobs within their own companies. They created the infrastructure that made millions of jobs possible.<\/span> <\/span><\/p>\n

 <\/span>We have proof that African startups can create massive economic impact. M-Pesa unlocked financial inclusion, allowing millions to transact digitally. Flutterwave enabled thousands of African businesses to sell online and scale globally. Andela didn\u2019t focus on local employment but built a pipeline of African tech talent for the world.<\/span> <\/span><\/p>\n

 <\/span>Startups indirectly create jobs at scale, and exponentially. And yet, we continue underinvesting in the very companies that have the power to transform Africa\u2019s economy.<\/span> <\/span><\/p>\n

 <\/span>The Infrastructure Myth: Startups Don\u2019t Wait – They Build <\/strong><\/p>\n

 <\/span>A common argument against investing in startups is that Africa \u201clacks the necessary infrastructure.\u201d History has proven that startups don\u2019t wait for infrastructure\u2014they create it. Over a decade ago, sceptics said e-commerce couldn\u2019t work in Africa due to weak logistics. Startups built their own solutions that included local delivery networks, digital payment systems, and pay-on-delivery models. <\/span> <\/span><\/p>\n

Today, e-commerce is thriving on the continent for the very reason that there are no legacy infrastructure systems.<\/span> <\/span><\/p>\n

 <\/span>Governments struggled for decades to expand national grids. Startups introduced mini-grid solar solutions and pay-as-you-go energy models. Now, millions have electricity because they built. Africa does not need to \u2018wait for better conditions.\u2019 It needs to empower startups to build those conditions through access to funding and enabling policies.<\/span> <\/span><\/p>\n

 <\/span>A Call to Action: Policies That Power Africa\u2019s Next Leap<\/strong><\/span> <\/strong><\/p>\n

The 2025 Budget signals an ongoing effort to support entrepreneurship and address economic constraints. However, as Africa\u2019s startup landscape evolves, policies can be enhanced to better accommodate the unique scaling needs of high-growth startups.<\/span> <\/span><\/p>\n

 <\/span>While traditional SME development remains a core driver of job creation, startups operate differently, serving as economic accelerators that create entire ecosystems. The conversation needs to shift toward measuring startups’ success through impact, scalability, and industry transformation rather than direct employment figures alone.<\/span> <\/span><\/p>\n

 <\/span>By refining regulatory frameworks to enable rapid growth and aligning policymakers, investors, and corporates, Africa can unlock the full potential of its energetic youth-minds and demographics dividend.<\/span> <\/span><\/p>\n

 <\/span>The question is not whether Africa will grow, but how fast it can scale. With intentional collaboration, bold decision-making, and even ecosystem reforms the continent can drive exponential economic transformation.<\/span> <\/span>Now is the moment to align vision with action because the trajectory of the next decade is being shaped today.<\/span><\/p>\n

BUNTU Majaja is the  CEO of the SA Innovation Summit.<\/figcaption><\/figure>\n

Buntu Majaja is the  CEO of the SA Innovation Summit.<\/em><\/p>\n

*** The views expressed here do not necessarily represent those of Independent Media or <\/span>IOL<\/span>.<\/span><\/em><\/p>\n

BUSINESS REPORT<\/strong><\/p>","protected":false},"excerpt":{"rendered":"

Buntu Majaja\u00a0\u00a0Africa\u2019s economic growth is too slow for its population boom. With GDP growing at just 3.5% annually while the population expands by 2.5%, the continent is barely inching forward at 1% per capita growth each year. At this rate, it would take 140 years to reach India\u2019s projected 2025 GDP per capita of $11 000 (R200 765.29), 200 years to match China, and 300 years to reach Germany\u2019s standard of living. Something\u00a0isn\u2019t\u00a0working.\u00a0This is not about talent – we have plenty.\u00a0It\u2019s\u00a0not about ambition for Africa is home to some of the most innovative entrepreneurs in the world. The real issue is that we keep making the same trillion-dollar mistake. We treat startups like traditional businesses and by doing so, we are holding back the very companies that could transform Africa\u2019s economy. And while we hesitate, the rest of the world is moving ahead fast.\u00a0\u00a0The Global Economy Is Being Reshaped Right Now\u00a0\u00a0Artificial intelligence\u00a0isn\u2019t\u00a0the future, it is already here, and it is changing how industries\u00a0operate, creating new global giants overnight. Agile companies that adapt quickly, like Amazon, OpenAI, and Alibaba, are keeping up and rewriting the rules of the global economy.\u00a0\u00a0Apple, Google, and Samsung became dominant because they moved fast, while companies that hesitated became irrelevant. Africa is at a critical moment. If we keep treating startups like small \u2018traditional\u2019 businesses, applying the wrong policies and expectations, we will miss our biggest opportunity for exponential economic growth.\u00a0\u00a0One of Africa\u2019s biggest economic missteps is confusing startups with small and medium-sized enterprises (SMMEs). The two are fundamentally different. SMMEs grow steadily, meeting local demand. A restaurant,\u00a0a logistics\u00a0firm, and a retail shop are examples of this. Startups are designed to scale exponentially, disrupt industries, and create new markets. Think Uber,\u00a0Paystack,\u00a0Temu, and Shein.\u00a0\u00a0We keep applying SME-style policies to startups, measuring their success by short-term job creation and profitability instead of their potential to scale and reshape entire economies. This is like expecting a rocket to climb a skyscraper floor by floor instead of launching into orbit.\u00a0\u00a0Bridging the Gap:\u00a0Budget Speech, Investment & Startup Growth\u00a0\u00a0We also see the failure to distinguish between startups and SMMEs play out in our national economic policy. The 2025 South African National Budget highlighted this gap in a stark way. While Finance Minister Enoch\u00a0Godongwana’s\u00a0speech addressed economic constraints, SMMEs received only passing attention. Worse still, the Department of Small Business Development was\u00a0allocated\u00a0a mere 2% of the total budget which is a fraction of what is needed to drive\u00a0real entrepreneurial\u00a0growth.\u00a0\u00a0While efforts to expand the tax base are understandable, small businesses are now potentially facing added burdens, such as the proposed VAT increase. The\u00a0additional\u00a00.5% VAT hike in 2025\/26 and another 0.5% in 2026\/27 will place further financial strain on already struggling enterprises. Finding ways to balance revenue generation with pro-growth incentives for scaling businesses could strengthen long-term intended outcomes.\u00a0While public sector wages see increases, SMMEs are left in a precarious position, with many forced to cut jobs to stay afloat.\u00a0\u00a0The reality is that the National Development Plan predicts that 90% of new jobs by 2030 will come from SMMEs. However, without substantial policy reform, targeted funding, and a framework that distinguishes scalable startups from traditional businesses, the potential for these companies to drive Africa\u2019s economic transformation will remain unrealised.\u00a0\u00a0Startup Scale Equation Thinks\u00a0Beyond Jobs\u00a0\u00a0Standard measures such as direct job creation and Ebitda, while effective for traditional businesses, miss the point when it comes to startups. Startups don\u2019t exist to hire thousands of employees. They exist to remove inefficiencies, unlock access, and solve problems at scale. And when they do, they create entire ecosystems where millions of jobs follow.\u00a0\u00a0Alibaba built an e-commerce ecosystem that empowered millions of merchants. Shein created a global supply chain that enabled small retailers worldwide.\u00a0Temu\u00a0reshaped\u00a0logistics\u00a0for global e-commerce. They\u00a0didn\u2019t\u00a0create millions of jobs within their own companies. They created the infrastructure that made millions of jobs possible.\u00a0\u00a0We have proof that African startups can create massive economic impact. M-Pesa unlocked financial inclusion, allowing millions to transact digitally.\u00a0Flutterwave\u00a0enabled thousands of African businesses to sell online and scale globally. Andela\u00a0didn\u2019t\u00a0focus on local employment but built a pipeline of African tech talent for the world.\u00a0\u00a0Startups indirectly create jobs at scale, and exponentially. And yet, we continue underinvesting in the very companies that have the power to transform Africa\u2019s economy.\u00a0\u00a0The Infrastructure Myth: Startups\u00a0Don\u2019t\u00a0Wait – They Build\u00a0\u00a0A common argument against investing in startups is that Africa \u201clacks the necessary infrastructure.\u201d History has proven that startups\u00a0don\u2019t\u00a0wait for infrastructure\u2014they create it. Over a decade ago, sceptics said e-commerce\u00a0couldn\u2019t\u00a0work in Africa due to weak\u00a0logistics. Startups built their own solutions that included local delivery networks, digital payment systems, and pay-on-delivery models.\u00a0\u00a0Today, e-commerce is thriving on the continent for the very reason that there are no legacy infrastructure systems.\u00a0\u00a0Governments struggled for decades to expand national grids. Startups introduced mini-grid solar solutions and pay-as-you-go energy models. Now, millions have electricity because they built. Africa does not need to \u2018wait for better conditions.\u2019 It needs to empower startups to build those conditions through access to funding and enabling policies.\u00a0\u00a0A Call to Action:\u00a0Policies That Power Africa\u2019s Next Leap\u00a0The 2025 Budget signals an ongoing effort to support entrepreneurship and address economic constraints. However, as Africa\u2019s startup landscape evolves, policies can be enhanced to better accommodate the unique scaling needs of high-growth startups.\u00a0\u00a0While traditional SME development\u00a0remains\u00a0a core driver of job creation, startups\u00a0operate\u00a0differently, serving as economic accelerators that create entire ecosystems. The conversation needs to shift toward measuring startups’ success through impact, scalability, and industry transformation rather than direct employment figures alone.\u00a0\u00a0By refining regulatory frameworks to enable rapid growth and aligning policymakers, investors, and corporates, Africa can unlock the full potential of its energetic youth-minds and demographics dividend.\u00a0\u00a0The question is not whether Africa will grow, but how fast it can scale. With intentional collaboration, bold decision-making, and even ecosystem reforms the continent can drive exponential economic transformation.\u00a0Now is the moment to align vision with action because the trajectory of the next decade is being shaped today.BUNTU Majaja is the\u00a0 CEO of the SA Innovation Summit.Buntu Majaja is the\u00a0 CEO of the SA Innovation Summit.*** The views expressed here do not necessarily represent those of Independent Media or\u00a0IOL.BUSINESS REPORT<\/p>","protected":false},"author":1,"featured_media":23811,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-23809","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-builder"],"_links":{"self":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/23809","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/comments?post=23809"}],"version-history":[{"count":3,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/23809\/revisions"}],"predecessor-version":[{"id":23814,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/23809\/revisions\/23814"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/media\/23811"}],"wp:attachment":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/media?parent=23809"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/categories?post=23809"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/tags?post=23809"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}