African Entrepreneurship: Theory and reality.
This volume results from a conference at the University of Florida in Gainesville. The conferees presented `their cutting edge research on African entrepreneurship'. The date of the conference is not given but the edges appear to have been honed some time ago, since the fieldwork data in this book date mostly from the early 1990s and in two instances from the late 1980s.
The editors in their introductory chapter, and Janet MacGaffey in a chapter on the informally conducted external trade of Zaire, cite Schumpeter's definition of entrepreneurship as innovation. Innovations in Schumpeter's theory of economic development are large, discontinuous and disequilibrating changes in economic life that provide the explanations of profit, credit, interest and the business cycle. Nothing so grand is envisaged in this book, which is much more empirical than theoretical, its subtitle notwithstanding. Where innovation is mentioned--as in McDade's own chapter on cane and rattan weavers in Ghana--it is understood as creative adaptations to changes in tastes and marketing opportunities, phenomena far short of the Schumpeterian gale of creative destruction. More generally contributors defined entrepreneurship simply as business management, including especially management of the small and `micro' businesses owned by Africans. Consequently no student of Africa will be astonished by the editorial finding that `entrepreneurship in Africa is a reality' (p. ix), and `not a missing commodity' (p. 29).
While black-owned businesses in Africa are multitudinous, relatively few grow to substantial size and continue beyond the lives of their founders. Many refuse the leap required at the first discontinuity in organization, when authority has to be delegated and an impersonal style of management adopted. Chikwendu Christian Ukaegbu's study in this volume of 20 manufacturing firms in Nigeria, shows the reluctance of owners to depersonalize control and the consequences for survival of the businesses. Genuine innovation would present a further discontinuity, assuming it to require an external source of capital, while `mere growth' is financed by retained profits and trade credit. Much is said in this book about the difficulty African businesses have in raising capital, but no connection with innovation is made. Marcel Fafchamps' study of manufacturing firms in Zimbabwe in 1993-94, shows trade credit to have been more important than bank loans for them.
In chapters by Nancy E. Horn and Mary Johnson Osirim the effects of structural adjustment policies are found negative for female `microentrepreneurs' in urban Zimbabwe. The reasons are increased competition and loss of implicit subsidies. Whether net social losses are implied might be questioned. Willem Naude approaches adjustment policies very differently, arguing that their success depends on their credibility, and that in Africa this credibility is prejudiced beyond the norm by the weakness of indigenous businesses. Because of their weakness in managerial, technical, accounting and marketing skills, these businesses are more likely to lobby for protection than to take up the challenge of competing internationally. Possible consequences of such policy involution are vividly illustrated by Robert A. Blewett and Michael Farley in a chapter on the decay of the Kenyan popular music industry. The enforced sale to Kikuyu of Asian shops retailing the products disruputed marketing networks. Import, foreign exchange and visa restrictions choked the inflow of people, ideas, technologies and music from elsewhere in Africa. By the late 1970s, Nairobi, once at the forefront of African popular music, had become a backwater.
The question whether expansion of the small enterprise sector is driven by the entry of labour unable to find alternative employments or by demand for the products of the enterprises is taken up, for Zimbabwe, by Lisa Daniels. Her conclusion is that her first hypothesis is good for `low-profit' industries and the second for `high-profit' industries (the profits here being absolute amounts, not rates). As with several of the other authors, the purpose of the analysis is to improve the design of programmes for promoting small businesses. That there ought to be such programmes is a view common to most authors in this collection, although the possibility of promoting all small businesses in any African country is surely remote, and in practice therefore only some will be favoured.
The book has been well produced. The editors in their introduction give useful summaries of the following chapters. They might have noticed a possible inconsistency between the 60 percent of households in South Africa said to be female-headed (p. 86), while in `southern Africa' the proportion is 25 to 40 percent (p. 281). One suspects that such numbers are really synonyms for `numerous'. It is also puzzling to be told that while the informal sector in South Africa contribute 20 to 30 percent of the GDP (p. 75), and the `mostly black' informal sector along with (formalised?) micro and small enterprises at least 45 percent (p. 81) `black business', on the other hand, contributes overall less than 2 percent (p. 76).
University of Birmingham
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|Article Type:||Book Review|
|Date:||Oct 1, 1998|
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