Business
East Africa the cheapest region to launch a StartUp – Savannah Fund
By Gabriella Mulligan
East Africa offers the lowest infrastructure, human resources and administrative costs for entrepreneurs while South Africa is the most expensive country in Africa in which to launch a startup, according to research by venture capital group Savannah Fund.
In a survey spanning 6 key countries across Africa, Savannah Fund compared the first year costs of startups, including costs of accommodation and office space, web hosting and Internet, the cost of hiring entry level and experienced engineers, and a range of administrative costs such as legal, accounting, sales, business permits, and travel.
The fund found overall first year costs to be the highest in South Africa, with average total costs weighing in at over US$70,000.
Costs in Uganda and Kenya proved the lowest overall, with average total costs of slightly under US$30,000 in Uganda, and US$35,000 in Kenya.
Nigerian entrepreneurs are subject to mid-level average costs, at below US$40,000, while Ghana and Tanzania have higher overall costs, at US$55,000 and US$50,000 respectively.
Across all countries surveyed, the cost of hiring an engineer with between 3 and 5 years experience proved the largest single outgoing, and in this regard South Africa was again most expensive, with East African engineers demanding the lowest costs.
In South Africa, an engineer with 3 to 5 years experience comes at a cost of over US$45,000 per year, while the salaries paid to entry level college engineers are also the highest in South Africa at over US$17,000.
