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WJEMSD
9,2/3
Entrepreneurship development
in Africa: an overview
Allam Ahmed
Middle Eastern Knowledge Economy Institute (MEKEI),
82 Brighton Business School, Brighton, UK and
SPRU – Science and Technology Policy, School of Business,
Economics and Management, University of Brighton, Brighton, UK and
University of Sussex, Brighton, UK, and
Sonny Nwankwo
Royal Docks Business School, University of East London, London, UK

Abstract
Purpose – This paper aims to provide an over view of the different key factors that are influencing
and influenced by the entrepreneurship environment in Africa.
Design/methodology/approach – The paper represents the outcome of many comprehensive
research programmes undertaken in different countries in Africa and other parts of the world adopting
various research methods and approaches.
Findings – The most profound and encouraging change in African economies over the past decade
has been the rapid advancement towards integration into the global economy. Many of the countries
have undertaken significant economic reforms; improving macroeconomic management, instigating
conducive private investment climate, liberalizing markets and widening the space for entrepreneurship
to drive strong and inclusive growth. However understanding the nature of problems, challenges and
opportunities in Africa is a very difficult task for many people outside its territories.
Originality/value – Despite the regional coverage of the various issues relating to entrepreneurship
development on Africa, it is not possible to have contributions from few countries in the region such as
Chad, Somalia, etc., due to the current situation is these countries.
Keywords Entrepreneurship, Africa, Sustainable development, Sub Saharan Africa,
Entrepreneurialism
Paper type Research paper

Introduction
The tumultuous macroeconomic, social and political reforms which nearly all African
countries embarked upon during the past three decades have not delivered the desired
outcomes when measured against the principal indices for sustainable development
(see e.g. economic report United Nations Economic Commission for Africa (UNECA),
2008, 2009). Progress towards the attainment of the Millennium Development Goals
(MDG) has been patchy and less than robust. Most of the counties have continued to
backslide in the grandiose ideals espoused in their respective national development
plans and forward-planning vision statements aimed at propelling their economies
from the margin to the mainstream global economy.
Essentially, Africa represents one of the world’s most intractable development
challenges, with its peculiar and seemingly insurmountable environmental inhibitors,
World Journal of Entrepreneurship,
Management and Sustainable ranging from very high transportation costs, small markets, low agricultural productivity,
Development
Vol. 9 No. 2/3, 2013
very high disease incidences, environmental despoliation, adverse geopolitics and very
pp. 82-86 slow diffusion of strategic technology from abroad. Not too long ago, the United Nations
r Emerald Group Publishing Limited
2042-5961
Industrial Development Organization (UNIDO, 2003) observed that people in Africa living
DOI 10.1108/WJEMSD-06-2013-0033 in absolute poverty (earning less than $1 a day) rose from 42 to 47 per cent between 1981
and 2001, while absolute poverty dropped from 40 to 21 per cent in the world as a whole. Entrepreneurship
According to Collier (2006), “Africa is currently a fragile mess”. This view has nothing to development in
do with pilloried Afro-pessimisms in the literature but very much in line with the vast
body of literature that attempted to make sense of socio-economic situations in Africa
contemporary African nations. Over the post 30 years, Collier summarises, per capita
income has stagnated at a very low level during an unprecedented period of growth in
other developing regions. Given the pervasive forces of economic globalisation sweeping 83
across the world, there is little chance for Africa to offer hope for its teeming population if
it continues to diverge from the rest of the world. The sheer scale of the problem recently
attracted the attention of the Institute of Economic Affairs, culminating in the publication
of a special, Africa-themed, edition of their journal which focused Africa’s development
quagmires. The title of the publication, Africa Left Behind, snugly encapsulates Africa’s
unfurling reality (Economic Affairs, 2006).
There is no suggestion that Africa has cocooned itself away from the rest of the world.
In fact, many countries have opened up their economies, implemented political and
market reforms, and undertaken variants of structural reforms to foster and sustain
market responsiveness with the concomitant goal of improving the over-all well-being of
their people. Paradoxically, the outcomes have been less salubrious to growth and
development; expected foreign direct investment inflows intended to provide a dynamic
source of growth dissipated even before the current onslaught of global economic
recession – with debilitating impacts on MDGs attainment and sustainable development
(SD). In today’s dynamically discontinuous economic scenarios and unpredictable global
environment, Africa is confronted with new challenges and opportunities.
In the particular case of Sub-Saharan Africa (SSA) that has experienced the most
persistent of poverty indices, a uniquely sub-regionally tailored, home grown,
initiatives that are not only practical but sustainable would be required to achieve the
desired turnaround. This entails bringing forward appropriate policies and initiatives
to provide jobs or, at least, self-employment; jobs that would hopefully remain in the
areas where they were created as they grow; and will enable export of goods and
services outside the community, thereby generating much-needed income and revenue
for enhanced social cohesion and community sustainability. Based on a synthesis of
policy prescriptions for a renascent Africa, it has become clear that solutions to
extreme poverty in Africa will have to come from Africans themselves – a key point
underscored in former British Prime Minister Tony Blair’s Commission for Africa
Report (2005). Acceptably, Africa is not in want of policy prescriptions; problems often
arise from implementation failures. But, the point needs to be made that Africa is not
poor because the people are poor. Over the years, contemporary works by thinkers
such as P.T. Bauer and William Easterly (e.g. From Subsistence to Exchange and The
White Man’s Burden) have demonstrated that indigenous entrepreneurship is a sure
foundation for development. The logic is simple; Africans, through progressive
indigenous social change efforts, could bring about enterprise-led institutional change
which, in turn, could foster the evolution of rules of social cooperation and thus realize
the immense gains from trade through entrepreneurial activities (Boettke, 2007).
Studies have also shown that the rapid growth in output in the BRIC economies (Brazil,
Russia India, China) and other emergent Asian Tigers have been driven more by
entrepreneurial zeal and government-supported SME initiatives. Additionally, the
literature is replete with evidence indicating that the diminished ability of African
nations and, indeed, many third world countries, to register real increases in
employment, especially following their privatisation and deregulation initiatives of the
WJEMSD 1980s and the attendant massive corruption of the process implementation, means that
9,2/3 the only way out for the generality of the employable masses in these countries is
through private entrepreneurial initiatives.
It is obvious that what stunts entrepreneurial activities in Africa are legion, but
rank differently in their criticality and priority levels; some more so audacious than
others. They rank, in no particular order, from stultifying environment for micro
84 entrepreneurship (which engages the bulk of the rural masses), poor access to credit in
rural communities, sorry state of education and support infrastructure. To the extent
that support infrastructure can never be adequate and may be insufficiently available
and manageable in their relativity, the critical requirements revolve around two basic
components: credit availability and educational programmes, geared towards
stimulating entrepreneurship. The real surprise, if not disappointment, is that a
continent with such dire human development indices (HDI), unemployment and larger-
than-proportionate absolute poverty population compositions have been slow at
evolving fundamental changes to their micro- and macro-economic policies in order to
accommodate the genuine needs of their indigenous entrepreneurs.
Perhaps, more relevant in the conceptual articulation of enterprise solution to
sustainable development presupposes a thinking not particularly grounded in the
orthodox understanding of the role of government or the market in enterprise
promotion and development. Rather, a new approach might contemplate a dynamic
process that seeks the resolution of myriads of market and socio-economic problems,
including poverty and unemployment, from “community”, social entrepreneurial ethos,
embedded in individual initiative, originality of ideas and creativity perspective, but
also benefiting from enabling institutional support infrastructure. It follows that
sustainable development in the rather belated realisation of the MDGs in Africa must
rearticulate individual, group and community enablements, perhaps within the context
of social entrepreneurialism.
The overarching goal is to apply enterprise-led initiatives in the creation of a new crop
of entrepreneurs, who are unburdened by institutionalised/structured governmental
impediments but empowered by new and improved support systems that not only
recognise their peculiar handicaps, but also provide functional remedial alternatives.
Harnessing enterprise solutions in the alleviation of poverty and maintenance of
sustainable development in Africa will be greatly enhanced with a particular focus on
women entrepreneurs, especially given the spectacular success of their entrepreneurial
activities and the fact that they constitute the majority of the population in these countries.
Although Islam (2009) contends that women face huge challenges in four key areas: access
to finance/capital, technical and commercial support, capacity building and marketing in
terms of paradigmatic changes brought about, for example, by e-commerce and various
technological innovations, the meaningful engagement of this entrepreneurial mass would
greatly accelerate rural development. Unfortunately, even countries such as Kenya and
Uganda, where there has been significant women entrepreneurial participation, are still
gravely handicapped by education and managerial support. For example, in Uganda,
according to the United Nations Economic Commission for Africa (UNECA, 2008) report,
rural women lack training and advisory services on managerial and technical skills to
solve production problems. As a result, more than 70 per cent of enterprises are micro- and
small-enterprises, but their growth, competitiveness and sustainability are greatly
challenged by lack of managerial aptitudes, marketing and technical skills, in addition to
overall inadequate or non-existent infrastructure and complicated legal frameworks for
business processes (see also UNIDO, 2003).
 To think of entrepreneurship in terms of a solutions applicator to the varied and multi- Entrepreneurship
faceted market and development challenges of African nations must entail a conceptual development in
understanding and re-evaluation of the underlying shortcomings in national planning
policies. These significantly include educational, fiscal and monetary policies. Rural Africa
development initiatives involving the provision of reliable power supply, water, accessible
roads and functional telecommunications, must be a component of this process. Indeed,
this exercise is collaterally geared towards a more realistic realisation of both the 85
ECOWAS and NEPAD initiatives (which are languishing because of lack of institutional
support and coordination among member countries for a robust development of the rural
sub-regions). It will induce domino effects of market and factor movements, inter- and
intra-regional collaborative ventures to scale-up achievements in regard of the MDGs.
Enterprise solutions to sustainable development must embody within it both the
provisions of basic support infrastructure and mechanisms for expanding the markets,
both within and across the continent of Africa.

Conclusion
The most profound and encouraging change in African economies over the past decade
has been the rapid advancement towards integration into the global economy. Many of the
countries have undertaken significant economic reforms; improving macroeconomic
management, instigating conducive private investment climate, liberalising markets and
widening the space for entrepreneurship to drive strong and inclusive growth. Concurrent
with institutional reforms are policies to improve the conditions for enterprise to thrive
and provide a dynamic source of growth. By and large, African economies are opening up
and beginning to respond to genuine market signals.
The significance of the changes taking place in Africa to promote entrepreneurship
as a force for development cannot be underestimated. There is much at stake in
continuing this process of scaling up entrepreneurship as a dynamic process towards
sustainable economic development. For countries in this region, higher growth rates
translate into greater economic opportunities. For the industrialised world, it means
expanded markets, stronger trading partners, and a more stable international system.
There is still a lot to learn about how African countries are applying “enterprise
solutions” to the problems of economic deprivations. There is little doubt that success in
entrepreneurship is crucially important in heralding the much expected economic
renaissance of Africa – ensuring economic transition from the margin to the mainstream
global economy. The reality, however, is that the essential characters of entrepreneurial
landscapes in many Africa nations are profoundly changing in ways that require new
modes of thought, analysis, and explanation. Accordingly, this book offers cutting-edge
contributions aimed at unpacking the paradoxes of entrepreneurship in African contexts;
patterns and growth trajectories, development impacts, networks, institutions and
identities, challenges, and changing contexts and prospects.

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Corresponding author
Allam Ahmed can be contacted at: allam@sussex.ac.uk

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