Institutional and Economic Foundation of Entrepreneurship in Africa: An Overview

Abstract

Africa is arguably the richest continent in terms of minerals and natural resources. Prior research has also found that Africa has an abundance of entrepreneurs that possess ability to identify business opportunities and to exploit them. The continent’s entrepreneurial performance, however, has been weak. Our goal in this paper is modest and is simply aimed at identifying and synthesizing the available evidence on economic and institutional factors affecting entrepreneurship in Africa. This paper also reviews various mechanisms by which foreign businesses are exploiting Africa for resources and market and examines Western response to the low level of entrepreneurial activities in Africa. Finally, this paper provides case studies of some successful entrepreneurial activities in the continent. The cases indicate that successful businesses do not necessarily have to depend on natural resources.

Keywords: Arbitrage strategies, oligarchic capitalism, formal and informal institutions, natural resources, Susu collectors

JEL Classification: F01