SUPPORT | December 27, 2018

African Policy Hack Solution Sheds Light on “Unseen” SMEs

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The Global Entrepreneurship Network (GEN) Africa, the World Bank, the United Nations Conference on Trade and Development (UNCTAD), the Industrial Development Corporation (IDC) and the Department of Small Business Development (DSBD) South Africa partnered together to host the first Startup Nations Policy Hackathon in Johannesburg, South Africa.

The initiative brought together over 50 ecosystem stakeholder that included: entrepreneurs, policy makers, enterprise development practitioners, civil society, academia and private sector representatives. Ecosystem stakeholders were grouped into teams of five to 10 “hackers” to explore innovative ways to address some of today’s most pressing policy issues faced by startups and entrepreneurs in South Africa. The objective of the hack was to enable a structured policy dialogue and engagement between key ecosystem stakeholders, and explore diverse thinking and best practices to improve policy objectives and implementation.

The first phase of the policy hack included a discussion process with representatives from the World Bank, UNCTAD and the Industrial Development Corporation (IDC) to select five barriers to entrepreneurship in South Africa.  Based on the discussions, provided below are the five selected themes:

  • Reducing barriers to entry for startups – this includes the company registratiosuppln process, regulatory burden and tax burden;
  • Reducing late invoice payments – both from public sector and private sector;
  • Monitoring and evaluating 30 percent procurement access for SMEs;
  • Reducing trade barriers between regional blocs in Africa;
  • Implementing entrepreneurship education in basic education curriculum.

Teams were selected in the second phase of the hack and participated in various brainstorming sessions to propose solutions that could unleash entrepreneurship in South Africa.  The policy hack judges were representative from DSBD, International Labour Organisation (ILO), World Bank and IDC. 

Two teams, led by Fredell Jacobs, chief startup officer at Startup Support SA, and Zuanda Reid, program manager at The Thinkroom, were finalists at the policy hack.  Jacobs team tackled how to incorporate entrepreneurship in the basic education curriculum ­– looking at the best possible changes in regulations and how to involve the ecosystem and government officials in the discussion. Reid’s team took on the problem of reducing trade barriers between regional trade blocs in Africa.

Team leader Jak Koseff, chief director at the Office of the Premier, Gauteng Province, South Africa, and his team members took first place at the competition for hacking a solution that addressed the 30 percent SMME procurement policy.  The policy proposal was elevated and refined at the global edition of the Startup Nations Policy Hack in Surabaya, Indonesia.  Koseff teamed with senior officials from across Africa under the title of “Digitizing Procurement of SMME inclusion”.  The team focused on enabling the 60 to 80 percent of African SMMEs that are considered informal, to evolve into suppliers to both government and private sector value chains. 

The solution, presented by Koseff, was picked as one of the three global finalists in the policy hack contest. He outlined his solution as the 3Ds:

  • Discovery – using geospatial technology to provide visibility to all SMEs including the “unseen sector” as potential contractors and service providers for the public and private sector.
  • De-risk –  using technology to collect data, provide capacity and support tools that de-risk liability of procurement and finance from SMEs and the “unseen sector”;
  • Delivery – through providing SMEs and informal businesses with systematic support, visibility and access to contracts or sub-contracts from public and private sector. By spatially targeting quotas for procurement of goods and services from SMEs, and better enabling pipelines of SMEs from disadvantaged areas. 

The policy team for this solution included; Alesimo Mwanga, research director, GEN Africa - 22 on Sloane, South Africa; Florence Kimata, SME advisor to the Cabinet Secretary, Ministry of Industry, Trade & Cooperatives, Kenya; and Shehu Abdulkadir, special assistant to the Minister of State, Federal Ministry of Industry, Trade and Investment, Nigeria.

The African teams are in the process of working together to design, test and implement the refined proposed digital procurement solution with the support of global mentors.  In 2019, the first phase of testing will take place in South Africa and Kenya, the final beta version in Nigeria.  Results from the proposed tool will be shared with the wider community for further development and public input towards the end of 2019.

In 2017, Alesimo was the youngest contributor to co-author the South African Global Entrepreneurship Monitor (GEM) 2016/2017 report alongside… About the author