A key concern for many Africans is how they can grow incomes in a sustained and long-term manner. The reality is that some efforts can be made at the individual level, but holistic and trans-national income growth needs the support of others.
Thus, there are three layers of income growth: individual efforts, financing from others and government efforts.
In terms of individual efforts, a large number of people start a business either because they are unemployed and have no choice, or as a means of raising extra money while employed.
The reality is that often these businesses are poorly thought-out, poorly managed and have low levels of productivity and thus profitability.
To run a business, one ought to first read as much as one can on the venture in terms of strategies for growth.
Secondly, get in touch with someone who runs a similar successful business and learn tips to apply to your business.
Research on the venture to be equipped with management skills and saving strategies.
Invest in and save through saccos, investment clubs and other entities that focus on investment. Too often individuals try to invest money on their own and fail to tap entities that specialise in investment and have a system that makes better judgement calls on the best types of investment to be made.
Also, access finance from individuals and institutions. Forms of financing vary but fall into three main categories: grant, debt and equity. These are often accessed at an individual, group or company level. I will focus on grant as this is the most under-leveraged form of financing.
Grants are often viewed as free money that does not require an entrepreneurial mind-set to manage. This is a mistake many groups make; they do not view grants they receive as investment.
It is time groups focused on applying for grants focused on growing income and use them as they would a loan in order to not only embed financial discipline in the business venture, but also ensure that the business is well-thought through and meets an ongoing need.
Finally, the government has a role to play in ensuring per capita income growth through policies and strategies with an income growth objective. One key strategy is to focus on industrialisation and building value-added exports as this creates jobs. Targeted productivity efforts can lead to wage growth too.
Exporting finished goods does two things: first, it creates products that are more profitable and resilient in pricing than raw materials and secondly, exports generate more jobs in the home country.
Thus, the job of governments is to lower the cost of production and make products competitive in domestic and exports markets.
The government should focus on efforts to reduce the cost of energy, transport, and compliance to regulations.
The government also ought to encourage competition so that efficiency drives the sector and creates room for wage growth.