The following literature review evaluates scholarly research on the challenges of entrepreneurship, project management and sustainable development in Africa. Based on the discussion meaningful implications and suggestions are mentioned towards the end. Africa is a land of magnificent natural sceneries and resources but even in the 21st century it is still considered the Dark Continent, bearing metaphorical meaning. It is the least developed continent in the world. Despite major efforts in improving the lives of Africans there are many challenges that face the continent.
Sustainable Development in Africa
Africa has immense natural resources and precious minerals. For decades the practice of finding energy sources has been in effect. Before judging the state of Africa’s development one must consider the special circumstances associated with it. It is one of the worst poverty stricken regions on earth. This extreme scarcity acts as a hurdle in sustainable development of the region. Foreign aid or local efforts might temporarily improve a city or town but much more is required to elevate the lifestyle of people to an acceptable level.
Sufficient nutritional food, clean water, shelter, education and security are the primary needs of any man. A huge number of Africans are devoid of these basic necessities, which complicate matters for sustainable development. Also, sustainable development is different from industrial development that the world saw in the beginning of the 20th century. Economic growth has a correlation with environmental decline (Kanayo, Kizito, and Udefuna, 78). The more the earth’s resources are used the greater the toll on the environment. Currently the practice of extracting precious metals; gold, oil and diamond has had an immense impact on the African environment (Kanayo, Kizito, and Udefuna 89). If these practices continue, it will cause significant environmental damage.
However, an expanding economy provides job and upward trending GDP. It is far easier in Africa to exploit natural resources than to create sustainable solutions. Governments welcome economic expansions even if it is small because over the years small increments lead up to massive industrial changes. Many of African governments and industries do not pay much attention to environmental damage. In this pursuit of economic expansion they tend to ignore the impact on the environment.
In certain cases the firms do not pay much attention to negative spillovers harming the environment. They are more concerned with increasing production than saving the environment (land erosion or protecting natural habitat) (Ramirez 26). Poverty reduction needs alternatives that do not damage the environment. On one hand a 2012 statistical report shows a reduction in poverty in North Africa (Ramirez 27) but it fails to take into account the irreparable damage to the environment for digging up natural resources on mass scale.
Entrepreneurship in Africa
Entrepreneurship in Africa is an interesting concept, where many consider it a part of the solution to Africa’s economic problems. Empirical evidence suggest that entrepreneurship has been the driving force behind many nations (Nafukho and Muyia 96). Corporate greed is not specific to Africa, all across the world, companies exploit natural resources. The fact that there is more exploitation of natural resources in the third world is due to the absence or lack of law enforcement. The bigger the company the easier it is to buy allies in the administration. The rising trend of entrepreneurship can be helpful in poverty alleviation without exploiting the natural environment.
Entrepreneurship in Africa has certain challenges. Research suggests that in Africa social and family ties play a crucial role in the career of a new entrepreneur (George et al. 1118) Entrepreneurship is prevalent with risks; business ventures can fail completely or go in financial losses. For an African entrepreneur it is expected that they conclude that the return on their investment will be more than the cost, or from a point of reference the return of entrepreneurship will bring positive returns. To them, the outcome of a risky decision from a point in time must show a positive return.
In other words, for an average African there is much more at stake as an entrepreneur compared to an average Westerner. The Westerners have a higher threshold of affordable loss when starting a business venture (George et al. 1119). In this sense the social structure in Africa is counter-productive. Thus the society mainly depends on conventional means of finding jobs at companies. This same argument has been endorsed by Dzansi and Arko-Achemfuor (p. 146). Risk tolerance is associated with entrepreneurship. Ethnicity and cultural backgrounds impact peoples’ risk taking ability. If it is not the norm then it becomes difficult to defy the odds in taking risks.
The Dzansi and Arko-Achemfuor study evaluates the impact of ethnicity and culture on business risk taking in South Africa. They discovered that ‘colored’ entrepreneurs were more risk averse and preferred working for an established firm for a salary than starting their own business (Dzansi and Arko-Achemfuor 152). The people surveyed in this study reported that entrepreneurial activities were stressful to them. And a fixed salary job at a firm was better for their well-being and psychological health (Dzansi and Arko-Achemfuor 152). Taking business risk becomes more challenging when it is also against the business or economic norms of a region.
Considering the context of Africa; lack of infrastructure, extreme poverty, wars etc., finding big corporates to bring in huge investments seems farfetched. The reason for stressing on entrepreneurship or small businesses is that these might have a solution. Small businesses are important in creating jobs (Coleman 12). Africa can benefit a lot by focusing on small businesses. This is not merely a suggestion, statistics suggest that in South Africa about 45 percent of the people work in firms that have under ten employees (Coleman 12). Unemployment is one of the major problems in Africa and by rectifying it through small businesses, the benefits can be numerous. It can help reduce poverty, create security and generate much needed economic activity.
Another issue highlighted by Ahmed and McQuaid is the trend in Africa where business environment is not helpful to entrepreneurs. They relate the old established industries with the Upas tree in Africa, which strangles the growth of nearby vegetation by soaking up the rain water (Ahmed and McQuaid 23). This trend is also observed in Sweden and in the US where industries such as shipbuilding are suppressing the growth of small and medium sized businesses.
Other problems hurting the economic and financial growth of Africa are the lack of infrastructure and power. World Bank estimates that Africa needs $93 billion annually to invest in infrastructure projects (Leuvennink 18). The biggest need is to generate power as 30 African countries regularly face power shortages (Leuvennink 18). China is a huge investor in Africa however, the need for effective project management is essential.
Project management and Acceptance of Entrepreneurship
Project management and entrepreneurship are not isolated concepts. As mentioned above entrepreneurship has diverse meanings. If a country or countries are willing to invest in Africa this should produce the necessary funds to generate the economic activity. It is up to the local administration how well they utilize this investment in creating opportunities and sustainable development. It is also a debatable issue how easily foreign companies can exploit the natural resources of Africa.
An issue in sustainable development and entrepreneurship in Africa is skepticism associated with the concept of entrepreneurship. A common perception is that entrepreneurship is not for long term sustainable growth (Adusei 201). This way of thinking makes people apprehensive of this emerging form of conducting business. Opportunity entrepreneurship has been under criticism in the continent (Adusei 202), which makes it difficult to openly promote and attract investors. The evidence suggests that despite the general disapproval entrepreneurship has shown promising results.
A study conducted in 12 African countries showed a positive association between successful entrepreneurship and economic growth (Adusei 202). There are various determinants of economic growth, and financial development is one of them. Controversies are sundry regarding the correlation between economic growth and financial development. This creates confusion as to the outcomes of entrepreneurship. For instance, some studies have found a negative correlation between economic growth and financial development (Adusei 202). Assuming that a result of entrepreneurship is financial development which in turn reduces economic growth of a country, it will get social disapproval. However, in the broader sense, whenever the government invests money on education and infrastructure there is no doubt that it increases economic growth.
In 1957, Ghana and South Korea had an almost equal per capita income (about $490) (Ika 28). It might occur to a few proponents that Africa is a special case as it has seen the worst of poverty and poor infrastructure, so aid might help in elevating the living standards. Aid might be helpful in case of emergencies such as floods or droughts but it cannot help eradicate the fundamental problems. Aid is never a long term solution and the results of financial support are not satisfactory.
Instead of aid, the factor that can contribute in economic growth is international development or ID. An ID is usually temporary and is part of a larger project. World Bank’s projects in Africa form ID’s but they are sub-projects. Usually an ID is aimed at improving the wealth of a select population (Ika 30). This makes ID’s social projects with “political undertakings” (Ika 30). The administration needs to be onboard and usually involves joint efforts regarding the efficiency of the project.
The case of ID in Africa is complex and statistics are not encouraging. The World Bank has spent $5 billion in over 700 projects in Africa but sadly the success rate is less than 50% (Ika 31). The two main reasons for this huge failure rate of projects are 1) tough environment for business projects and; 2) low number of highly qualified people (Ika 31). Also a huge number of people prefer working in other countries where there are better opportunities. This creates a brain drain making African devoid of highly skilled people.
Planning a project for many African countries looks good on paper but history suggests that Africa has a lot of problems with the implementation. Some problems can be managed with time while others are extremely complicated. ID projects are part of a bigger project, which tend to run into many structural problems entangled in politics (Ika 32). The economic motives of the investor (or donor) as well as the receiver of the money also determine the outcome of an ID. Similarly, sometimes religion and culture create problems in the successful completion of an ID (Ika 32). For instance, if an ID strives to create jobs for women then gender roles of an African country might become a hurdle in its path.
Attitudes towards work and professions vary in a society. This is also endorsed in a study by Muriithi and Crawford (2003). Personal choices and work values depend on the culture (Muriithi and Crawford 310). African cultural and social values are not truly welcoming to conventional project management. The core of project management rests on the concept that project managers are rational problem solvers. Here lies the problem as such conventional PM models are implied in certain African cultures that are not built on economic rationality, it creates conflict and renders the efforts futile (Muriithi and Crawford 311). Hence starting new projects on conventional basis and Western corporate values is difficult in Africa.
Suggestions and Implications
Despite extreme poverty, lack of infrastructure and cultural and social hurdles there is still economic progress in Africa. One way to move forward in this context is to scale up the growth. Moses N. Kiggundu (2002) conducted a research on the status of entrepreneurship in Africa. He goes in depth regarding the implications of the concept of entrepreneurship. Mentioning different forms of impact of one concept is important as entrepreneurship means different things to different people. For instance, the self-employed African hawker needs to evaluate if entrepreneurship is something of a pastime or is it an ongoing project (Kiggundu 253). Similarly, SME owners need to scale up using modern tools of management, entrepreneurial theories and technology (Kiggundu 253). State owned enterprises need to focus on cost cutting and creating strategic and meaningful alliances (Kiggundu 253). There have been success stories when the efforts have met less resistance.
When accepting Africa as a place where conventional project management strategies do not produce the desired fruit, other innovative tactics can come in handy. The ‘bottom of pyramid’ BOP business strategies have been in use in Asia and Africa. These strategies work because they are created according to specific needs of a project in its special setting. Although BOP’s vary significantly across the world but they have proven to be extremely successful in poor countries (Angot and Plé 3). BOP’s can be properly studied and recommended for majority of project in Africa that lack the initiative due to the setbacks and hurdles specific to African countries. The fact is that BOP’s are not only specific to poor or developing countries. Even the developed world has its own set of poor population that resort to such tactics for income generation (Angot and Plé 3).
Innovative business strategies do not have to only rely on BOP’s or temporary ‘puncture repairing’. Africa has tremendous natural resources and not all need to be dug up from the earth. The sub-Sharan plains receive significant amount of sunshine for the most part of the year. By harboring this free energy the problem of power generation can be managed to an extent. In the past solar panels used to be expensive but due to increased production from China a drop of about 50% has hit the market, making solar energy much more feasible (Amankwah‐Amoah 16). The four Sub-Saharan countries; Ghana, Nigeria, South Africa and Kenya are considered the emerging economies of Africa. An encouraging aspect in terms of economic growth for these countries is the fact that they can indulge in technological leapfrogging. It basically means that an impoverished country can acquire the necessary technological skills that help bypass the hurdles of vintage technology.
The focus needs to be shifted regarding business norms and expectations. Mega projects that bring in billions of dollars are not coming in with the desired frequency. It is difficult for the African countries to start forecasting the influx of foreign reserves. Small businesses and entrepreneurs are the key to economic development. Also, the entrepreneurs need to focus on middle class for their products or services (Babah, Ingenbleek and Trijp 130). The businesses that are focusing only on the poor sector of the society can think about moving upward; the middle class offers a lot of potential (Babah, Ingenbleek and Trijp 130). For instance, a food seller selling cheap items to the poor section of the society might want to move up to a place where he/she can offer food without bargaining at a fixed but higher price. A potential threat in this business strategy is that the micro-entrepreneurs might face a hurdle due lack of information when moving up, or when they move up they might be less independent, which leads to poor decision making.
The complication with the African culture which does not harbor conventional project management can only be solved by the experts. There have been many project failures in Africa so much so that they have been deemed as a syndrome. The involvement of well trained project managers and experts can dissipate this syndrome (Rwelamila and Ssegawa 221). The majority of project management courses being taught in Africa focus on the project itself but very little is studied regarding sociocultural knowledge base (problem solving, team work etc.) (Rwelamila and Ssegawa 221).
It is almost impossible to change the sociocultural of Africa overnight to make it friendlier towards entrepreneurship. However, community based solutions can help. Research suggests that community based solutions have helped the poor nations of Latin America, Asia and Africa (Peredo and Chrisman 309). This will not only help in accommodating the project management but also in fusing it with the African culture. Community based enterprises (CBE) are created by community members in a corporate setting (Peredo and Chrisman 310).
Synopsis
Works Cited
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