On March 28th 2023, together with the BMW Foundation, we gathered over 75 local and international partners, social innovators, business leaders, investors, and development partners in Ghana at an exclusive “Partnering for Change” event in Accra. The goal of this initiative was to facilitate cross-sector discussions, build new collaborations and enhance the local social entrepreneurship ecosystem.
Here are some of the learnings that came out of the event:
The Ghanaian ecosystem is buzzing
Back in 2012, when Reach for Change started operating in Ghana, the ecosystem was basically a blue ocean. There were no major players and the term social entrepreneurship was not widely known. Reach for Change pioneered the adoption of the concept and implemented initiatives for the development of the ecosystem. Fast forward, over the past decade, we have worked with over 300 social entrepreneurs, who have in turn supported over 800 000 children and youth. The topic has become hot on the national agenda and there are emerging ecosystem players focusing on different segments of the entrepreneurship landscape.
The public sector has a key role to play
The government in Ghana sees social entrepreneurship as a major tool to drive job creation and economic empowerment. The recent population census suggests that over 57% of the country's population is under the age of 25. We have a lot of manpower, but there aren’t enough jobs to absorb them, so as many as a quarter of those millions of young people are unemployed or underemployed. This is a matter of national security concern, and the government is taking the issue of job creation seriously.
Entrepreneurship teaches young people how to start a small business or organisation of their own and create jobs for themselves and others.
All of the 16 regions in Ghana have what we call business resource centres - hubs owned by the government, which are quite well equipped. The goal is to support new and existing entrepreneurs with business skills development and technical assistance among other support mechanisms.
This is part of the strategy and work of Reach for Change too. Besides running various capacity-building and ecosystem development programs, we’re also advocating for a change in policy through our work with Social Enterprise Ghana. Currently, social entrepreneurs have to register either as not-for-profit organisations, or limited liability companies. We’re advocating to convince the government to make it possible for them to register as social entrepreneurs, and to provide various legal and tax benefits that can help social startups maximise their impact. A draft National Social Enterprise Policy, which we helped co-create, is being reviewed, and I’m optimistic we’ll see even more positive changes soon.
Impact investing in Ghana - from international to local resources
We’re still in a situation where a significant chunk of equity investments and grant funding comes in from the international market. There are many institutional donors like the EU, GIZ, and UN, as well as key private ones - like the Mastercard Foundation. But things are slowly changing. Reach for Change is a founding member of Impact Investing Ghana, which is currently looking into setting up a local impact fund, and mobilising local resources for investments and capacity building.
When it comes to venture capital firms, the general belief is that they look only for entrepreneurs that can handle large investments. But actually, the VC spectrum in Ghana is broad and there’s room for every kind of entrepreneur looking for support. During our panel discussions at the event, investors said they’re also open to giving small ticket sizes, and that they’re particularly interested in startups with a social or environmental impact. In fact, one of the issues that stuck with me is the fact that they have money “sitting down”, as they’re not able to find the right entrepreneurs to invest in. As our learnings from other markets show, in order to increase the number of impact investors, we also need to build a pipeline of social entrepreneurs - as one cannot exist without the other.
The social entrepreneurs - shifting from an NGO to an entrepreneurial mindset
At Reach for Change, the idea of social entrepreneurship is doing good and doing well at the same time. Doing well means being financially sustainable. And doing good means focusing on the social and environmental aspects of your work. We strive to bring the two together, as neither one should come after the other. In the past, most of the social enterprises we supported started as NGOs, focusing mostly on the social problem they wanted to solve while depending heavily on grants and donor funds. One of our key tasks has always been to help them find a sustainable business model. We are not insisting they make profits, but we’re determined that they should find a way of generating revenue that will sustain their operations.
We teach them that if they are not self-sustaining today, then tomorrow they won’t be able to provide support for the customers they’re serving.
We’re also equipping them with the know-how on what it takes to attract a VC fund, and how to use and report on such investments. That way we’re diversifying their opportunities, and as they grow with us, they begin to make decisions as to what is best for them.
A major component of our capacity development programs revolves around building entrepreneurial mindsets. We do this kind of work with young students, idea stage and early stage innovators who are just starting their journey with us, but also with established, early growth and growth stage businesses. For example, in our Scaling Readiness program with the Jacobs Foundation, we had a whole immersion week, focused on helping entrepreneurs reconsider their business models and how they can be scaled. You need a mindset and motivation for scaling. You need to make sure that you are providing value for your target group so that they are happy to pay for the services or products you are providing.
We need more cross-sector synergies to drive the ecosystem forward
The entrepreneurial ecosystem in Ghana today is on the rise, but we are still missing out on opportunities. The ecosystem is fragmented and very often we see duplication of programs and efforts.
The missing link is our inability to come together as ecosystem players and find a middle ground and a common language.
That is why our Partnering for Change event came in at a very crucial time. We can achieve much more when we work together. Collaboration consistently leads to a much greater impact than if we work in silos.
Reach for Change Ghana will continue to facilitate cross-sector dialogues and explore synergies for collective impact with local and international investors, donors and philanthropists, entrepreneurship hubs, and policymakers.
Want to partner up with us? Drop me an email at: [email protected]