Role, Benefits and Challenges of an Entrepreneur
Senior 2 · Entrepreneurship
Role, Benefits and Challenges of an Entrepreneur
Lesson 1 of 3
22 min
In 1999, coffee growers around Maraba, in today’s Huye District, had a problem. Their beans were not washed and sorted quickly enough after picking, so buyers graded them below grade C and paid about US$0.33 a kilogram. At that price, coffee kept families poor.
That year, 220 growers formed an association and named it Abahuzamugambi, meaning “people who work together towards one goal”. In 2001 they built a washing station. In 2002 an American roaster bought a whole container of their coffee, 18,000 kg, at US$3 a kilogram. By 2012 the cooperative had about 1,400 growers and assets of 250 million Frw.
Nobody in that story is a millionaire with a factory. They are ordinary farmers who spotted an opportunity, organised resources and took a risk together. That is entrepreneurship, and this lesson shows how activity like theirs develops a whole community and a country.
Economic development is a lasting rise in what a community or country produces and earns: more jobs, higher incomes, more goods and services, more exports. Social development is a lasting improvement in people’s well-being: health, education, skills, housing, equality and the way people live together. Socio-economic development means both at once. The two feed each other: a family with a higher income can pay school fees, and a better-educated worker can earn more.
This case is written by Ganzaa. A cassava cooperative in Ruhango buys 2,000 kg of fresh cassava a week from local farmers at 150 Frw per kg. It dries and mills the cassava into 700 kg of flour and sells the flour at 800 Frw per kg. It employs 5 workers at 15,000 Frw a week each. Find the money each group receives and the value added by processing.
Notice that one business touched three groups: farmers, workers and the government. That is why entrepreneurs are called the engine of development.
Tip
Exam technique. For “explain the role of entrepreneurs”, use Point, Explain, Example: name the role, say how it happens, and attach a Rwandan example. “Entrepreneurs create jobs” earns little; “a coffee washing station employs sorters and technicians who had no paid work before” earns full marks. To sort economic from social roles, ask: is it about money and production (economic) or about people’s well-being (social)?
Solution: (a) economic, employment; (b) social, skills and training; (c) economic, foreign exchange; (d) social, a community facility.
Solution: Raw material = 400 × 300 = 120,000 Frw. Output = 500 × 900 = 450,000 Frw. Value added = 450,000 − 120,000 = 330,000 Frw.
Solution: At US$3: 18,000 × 3 = US$54,000. At US$0.33: 18,000 × 0.33 = US$5,940. Difference = 54,000 − 5,940 = US$48,060.
Solution: The money stays with a Rwandan business and its workers, so it creates local jobs and income. The country also spends less foreign currency on imports, which it can use for things it cannot make, such as fuel.
Summary
Sources and credits
The cassava cooperative case, the worked example and the practice items are written by Ganzaa.
This lesson adapts CC BY-SA material and is shared under CC BY-SA 4.0.
