BACKGROUND TO THE PROJECT
High youth unemployment is hindering Ghana’s economic growth. According to a 2016 World Bank study, de facto 48 per cent of Ghanaians aged 15 to 24 are to be regarded as unemployed. Youth unemployment is seen as a major risk to the stability of the country and the entire African continent.
Start-ups create jobs and are currently experiencing a boom in Ghana, particularly in the capital region. The start-up scene in and around Accra and the port city of Tema is attracting a lot of international attention as well as substantial funding.
In other parts of Ghana, however, such as Kumasi, the country’s second-largest urban area, innovative entrepreneurs are lacking support and advice. The challenges facing Ghanaian start-ups are manifold: digital infrastructure is limited, meaning that e-commerce – a typical area of business for entrepreneurs – is virtually non-existent in the country. Financing is not viable for many entrepreneurs as loans are only granted on short terms and at very high interest rates of up to 35 per cent. Alternatives, such as crowdfunding, have yet to make much headway in Ghana, and ‘business angels’, who help with both financing and networking, are rarely interested in the small-volume business that is common in the country. In addition, the start-ups’ business ideas and projects are often not mature enough to persuade investors.
However, Kumasi is now home to seven start-up support centres providing advice to people looking to set up a business. Although they work together, they lack the necessary links with higher education institutions, entrepreneurs, advisory institutions, mentors, investors, big corporations and the government. If Kumasi’s support centres were better integrated, they could do more to boost economic development in the region. They could also serve as multipliers for the Ghana Tech and Business Hubs Network (TBHNG), the network of Ghanaian innovation and start-up support centres, and help more innovative entrepreneurs in Kumasi make their business a success by providing better contacts.
PROJECT OBJECTIVE
The project aimed to support the start-up ecosystem in Kumasi in providing better advice to start-up entrepreneurs. This was designed to enable new businesses to be set up that create new jobs and sources of income and help boost Ghana’s economic development and international competitiveness.
The project was also supporting to achieve the Sustainable Development Goals (SDGs), primarily promoting sustainable economic development and decent work for all.
PROJECT ACTIVITIES
The project was underpinned by intensive dialogue between the economic regions of Kumasi and Dortmund/Ruhr region, both of which are keen to tap into new labour market potential by supporting innovation and start-ups. In this, Kumasi was able to benefit from Dortmund’s experience in shaping structural transformation – in its case from a heavily industrialised region to a modern service hub in the Ruhr. The partners from both regions were involved in the detailed design and organisation of the programme to promote the start-up ecosystem in Kumasi.
The project involved the following joint activities:
Startup Tour NRW and RuhrSummit 2019
The dialogue between the two start-up scenes – Kumasi on the one hand and Dortmund and the neighbouring Ruhr region on the other – was initiated with the “Startup Tour NRW” in October 2019. Organised together with the City of Dortmund Economic Development Agency, the tour featured fifteen representatives of seven business hubs, start-ups and two employees of Kumasi Metropolitan Assembly. The delegation from Kumasi visited business hubs, start-up support centres and entrepreneurs in the Ruhr region and took the opportunity to share experiences with them. At a joint workshop, the partners from Ghana and the Ruhr came up with proposals for cooperation and formulated ideas for shared business concepts. One highlight was a visit to the RuhrSummit 2019, NRW’s biggest conference for start-ups, where the group had the chance to find out about the latest business trends and exchange ideas with experts from the start-up scene.
Pitch competition at the sixth German-African Economic Forum
Ten selected start-ups from Kumasi took part in the sixth German-African Economic Forum in Dortmund in February 2020. The forum was mainly for companies from North Rhine-Westphalia and across Germany who were interested in investing in and trading with Africa. It thus offered the start-ups the opportunity to make contact with potential business partners and investors. On the eve of the forum, the start-ups from Kumasi were prepared for the event with a training session on pitching followed by a competition. The two best-performing start-ups in the training competition then took part in the pitch by African start-ups at the Economic Forum. The final day of the trip featured a networking meeting at the Ruhr Hub in Essen as well as study visits to companies running start-up schemes.
Sponsorship prizes for start-ups
International start-ups pitched to German companies and investors as part of the RuhrSummit and the sixth German-African Economic Forum. However, the business models of many Kumasi start-ups are often not mature enough yet to attract international investors. The project thus helped to organise a competition featuring sponsorship prizes in order to support promising start-ups in other ways.
Virtual technical exchange
In addition, actors from the start-up scene in Dortmund/the Ruhr region and Kumasi engaged in an in-depth exchange, which helped strengthen the competencies of the business hubs and their start-ups from Kumasi through training, consulting and coaching. Due to the COVID-19 pandemic, the exchange was held only online.
Equipment for the start-up support centres
The project was helping the start-up support centres by kitting out their training rooms, co-working spaces and laboratories.
Brief project description
Title: Supporting the Start-up Ecosystem in Kumasi to Promote Employment in Ghana
Term: July 2019 – March 2021
Sector: Economic development and employment promotion
Supported by: State Chancellery of North Rhine-Westphalia
Partners and actors