The Unlikely Hotbed for African Entrepreneurs

The Unlikely Hotbed for African Entrepreneurs

Tunisia is ranked No. 1 in Africa in the 2018 Global Entrepreneurship Index (GEI), an indication of the country’s strong economic ecosystem for supporting startups.

SourceEzequiel Scagnetti/Fotogloria/LUZ/Redux

Why you should care

Nearly 15 percent of Tunisia’s population is unemployed — that’s a lot of untapped talent waiting to be unleashed.

Tunisia rippled with human energy after the Jasmine Revolution of 2011, with people finally having hope for their future. But by 2014, one-third of the country’s youth were still “not in employment, education or training” (NEET), according to the World Bank. Today, efforts to cultivate a healthy startup ecosystem — with cascading national benefits — are finally shifting the dial. So much so that according to the 2018 Global Entrepreneurship Index (GEI):

Tunisia is the best country in Africa for entrepreneurs, beating out economic giants Nigeria, Egypt and South Africa.

Produced by the Global Entrepreneurship and Development Institute and funded by the European Union, World Bank and others, the GEI measures the “quality and dynamics of entrepreneurship ecosystems at a national and regional level.” Does the population have the skills to start a new business? Can they accept risk? What about access to capital? These are a few of 14 pillars the report scores. Of 137 countries in 2018, Tunisia ranked 40th overall, sixth in the Middle East and North Africa region and first in Africa.

Here in Tunisia, we’d like to see ourselves as one of the points on the map of entrepreneurship in the world.

Haythem Mehouachi, Tunisian investor

Showing confidence in the quality of Tunisian entrepreneurs, the GEI gives individuals a 76 percent score. Amel Saidane, president of Tunisian Startups, backs this up. Her hub of startups has successfully lobbied the government to remove administrative barriers to launching new ventures. The people’s perseverance and resilience are important ingredients for a successful ecosystem, but, she says, other must-haves are missing.

Tunisia’s supporting institutions scored a paltry 46 percent on the GEI — bringing the overall score to 42 percent. “You have to have the funding, the legal framework, the capacity to interact with the international scene,” says Saidane. “And all this has been lagging.” A former project manager for Siemens and Microsoft, she insists an enhanced legal framework will alleviate other problems.

Zied Ouled Ali agrees. He helped found Tunisian Startups after struggling to build his company, Safozi, the first in Tunisia to offer hosting services based on cloud computing. “Eighty percent of the problems [Tunisian entrepreneurs encounter] are the same, and 20 percent are related to our [individual] business,” he says. Enter the Startup Act. Recently voted into law, it is designed to reward entrepreneurship and provide administrative help at every stage of a startup’s life cycle. And then there’s the funding issue.

Although the GEI gives risk capital a 70 percent score, Saidane questions this assessment. It takes up to 18 months to secure funds, she says, which is “long enough to kill any business.” That said, she is on the steering committee developing a new Central Bank–supported Fund of Funds that would channel monies from big players like the African Development Bank into various smaller funds. Designed to provide incentives for new venture capitalists to come to market, Saidane hopes it will take off by mid-2019. As for the competition, you might be surprised which country comes in next.

Tiny Botswana received an overall GEI score of 35 percent, followed by South Africa with 33 percent. Egypt scored 26 percent, while Nigeria, neck and neck with South Africa as the continent’s largest economy, scored a measly 20 percent.

Up north, big ambitions are brewing, according to Haythem Mehouachi. A private investor and member of the Startup Act task force, he says, “Here in Tunisia, we’d like to see ourselves as one of the points on the map of entrepreneurship in the world.”

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