Guest Post

Empowering Africa’s Entrepreneurs: The Critical Role of ESOs in Africa’s Entrepreneurial Ecosystem

By  |  June 28, 2024


In 2018, Immy Nakyeyune embarked on a transformative journey, founding Mkazipreneur with a
resolute mission: to support women entrepreneurs across Africa. Through strategic funding and
purposeful partnerships, Mkazipreneur in Uganda has trained over 10,000 women entrepreneurs
and transformed non-tech-enabled, women-led SMEs into technologically adept enterprises. The
organization has also played a pivotal role in facilitating access to capital and markets, propelling
the growth and sustainability of women-led ventures.


There are many similar stories of organizations spurring the growth and sustainability of startups
across sub-Saharan Africa. These organizations, often called Entrepreneur Support Organizations
(ESOs), operate as incubators, accelerators, and tech hubs. They provide invaluable and
contextualized support that African entrepreneurs need to grow within and beyond their local
markets. The region boasts over 600 active ESOs, a testament to the continent’s high rate of
entrepreneurship.


Over the past few years, the ecosystem in sub-Saharan Africa has seen unprecedented growth.
Between 2018 and 2022, early-stage funding increased by 227%, highlighting the rapid
development of the startup scene in the region. Despite this surge in funding, substantial capital
and training shortfalls persist, hindering meaningful advancements to ensure sustainable growth
and development. Investors’ skepticism adds another layer to this challenge as startups in the
region are often overlooked and considered high-risk and lacking the necessary infrastructure
and support systems for scalability. De-risking startups is, therefore, key to boosting investor
confidence, and this means going beyond directing funding to startups to investing in ESOs, the
first line of support for early-stage startups in the region.


Ecosystem Building: Strengthening ESOs for Sustainable Growth


Despite their importance, only a small fraction of funding reaches ESOs. Organizations such as
the Argidius Foundation are at the forefront of ecosystem-building initiatives, supporting the
creation of effective ecosystems for small and medium enterprises. Through the Uganda
Ecosystem Builders program
, the foundation partnered with Village Capital to support
Mkazipreneur and 12 other ESOs to improve their strategy and sustainability.


“After seven years of offering free services, the program challenged us to shift to
paid-for-services, and we have not turned back. The start was slow, but we have attracted a new
caliber of startup founders who are able and willing to pay. The beauty of paid-for programs is

that participants are way more active in the program. They feel the pinch of their money. We are
also attracting entrepreneurs more committed to growing their businesses,” shares Noeline
Kirabo, Executive Director of Kyusa, a Uganda-based ESO providing business development
services for small and growing businesses. “This move has helped us diversify our revenue
streams, and we are putting more weight on generating earned revenue. We are clear about how
and who we are targeting. Going through the program was a real wake-up call for us. We are
certain that we can stay afloat with our new business model no matter the changing tides,.”


E4Impact is another example of a notable ESO that has benefitted from ecosystem-building
initiatives. In 2021, the ESO was among the few selected to join the O-Farms program established
to scale the circular agri-business ecosystem in East Africa.


“We joined the O-Farms program to enhance our support for emerging entrepreneurs and
strengthen our overall business capabilities in the agri-circular space,” Isabella Tenai, Accelerator
Manager at E4Impact, reflects on their experience. “Through the program’s comprehensive
training and preparation, we significantly improved our program management skills and
expanded our knowledge in agri-circularity. As a result, we have seen notable improvements in
our ability to support entrepreneurs in the green economy and have successfully applied these
learnings to other projects within our organization, for example, the E4Impact Accelerator and
WONDER, among others. The program’s insights into circularity principles, market development
for the last mile, and structured investment readiness have been precious, enabling us to drive
growth and efficiency across our initiatives.”


Development Finance Institutions (DFIs) are similarly channeling their funding towards
ecosystem-building to advance their broader initiatives promoting economic development. In
2022, the Africa Development Bank (AfDB) launched the Innovation & Entrepreneurship Lab as
part of its Jobs for Youth in Africa strategy. One of the strategies The Lab is using to foster youth
innovation and entrepreneurship is supporting ESOs. “By supporting organizations that structure
entrepreneurial ecosystems and provide direct support to startups, the African Development
Bank hopes to create a ripple effect that will spur creation and growth of more startups, create
jobs and value for their communities and clients,” highlights the bank.


More recently, with support from Norway through Norad—the Norwegian Agency for
Development Cooperation
, Village Capital launched the Empowering Sustainable
Entrepreneurship Africa
program. This initiative, designed to strengthen climate entrepreneurship
in Ghana, Kenya, Malawi, Mozambique, and Tanzania, has a two-fold structure. First, it supports
ESOs by providing them with the tools and resources to build sustainable organizations, enabling
them to develop initiatives that effectively support climate startups. Speaking on the program’s
launch, Per Fredrik Ilsaas Pharo, the Director of Climate and Environment at Norad, shared,
“Entrepreneurs and startups with innovative ideas and services have an important role in
contributing to the Sustainable Development Goals. Today, such actors often lack access to
financing and technical support due to a number of barriers. We hope that some of these barriers
will be overcome by strengthening the entrepreneurial ecosystem through Entrepreneur Support
Organizations.”


The connection between ESOs and entrepreneurs cannot be overlooked. Founders need more
than funding: they need an ecosystem that can fully support their unique needs. ESOs act as
catalysts, providing critical support to nurture sustainable startups and cultivating an investable
pipeline for impact investors. Strengthening this vital partnership is key to creating a thriving
ecosystem, especially in regions such as sub-Saharan Africa, where the entrepreneurial
landscape is vibrant yet challenging. Investing in ESOs is not just a strategic move; it’s smart
business.



About the author

Susan Nakami is the Regional Lead for Africa at Village Capital. She is a serial entrepreneur
and innovation enthusiast with extensive experience in business advisory and in designing,
implementing, and monitoring programs tailored to the African context. Susan is particularly
passionate about unlocking access to capital for women founders in Africa.

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