Abstract
In Sub-Saharan Africa, the majority of businesses operate in the form of a small and medium-sized enterprise (SME). SMEs play a significant role in the economic development of many nations. This chapter considers the business environment and entrepreneurship activities in the Sub-Saharan countries of Nigeria, Kenya, Senegal, South Sudan and Tanzania. The review of literature explores issues such as doing business in Africa, size and informality, start-up survival and closure, the determinants of growth and gender issues in African entrepreneurship. Using data from the World Bank Enterprise Surveys, it reflects on the factors affecting investment and productivity in Africa as follows: education of the labour force, access to infrastructure, access to finance, size of firms and other business climate variables. Finally, using data from the aforementioned survey, this chapter draws pertinent conclusions on the business environment of the region in focus.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsReferences
African Economic Outlook. (2012). Nigeria. Retrieved from http://www.africaneconomicoutlook.org/en/countries/west-africa/Nigeria.
African Economic Outlook. (2017). Nigeria Economic Outlook. African Development Bank Group. Retrieved from https://www.afdb.org/en/countries/west-africa/nigeria/nigeria-economic-outlook/.
Agwu, M. O., & Emeti, C. I. (2014). Issues, challenges and prospects of small and medium scale enterprises (SMEs) in Port-Harcourt City, Nigeria. European Journal of Sustainable Development, 3(1), 101–114. https://doi.org/10.14207/ejsd.2014.v3n1p101.
Ahmed, N., & Hoffman, A. (2007). A framework for addressing and measuring entrepreneurship indicators, Steering Committee, OECD, Paris, 20 November 2007, In: Kshetri, N. (2011), Institutional and economic foundations of entrepreneurship in Africa: An overview. Journal of Development Entrepreneurship, 16(1), 9–35.
Aikaeli, J. (2010). Determinants of rural income in Tanzania. “An Empirical Approach” Research on Poverty Alleviation REPOA, 10/4.
Aremu, M. A., & Adeyemi, S. A. (2011). Small and medium scale enterprises as a survival strategy for employment generation in Nigeria. Journal of Sustainable Development, 4(1), 200–2006.
Ariyo, A., Lee, J., & McCalman, D. (2015). Entrepreneurship in India. The Challenges ahead. Journal of International Business Disciplines, 10(1), 1–17.
Arrow, K. J. (1962). The economic implications of learning by doing. Review of Economic Studies, 29, 155–173.
Atérido, R., Hallward-Driemeier, M., & Pages, V. (2011). Big constraints to small firms’ growth? Business environment and employment growth across firms. Economic Development and Cultural Change, 59(3), 609–647.
Ayogu, M. (2007). Infrastructure and Economic Development in Africa. Journal of African Economics, 16(1), 75–126.
Benzing, C., & Chu, H. M. (2009). A comparison of the motivation of small business owners in Africa. Journal of Small Business and Enterprise Development, 16(1), 60–77.
Central Bank of Nigeria. (2005, December). Microfinance policy, regulatory and supervisory framework for Nigeria. CBN.
Calvo, J. (2006). Testing Gibrat’s law for small, young and innovating firms. Journal of Small Business Economics, 26(5), 117–123.
Caves, R. E. (1998). Industrial organization and new findings on the turnover and mobility of firms. Journal of Economic Literature, 36(4), 1947–1982.
Centre for Development and Enterprise (CDE). (2012, November). Informing South Africa Policy. Coping With Unemployment.
Cervantes-Godoy, D., & Dewbre, J. (2010). Economic importance of agriculture for poverty reduction. Food, Agriculture and Fisheries Working Papers, No. 23, OECD Publishing. https://doi.org/10.1787/5kmmv9s20944-en
Christiaensen, L., & Todo, Y. (2008). Poverty reduction during the rural-urban transformation—The role of the missing middle. Contributed Paper prepared for presentation at the International Association of Agricultural Economists’ 2009 Conference, Beijing, China, August 16–22. 2009. Retrieved from http://ageconsearch.umn.edu/bitstream/51467/2/The%20ru%20transformation%20IAEE%20Luc%20and%20Yasu%20June%202009.pdf.
Coad, A. (2014). Firm age and growth persistence, innovation forum VI-2014. Crisis, Innovation and Transition, 1–3 October 2014, University of Paris Ouest, Nanterre, La Defense.
Coad, A., & Hölzl, W. (2009). On the autocorrelation of growth rates evidence for micro, small and large firms from the Austrian Service Industries, 1975–2004. Journal of Industry Competition and Trade, 9, 139–166.
Coad, A., & Rao, R. (2008). Innovation and firm growth in high-tech sectors: A quantile regression approach. Research Policy, 37(4), 633–648.
Collier, P., & Gunning, J. W. (1999). Explaining African economic performance. Journal of Economic Literature, 37(1), 64–111.
DFID. (2011). Economic growth and private sector, Department for International Development. Retrieved from http://www.dfid.gov.uk/what-we-do/key-issues/Economic-growth-and-the-private-sector/Growth/.
DFID. (2012). Department for International Development. Growth Research News, December 2012.
Dorosh, P., Wang H., You, L., & Schmidt, E. (2010). Crop production and road connectivity in Sub-Saharan Africa: A spatial analysis. The World Bank (2010) Policy Research Working Paper.
Dorward, A., Shengen, F., & Kydd, J. (2004). Rethinking agricultural policy for pro-poor growth. Natural Resources Perspective (ODI), pp. 1–4.
Dunne, P., & Hughes, A. (1994). Age, size, growth and survival: UK companies in the 1980s. Journal of Industrial Economics, 42(2), 115–140.
Estache, A., Foster, V., & Woden, Q. (2002). Accounting for Poverty in Infrastructure Reform: Learning from Latin America’s Experience. WBI Development Studies. Washington, DC: The World Bank.
European Union. (2007). Definition of micro, small and medium-sized enterprises. European Union, Brussels. Retrieved from http://europa.eu/legislation_summaries/enterprise/business_environment/n26026_en.htm.
Fabusoro, E., Omotayo, A. M., Apantaku, S. O., & Okuneye, P. A. (2010). Forms and determinants of rural livelihoods diversification in Ogun state, Nigeria. Journal of Sustainable Agriculture, 34(4), 417–438.
Faleye, O. A. (2013). Religious corruption: A dilemma of the Nigerian state, Journal of Sustainable Development in Africa, 15(1).
GEM. (2014). Africa’s young entrepreneurs: Unlocking the potential for a better future. Retrieved from https://www.idrc.ca/sites/default/files/sp/Documents%20EN/Africas-Young-Entrepreneurs-Unlocking-the-Potential-for-a-Brighter-Future.pdf, last visited 21st March 2018.
Goddard, J., Wilson, J., & Blandon, P. (2002). Panel tests of Gibrat’s law for Japanese manufacturing. International Journal of Industrial Organization, 20(3), 415–433, 2002.
Goedhuys, M., & Sleuwaegen, L. (2010). High-growth entrepreneurial firms in Africa: A quantile regression approach. Journal of Small Business Economics, 34, 31–51.
Haltiwanger, J., Jarmin, R. S., & Miranda, J. (2013). Who creates jobs? Small versus Large versus Young. Review of Economics and Statistics, 95(2), 347–361.
Herrera, S., & Kouamé, W. (2017, July). Productivity in the non-oil sector in Nigeria: Firm-level evidence. Policy Research Working Paper, 8145. Macroeconomics and Fiscal Management Global Practice Group, The World Bank Group.
Iakovleva, T., Kolvereid, L., & Stephen, U. (2011). Entrepreneurial intentions in developing and developed countries. Education and Training, 53(5), 355–370.
IFAD. (2009). Rural enterprise and poverty reduction. Asia and the Pacific Division, International Fund for Agricultural Development.
IFAD. (2011, January 24–25). Non-farm opportunities from smallholder agriculture, conference on new directions for smallholder agriculture. Rome, IFAD HQ Retrieved from http://www.ifad.org/events/agriculture/doc/papers/non-farm.pdf.
IFAD. (2012, April). Promoting rural enterprise growth and development: Lessons from four projects in sub-Saharan Africa: Enabling poor rural people to overcome poverty, p. 7
Igwe, P. (2016, December). Entrepreneurial ecosystems & the role of government in promoting entrepreneurship; Book Chapter in the Festschrift Textbook on Building Entrepreneurial Universities in a Developing Economy, Issues, Challenges and Prospects.
Igwe, P., & Icha-Ituma, A. (2016a). Fostering Scale-up and ecosystem for entrepreneurship growth in Sub-Saharan Africa. Global Journal of Business and Management, 1(1), 108–123.
Igwe, P., & Icha-Ituma, A. (2016b). Financial and Social Capital sustainability approach to rural livelihood in the Sub-Saharan African economy. Global Journal of Business and Management, 1(1), 68–90.
Igwe, P., Newbery, R., & Icha-Ituma, A. (2017). Entrepreneurship challenges and gender issues in the African informal rural economy. In V. Ratten, C. Marques, & V. Braga (Eds.), Knowledge, learning and innovation. Research insights into cross sector collaboration. New York: Springer.
ILO. (2014). Transitioning from the informal to the formal economy, International Labour Conference 103rd Session 2014, Report V (1). International Labour Office, Geneva.
Jamali, D. (2009). Constraints and opportunities facing women entrepreneurs in developing countries, a relative perspective, Gender in Management. An International Journal, 24(4), 232–251.
Jones, P. (2017). Entrepreneurship in Africa: Exploring entrepreneurial behaviour and small business practice within emerging contexts, Special issue call for papers. Journal of Small Business and Enterprise Development.
Keeper, D. G. (2012). “Systemic corruption in Nigeria: A threat to sustainable development”. Proceedings of the 1st International Technology, Education, Environment Conference. A Journal of African Society for Scientific Research (ASSR), 1(1), 172–179.
Kandker, S. R., & Koolwall, G. B. (2010). How infrastructure and financial institutions affect rural income and poverty: Evidence from Bangladesh. Journal of Development Studies, 46(6), 1109–1129.
Klapper, L., Laeven, L., & Rajan, R. (2007). Entry regulation as a barrier to entrepreneurship. Journal of Financial Economics, 83(3), 591–629.
Khavul, S., Bruton, G., & Wood, E. (2009). Informal family business in Africa. Entrepreneurship Theory and Practice, 33(6), 1217–1236.
Krishma, A., & Shariff, A. (2011). The irrelevance of national strategies? Rural poverty dynamics in states and regions of India, 1993–2005. World Development, 39(4), 533–549.
Kshetri, N. (2011). Institutional and economic foundations of entrepreneurship in Africa: An overview. Journal of Development Entrepreneurship, 16(1), 9–35.
La Porta, R., & Shleifer, A. (2014). Informality and Development. Journal of Economic Perspectives, 28(3), 109–126.
Liedholm, C. (2001). Small firm dynamics: Evidence from Africa and Latin America. World Bank.
Liedholm, C., & Mead, D. C. (1999). Small enterprises and economic development: The dynamics of micro and small enterprises. London and New York: Routledge.
Nafukho, F., & Muyia, M. A. H. (2010). Entrepreneurship and socioeconomic development in Africa: A reality or myth. Journal of European Industrial Training, 34(2), 96–109, 2010.
NEPAD. (2002). NEPAD short-term action plan: Infrastructure. UNCTAD and FAO.
Newbery, R., Siwale, J., & Henley, A. (2017). Editorial: Special issue on rural entrepreneurship theory in the developed and developing context. International Journal of Entrepreneurship and Innovation, 18(1), 73–74.
Mayer, C. (2010). The need for investment. In Kshetri, N. (2011), Institutional and economic foundations of entrepreneurship in Africa: An overview. Journal of Development Entrepreneurship, 16(1), 9–35.
Mishra, A., Igwe, P., Lean J., & Megicks, P. (2014, December). Book chapter on supporting micro and small enterprises, The Routledge Companion to Financial Services Marketing, Routledge (Taylor & Francis Group). Retrieved from http://www.routledge.com/books/details/9780415829144/.
Ocampo J. A., & Vos, R. (2008, February). Policy space and the changing paradigm in conducting macroeconomic policies in developing countries. BIS Paper 136, Initiative for Policy Dialogue at Columbia University
Ochulor, C. L. (2011). Failure of leadership in Nigeria. American Journal of Social and Management Sciences, 2(3), 265–271.
OECD. (2005). African Economic Outlook (2004–2005), OECD Development Centre, Paris.
Pines, A. M., Lerner, M., & Schwartz, D. (2010). Gender differences in entrepreneurship, equality, diversity and inclusion in times of global crises. Equality, Diversity and Inclusion: An International Journal, 29(2), 186–196.
Porter, G. (2002). Living in a walking world: Rural mobility and social equity issues in Sub-Saharan Africa. World Development, 30(2), 285–300.
Porter, G. (2014). Transport services and their impact on poverty and growth in rural Sub-Saharan Africa: A review of recent research and future research needs. Transport Reviews, 34(1), 25–45.
Reardon, T. (2001). Rural non-farm income in developing countries. mimeo, Michigan State University.
Sonobe, T., Akoten, J. E., & Otsuka, K. (2009). The growth process of informal enterprises in Sub-Saharan Africa: A case study of a metalworking cluster in Nairobi. Small Business Economics, 36(3), 323–335.
Thomas, A. S., & Mueller, S. L. (2000). A case for comparative entrepreneurship: Assessing the relevance of culture. Journal of International Business Studies Second Quarter, 31(2), 287–299.
UN. (2008, January). Small scale enterprise development and FDI in Africa: Challenges and opportunities, United Nations Office of the Special Adviser on African, p. 4.
UN. (2009). Small scale enterprise development and FDI in Africa: Challenges and OPPORTUNITIES, 09-25698, May 2009, 300. p. 4. www.un.org/africa/osaa
USAID. (2010, June 17). Constraints to female entrepreneurship in sub-Saharan Africa, USAID Knowledge Services Centre, U.S. Agency for International Development.
Wallace, J. (2000). Small enterprise development in Africa: Lessons from success. Marshall University.
Woldie, A., & Adersua, A. (2004). Female entrepreneurs in a transitional economy: Businesswomen in Nigeria. International Journal of Social Economics, 31(1/2), 78–93.
World Bank. (2005). World development report 2005: A better investment climate.
World Bank. (2016, March). While poverty in Africa has declined, number of poor has increased. Retrieved from http://www.worldbank.org/en/region/afr/publication/poverty-rising-africa-poverty-report.
World Bank. (2010). World development report: Development and climate change. The World Bank.
World Bank. (2013, July 12). World Bank assisted commercial agriculture development project disburse, Press release. Retrieved from http://www.worldbank.org/en/news/press-release/2013/07/12/world-assisted-commercial-agriculture-development-project-disburse-over-n209-million-to-3000-farmers-in-kano-state.
World Bank. (2015, October). Fact sheet: Doing business 2016 in Sub-Saharan Africa. The World Bank. Retrieved from http://www.worldbank.org/en/region/afr/brief/fact-sheet-doing-business-2016-in-sub-saharan-africa.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2018 The Author(s)
About this chapter
Cite this chapter
Igwe, P.A., Onjewu, A.E., Nwibo, S.U. (2018). Entrepreneurship and SMEs’ Productivity Challenges in Sub-Saharan Africa. In: Dana, LP., Ratten, V., Honyenuga, B. (eds) African Entrepreneurship. Palgrave Studies of Entrepreneurship in Africa. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-73700-3_9
Download citation
DOI: https://doi.org/10.1007/978-3-319-73700-3_9
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-319-73699-0
Online ISBN: 978-3-319-73700-3
eBook Packages: Business and ManagementBusiness and Management (R0)