Business

What the youth in Benin aspire to

Through Beringer GLOGLO, Economist, Founder of the Circle of Young Economists for Africa


At the end of the coronavirus crisis, Beninese youth seem to want to regain the qualifier of “Latin Quarter”, formerly, lent to Dahomey. But this time things are different. Instead of the political landerneau, young Beninese have chosen the field of entrepreneurship. Innovations flourish there. Fashion, new technologies, cross-border payment systems, hospitality and tourism, etc. – the areas of intervention are varied. For example, Funeral is an ethical and eco-responsible fashion brand that revisits the woven loincloth (” canoe » ancestral). At the crossroads of historical and contemporary art, culture and real estate, Art Residence established in the historic city of Porto-Novo has become a new player in tourism. SuTchaa, a mobile application, wants to accelerate and facilitate dematerialized financial transactions using a simple QR code without the need for an internet connection or a prior bank account. Asuka Spirit arouses social effervescence with its innovative technological solutions, connected glasses and watches, laptop core i7, Made in Benin.

On the one hand, these changes demonstrate the voluntarist spirit of Beninese youth not to remain on the sidelines of the changes observed in the world. Considering economic theory Schumpétérienne, on the other hand, they send back positive signals about the future of the economy, the private sector in any case. Indeed, for the economist Joseph Schumpeter (1883), “Innovation and technical progress are the main driving forces behind economic progress”. Recall that the economy of Benin had already shown particular resilience in the sub-region during the coronavirus crisis with positive economic growth of 2.3% at the end of 2020 (ADB).

Yet it is at the heart of this flourishing landscape of good news that two essential points of reflection emerge. It is about the transformation of the profile of the companies and the traditional question of the availability of energy resources.

The first alludes to digital entrepreneurs. In his work “Digital to the rescue of Africa”, the economist – essayist, Sophonie Koboude, hammered home the opportunity that digital represents for entrepreneurship in Africa. However, there is a profound change in the risk profile of companies in the digital domain – which can complicate the financing problems already observed. To understand this let’s consider a startup that designs mobile applications. It concentrates a significant part of the investment from the start of the activity (equipment, labor, financial capital) without any guarantee of the success of the application in fine. Ideally, when the app is successful in the market, it won’t need the same amount of investment to duplicate the app under another system or to make updates. This implies that in the long term, its marginal production cost is almost zero. But at the same time it is much more risky. However, we know the aversion of banks in the sub-region for the financing of pre-existing companies.

The second point, the availability of energy resources, concerns all companies, whether they are in the digital field or not. It is not enough for entrepreneurs to have innovative ideas or solutions, but they still need to be able to really produce – on time – in sufficient quantity and above all at low cost to remain competitive. The availability of quality energy is not a sufficient but essential condition. In particular, for digital companies, energy is not only necessary for production but also for consumers of their product. The use of an application by individuals or professionals via a technology support requires a priori energy.

In the end, the dynamism and creativity of the youth constitute a pledge of economic development in Benin. Nevertheless, the latter remains conditioned. The prevailing framework offers a fertile ground to revive an old debate, the quintessence of which rests on the mode of financing of African economies and the creation of a sustainable ecosystem favorable to the development of the private sector.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button