M10 million ‘war chest’ to help youths

MASERU – THE government is pumping M10 million into the Business Plan Competition (BPC) that will benefit 100 youth and women entrepreneurs. This follows a successful trial project launched in 2019 as part of efforts to encourage entrepreneurship and tackle youth unemployment which is estimated to be over 30 percent. The pilot project has since helped build 10 thriving businesses that have created nearly 30 jobs for youths and women. Each of the ten winners received M100 000 in prize money which came with training and incubation services to hand-hold the entrepreneurs through the initial stages of their businesses. The government is now building on that success to scale up the competition to develop more businesses. Plans are afoot to launch the next phase of the competition in which fifty (50) Basotho entrepreneurs will win M100 000 each. Another 50 will benefit in 2022 to bring the number of beneficiaries to 100 and the total outlay to M10 million over two years. The competition is managed by the Basotho Enterprise Development Corporation (BEDCO) and funded by the African Development Bank (AfDB) through the government’s Economic Diversification Support Project (EDSP). The programme is meant to assist budding entrepreneurs who have viable business ideas but lack funding. It focuses on providing access to finance, business development services, technical assistance and mentorship. Although lack of capital remains one of the biggest hurdles to starting a business, research shows that access to finance alone does not guarantee success. Every year start-ups with adequate financial backing collapse because owners, who are usually the business managers, lack the right management skills to make them sustainable and viable. The BPC competition seeks to address that knowledge gap by allocating a portion of the prize money for training, incubation and mentorship of the winners. Chaba Mokuku, project manager of the EDSP, says the BPC will unlock the potential of young and women entrepreneurs. “Youth unemployment is a ticking time bomb which can only be diffused by developing more entrepreneurs to create jobs,” Mokuku said. “The plan now is to bring more private sector institutions to help the youth and women build businesses and create employment,” Mokuku says. He says the competition is also crucial to efforts to revive the economy after the Covid-19 pandemic which has led to the collapse of many businesses. “We have to invest in our youth and women if we want to create a sustainable future.” He says the initial trial of BPC revealed that Basotho women “have great business ideas but need a helping hand in terms of funding and training”. Women were 70 percent of the top ten. Four of the winners were businesses that manufacture clothing, chemicals, candy and personal products. The other four are agribusinesses specialising in poultry, vegetable seedlings, dairy and eggs. Two are in education and renewable energy. Mokuku says these sectors are all focus areas of the National Strategic Development Plan (NSDP) II. “We are looking at diversifying the economy to create jobs, alleviate hunger, empower the vulnerable groups and grow the economy.” The average age of the previous winners was 31 years, which is in line with the BPC’s target. The top ten also revealed that there is a strong entrepreneurship spirit across the country with winners coming from Leribe (3), Quthing (1), Berea (1), Maseru (4) and Mafeteng (1). Hape Marite, 32, whose cosmetic company, BlackHair, was one of the inaugural winners, says winners should look beyond the prize money. “This is a total package. There is the funding to either start or grow your business. Then there is the training and the incubation which I consider crucial to any start-up,” Marite says. “The incubation gives you that external eye that brings a new perspective to the business.” Marite says she used her prize money to buy new equipment to boost her production. “We have accelerated our production because we have moved from a 4-litre mixer to a 30-litre mixer.” The incubator is helping the hair product company to set up procurement, operations and quality assurance systems. BlackHair products are sold in several retail shops in Lesotho. The company also has an independent distributor in Cape Town and Polokwane. “I believe the competition is crucial to every young entrepreneur who wants to learn to accelerate their business,” Marite says. Business Reporter