Introduction

Nascent entrepreneurs are the individuals that are actively participating in creating
and opening new businesses. Nascent entrepreneurship rate is the measure of how
many people or individuals are opening businesses and exploiting gaps that they
are trying to address using their businesses. Discontinuity of business means the
closure of business activities. Discontinuity of business rate is the measure of how
many businesses are being closed based on a period. This two metrics can be
compared and their impact on the African economy can be ascertained.

Nascent Entrepreneurship Rate and The Economy

There are benefits that are certainly evident by the emergence of new companies
within the African Economy. There are both social and economic problems that are
addressed by new companies being formulated. Small or medium sized businesses
or startups provide an avenue for employment. This in turn gives the businesses an
advantage as the people who are hired are locals or citizens of a country. The
government incomes from tax in this case increases. The newer businesses open
the more the government can raise revenue from such businesses. Emerging
companies also promote the surrounding community through CSR and can provide
mentorship to the surrounding upcoming entrepreneurs. Some of the benefits are
as follows:

Employment of the locals

This is one of the greatest contributions to any economy as business strive to
empower people economically which in turn improves their standards of living. The
amount of disposable income an individual has through employment means that he
can afford to live better as his or her employment status supports the living
standards.

Emergence of Services
Apart from improving an individuals standards of living local companies will tend to
ensure that their environment is approachable. This creates an attractive sight for
investors. Bank branches can be opened as the business area expands. Recreational
facilities such as theatres can emerge. It fosters an avenue where businesses can
thrive. The more the investment the better the environment. Companies can go as
far as ensuring that the transport networks are enhanced to facilitate access to the
companies.

Tax
Businesses pay taxes as required by law in countries. In developing countries, taxes
are used to improve the countries position in terms of economic wealth. Income tax
can be used to enhance social amenities, maintain roads, build schools, and

improving the other services that are offered by the government in the best interest
of the citizens.

Political Benefits
As more companies emerge within a country they can have influence and can also
mediate on behalf of the surrounding communities regarding issues that affect them
both directly and indirectly. They can hold functions or sponsor events such as trade
forums or community wide platforms that allows aspiring and current leader to
address the community. They can lobby on behalf of the community member to see
project through and generate awareness about issues the community faces.

Customer Loyalty
Companies that emerge tend to focus on the establishing a rapport with the
surrounding community. This means that locals will often tend to buy the products
that are locally available. This is evident especially if the services that the
companies offer does not face stiff and unfair competition from bigger foreign
companies.

Discontinuation of Business Rate and The Economy

Discontinuation of business rate is the rate at which companies close. This can be
attributed to factors that companies face over a period. Some of this factors
include:

Economic fluctuations
This are conditions that are beyond the scope of a business. If a country faces or is
affected by recession or what is referred to as a slump or depression, company
operations can directly be affected. Some businesses can be affected more than
others. Items that are durable tend to last for a long time. This means that
customers will wait for a certain period before they replace a certain product. Goods
that last for more than three years can be deemed as durable. Companies can be
affected as the costs rise to less manageable levels.

Losses/ Minimal profits

When the operating costs are high and the cash flow is not enough to sustain the
business, companies will tend to make losses. Companies can also make minimal
profits that can be considered insignificant. Businesses may face problem paying
existing loans and have trouble maintain personnel. Owners of the company receive
less personal revenue thus the relevance of the business is reduced. Inevitably the
companies may close in such times.

Insufficient Resources
Resources tend to be scarce in nature. There are acceptable limits that a company
can tolerate. When resource become unavailable to the point that a company

cannot produce the adequate products or services, the owners may be forced to
close. The definition of resources is broad. It may involve labor, land, and capital.

Stiff Competition
Companies that can come as new entrants in the market with a vast amount of
resources at their disposal can subject smaller companies to pressure and in turn
lead to their closure. Larger companies tend to have economies of scale thus they
can maximize costs and minimize profits much more easily than smaller companies.
Larger companies can sell their products at cheaper price than other smaller
companies. This means that if the smaller companies cannot sell their products they
will be force to close.

Startup Failure
In Africa startups are also failing because most of them are focused on the
replication of western products without the effort to sufficiently innovate or even
tailor them for this market (African)

Governments and Businesses

Governments can give incentives to encourage business to thrive within the
country. This can go a long way in ensuring that the social amenities and the
employment levels are kept at per. The Government should promote innovation and
appreciate ideas that are deemed as worthy by providing grants and awards to the
best startups and most consistent companies. Businesses should merge to support
other upcoming businesses. They should encourage healthy competition and
promote diversification of the products and services that they offer. This will ensure
that there are contingencies in place in case a product or service faces issues. This
ensure that there is security against stiff competition and provides a fall back
mechanism in the case of other factors that may affect the companies negatively.

Conclusion
It is important to note that the ratio between discontinuity of business rate and the
nascent entrepreneurship rate affects the economy. It is better to have more
companies not only starting or emerging but also growing. It is also important to
note that the if the rate at which companies are closing is higher than the economy
is bound to face a negative impact. If the nascent rate is higher the economy within
the African setting will have a positive impact not only in the communities but the
business.