Entrepreneurship in Africa

Context and Perspectives

Ven Sriram, David Lingelbach, Tigineh Mersha, Franklyn Manu

• Publisher: Routledge
• Year: 2020
• eBook ISBN: 9780429688591
• Topic: Business
• Subtopic: Business General
• Index: Business

It is now widely recognized that in regions like Africa, for economic and other reasons, the public sector has had to disengage and divest from many areas of the economy and allow private enterprise, especially scalable start-ups and new ventures, to enter and flourish if economic development and employment are to grow. There is, however, a training and education gap since entrepreneurship is rarely taught formally at African universities and, when it is, it is often approached from a Western perspective which may not be appropriate given that African environments are significantly different from most Western ones in terms of economic infrastructure and political considerations.

This book allows readers to understand the African entrepreneurial context by guiding them through the principal stages in the life of a new venture, and offers approaches, both Western and indigenous, that can inform their entrepreneurial actions. It concludes by examining some specialized topics, including female, youth, and social entrepreneurship, as well as real estate and technology. Exercises throughout the book will enable readers to evaluate their motivations and preparedness for entrepreneurship and learn how to communicate a new venture's key features to potential stakeholders.

By focusing on the distinctive features of entrepreneurship in the African context, and taking a conversational tone, this is an informative and practical text that will be useful for students of Global Entrepreneurship and Business as well as actual and prospective entrepreneurs in the private, non-profit, and public sectors.

Part I

The basics

1The African environment for entrepreneurship

Learning objectives: upon completing this chapter you will:

• Gain knowledge of the nature of African entrepreneurial ventures
• Understand the diversity and commonality that characterize African countries
• See the importance of context and how it shapes entrepreneurial behavior
• Be able to identify the macro-environmental challenges that African entrepreneurs face
• Develop an ability to analyze the macro-environment and assess potential impacts on entrepreneurial activity

A history of entrepreneurship in Africa

Entrepreneurship has existed since humans engaged in market exchange activity with one another (fancy words for buying and selling). The earliest observed entrepreneurship anywhere in the world took place in New Guinea around 17,000 BCE, when obsidian was exchanged for tools, skins, and food. Such entrepreneurship in hunter-gatherer societies was probably common, although evidence of it remains limited.

Entrepreneurship expanded greatly with the agricultural revolution. On the African continent, market activity began with the rise of agriculture in the then-fertile Saharan Desert. Agricultural surpluses allowed Africans, who possessed them, to trade with other Africans and further afield, initially with Southwest Asia. All of this began between 10,000 BCE and 8000 BCE.

The next phase in African entrepreneurship began with the expansion of international trading routes, which accelerated after 2000 BCE. Such trade initially involved North Africa, which became linked through Egypt and the Phoenicians with Greece, India, China, and the Arabian Peninsula. Trade within Africa was facilitated by entrepreneurs crossing the Sahara, and by Nubia (located in contemporary Sudan) and its linkages with Chad and Libya. Traders on Africa’s east coast also plied international routes – Swahili entrepreneurs linked the continent with China and India.

During the same period, entrepreneurship became a significant phenomenon in the ancient world.

Then came slavery, initially as an internal affair, but then increasingly linked by European entrepreneurs with the Americas. Sad to say but true, entrepreneurship and slavery were closely linked. Each slave ship could be seen as a new venture. Many slavers came from Great Britain and the United States, but were supported by Africans who captured and then sold slaves to foreign slavers.

Entrepreneurship in Africa is also closely linked to colonialism. Many significant ventures arose out of colonial efforts. King Leopold II’s Congo Free State, which extracted ivory, rubber, and minerals at the cost of great human suffering and loss of life from 1885 to 1908 in the territory, is occupied today by the Democratic Republic of the Congo (DRC). In 1888, Cecil Rhodes established De Beers, which continues to be a major diamond mining and trading concern to this day. Both Leopold II and Rhodes are examples of a particular type of entrepreneur – the actor at the wealth-power nexus who uses wealth or power to gain the other. These examples also point out that, contrary to the breathless cheerleading of so many of entrepreneurship’s proponents, entrepreneurship is not always a positive thing.

In postcolonial Africa, entrepreneurship has been a tale of two cities. One city is occupied by the rich, powerful, and connected entrepreneurs who have reaped most of the benefits of startup activity. The other city is lived in by the ordinary entrepreneurs, often motivated less by ambition and more by necessity to scrape out an existence in the absence of stable employment opportunities. In between are a few tech entrepreneurs who have adapted technologies from elsewhere to African conditions or used the distinctive local conditions and problems to generate interesting new products that have been exported elsewhere, such as M-Pesa mobile money. As and when institutional conditions improve and income levels rise, entrepreneurs in Africa can be expected to develop new products and firms that we can only imagine today.

Scope and types of enterprises

African entrepreneurial ventures are characterized by several common features even though there is a wide variety of them. Ninety percent of them...

Table of contents

• Cover
• Half Title
• Series
• Title
• Copyright
• Dedication
• Contents
• List of figures
• List of tables
• List of contributors
• About the authors
• Preface
• Acknowledgments
• PART I The basics
• PART II Birth
• PART III Growth
• PART IV Maturity
• PART V Special topics on African entrepreneurship
• Index