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Supporting the Start-up Ecosystem in Kumasi

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. The Ghanaian president, Nana Addo Dankwa Akufo-Addo, sees youth unemployment as the biggest risk for the stability of his country and the whole 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 start-up ecosystem in Kumasi is being supported in providing better help to innovative business models and young entrepreneurs. This will enable new businesses to be set up that will create new jobs and sources of income, and help boost Ghana’s economic development and international competitiveness.

The project is also helping to achieve the Sustainable Development Goals (SDGs), primarily promoting sustainable economic development and decent work for all.

PROJECT ACTIVITIES

The project is 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 will be 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 will have a hand in finalising the details of the programme for supporting the start-up ecosystem in Kumasi.

The project includes the following activities:

Kicking off with the Startup Tour NRW and a visit to the 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 structuring the GIZ project in more detail and formulated ideas for shared business concepts. One highlight was a visit to the RuhrSummit 2019, NRW’s biggest conference for start-ups. Over a day and a half, the group had the chance to find out about the latest business trends, exchange ideas with experts on the start-up scene in workshops, insight talks and ‘deep dives’, and watch a pitch competition. The trip to NRW also enabled the Ghanaian delegation to chat to an international group of start-up entrepreneurs that were taking part in the ‘Start.up! Germany 2019’ tour through the German Chambers of Commerce and Industry (DIHK).

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, where they attempted to woo their audience. 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 is thus helping to organise a competition featuring sponsorship prizes in order to support promising start-ups in other ways.

Virtual technical exchange 
Additionally, an in-depth exchange of expertise between the actors on the start-up scene in Dortmund/Ruhr area and Kumasi is implemented, in which the competencies of the business hubs and their start-ups from Kumasi will be expanded through training, consulting and coaching. Due to the Corana pandemic, this technical exchange takes place exclusively via virtual formats.

Equipment for the start-up support centres

The project is helping the start-up support centres by kitting out their training rooms, co-working spaces and laboratories.

Photo gallery

Brief project description

Title: Supporting the Start-up Ecosystem in Kumasi to Promote Employment in Ghana
Term: July 2019 – February 2021
Sector: Economic development and employment promotion

Supported by:
State Chancellery of North Rhine-Westphalia

Partners and actors

  • Kumasi Hive
  • Dortmund Chamber of Commerce and Industry
  • City of Dortmund Economic Development Agency
  • Center for Entrepreneurship & Transfer at TU Dortmund University
  • TechnologieZentrumDortmund
  • Impact Hub Ruhr
  • Ruhr Hub
  • Delegation of German Industry & Commerce in Ghana (AHK Ghana)
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