Tracking constraints to entrepreneurship in Africa

An important part of understanding the growth prospects of an economy comes from understanding the constraints to business growth and entrepreneurship. Unfortunately, the data in this area is scarce in East Africa. The World Bank collects two sets of data in this vein, both of which suffer from some well-known issues such as the focus being solely on formal firms, medium to large enterprises or on the legal framework of doing business. This project aims to collect systematic regular data directly from a large sample of entrepreneurs from small firms in two East African countries to fill this data gap.  These data will form the first step in a broader research agenda on small firm growth.

SMEs play an important role in the economic growth of all East African countries. The Kenya Ministry of Industry, Trade and Cooperatives (MoITC) has previously worked on improving the doing business indicators but due to lack of data on SMEs has been unable to focus on smaller firms. The findings of this project are expected to inform specific steps MoITC can take to foster SMEs in Kenya as part of their Industrialization Strategy. Similarly, in Uganda, this study will inform IGC’s engagement on the Firms agenda. The Assistant Commissioner of the Micro & Small and Medium Enterprises Division in the Ugandan Ministry of Trade, Industry & Cooperatives (MTIC) has also expressed interest in receiving the findings from this study in bilateral meetings with IGC’s Uganda country team.

This is largely a data collection exercise. The data collection is a close collaboration between an academic researcher and a technology company, called Viamo Mobile that is headquartered in Ghana but now has offices in many African countries.  The data will be collected by mobile phone surveys. These will be automated surveys, conducted using IVR. Viamo will set up a mobile platform to conduct these surveys in each of the two countries. The surveys are recorded beforehand in local languages and are conducted in an automated way allowing individuals to respond using numbers on their phone.