P 28

Entrepreneurial Ecosystems in Africa

Panel abstract
Entrepreneurship has gained wide currency on the continent of Africa. This realization has caught up with many African actors (institutions, firms and entrepreneurs) alike. In effect, players with a pan-African agenda like the African Development Bank, the Tony Elumelu Foundation and the high profile conglomerate Dangote Group have translated entrepreneurship into success by either supporting or promoting it across the continent. On the other side, most of the local ecosystems to promote entrepreneurship are still weak and suffer from the limited linkages between the actors. To further understand entrepreneurship development in Africa, we want to realize an inter-disciplinary discussion that includes economic, business, social and environmental aspects of entrepreneurship. The panel will illuminate our understanding about African actors who have taken leading roles in entrepreneurship on the continent, while assessing the influential power of these actors on the entrepreneurship landscape. Furthermore, the panel showcases the forms of control exerted by these actors and the opposition being met from other non-African actors. Finally, we would like to discuss the international connections of African entrepreneurs and analyse the development of born global start-ups. This way, we are able to observe the development status of the entrepreneurial ecosystem in Africa to generate both positive and negative effects on the continent. In the general perspective, we aim to place Africa as a subject capable of exerting influence on how entrepreneurship is shaped on the continent.

Time: Friday, 29/06/2018, 8.30 - 10.30 am, 11 am - 1 pm (double session)
Venue: Seminargebäude, S 204

Utz Dornberger (Leipzig University)

Session 1
Philipp Öhlmann, Marie-Luise Frost, and Wilhelm Gräb (Humboldt University of Berlin)
Phelista Wangui Njerum and Vincent Gaitho (Mount Kenya University, Thika, Kenya)
Mario Marasco (University of Rome, Italy)
Eugenija Kovaliova and Mante Makauskaite (AfriKo Vilnius, Lithuania)
Prince Kwarteng Oppong, Richard Adu-Gyamfi, Ralph Nyadu-Addo, and Utz Dornberger (Leipzig University)

Session 2
Richard Adu-Gyamfi, Prince Kwarteng Oppong, Ralph Nyadu-Addo, and Utz Dornberger (Leipzig University)
Kwabena Obiri Yeboah, Utz Dornberger, and Md Noor Un Nabi (Leipzig University)
Deogratias Kibona, Utz Dornberger, and Md Noor Un Nabi (Leipzig University)
Gonzalves Nshimiyimana (Leipzig University)


Paper abstracts

Philipp Öhlmann, Marie-Luise Frost, and Wilhelm Gräb
African Initiated Churches – Actors of Entrepreneurial Empowerment

African Initiated Churches (AICs), churches founded in Africa by Africans, are important agents of entrepreneurial empowerment. Their leaders have identified poverty and unemployment as main problems in people’s lives. Consequently, they encourage members and non-members to realize their entrepreneurial potential in order to become self-sustainable. The churches organize an exchange of expertise with successful entrepreneurs, offer entrepreneurial skills, and provide financial support for business entrepreneurs in their pews. More importantly, while being directed towards a material improvement, AICs’ support includes a strong spiritual dimension. It is this component that differentiates their activities from those of other supportive actors in the field. Economic activities are linked with many of these churches’ prosperity theology. Economic and spiritual transformation are seen as two sides of the same coin and entrepreneurial success is understood as a divine blessing. No matter how poor people are, they are encouraged to take their economic lives into their own hands because ‘it is God’s will for you to prosper’. Hence, the AICs’ social networks and their theology are fertile ground for the promotion of entrepreneurship and economic independence. Yet, their engagement and their potential to promote entrepreneurship have remained largely unnoticed. This paper aims to contribute to filling this gap. Based on church leader interviews in Ghana, Nigeria, and South Africa, the paper, first, outlines and contextualizes the AICs’ activities for entrepreneurship promotion. Second, the ideological fundaments of these activities, relating to the churches’ theologies and worldviews, are analysed. Third, the effects of the churches’ entrepreneurship promotion will be discussed.

Phelista Wangui Njerum and Vincent Gaitho
An Empirical Analysis of the Extent to Which Entrepreneurship Education Influences Entrepreneurial Intention and Behaviour

Entrepreneurship education has been overemphasized in Kenya. It’s meant to formulate entrepreneurial intention and behaviour that translate to venture start-ups and reduce the number of graduates seeking formal employment. Currently Kenya experiences about 75% level of unemployment among the youth. The objective of this paper is to analyse the extent to which entrepreneurship training influences entrepreneurial intention and behaviour. The specific objectives were: to determine effects of entrepreneurship education attributes’ on entrepreneurial intention and behaviour; to evaluate the influence of student personal differences on entrepreneurial intention and behaviour; to analyse the cultural entrepreneurship orientation on entrepreneurial intention and behaviour, and to evaluate effects financial inclusion framework on entrepreneurial intention and behaviour. The study used explorative research design and a mixed approach where both qualitative and quantitative data were collected. Research targeted the 30000 final year students from Mount Kenya University and Jomo Kenyatta University of agriculture and technology. A 10% sample was considered representative enough. Using questionnaires that had open and closed-ended question, data were collected. These were analysed, using both descriptive and inferential statistics to establish the correlation between the variables. Results were presented by the use of frequencies, charts, and tables. Pearson’s correlation analysis was used to establish the relationship between variables. By use of charts, frequency distribution tables, pie chart, and bars, the findings were presented.

Mario Marasco
Entrepreneurial Policies in Mekelle (Ethiopia): a New Social Construction of Poverty

In Mekelle (Northern Ethiopia), being poor means not be able to become rich, not having certain essential entrepreneurial skills. This is the basis of an argument that local development policies implement through the so-called ‘initial works’: young workers’ cooperatives who should learn to save and capitalize money to invest with the help of local government. This is because, according to the moral world of local development, poverty can only be defeated if everyone becomes an entrepreneur, helping himself and others too. The paper aims to offer an analysis – starting from empirical case studies – of the urban transitional social context of Mekelle city, focusing on the stories of some work groups involved in local entrepreneurship programmes. Entrepreneurship – as an antidote to poverty – is a neoliberal perspective that aims to eliminate costs of a ‘classic’ welfarism, preserving the reproduction of ties of dependence, as a premise of political consensus and ‘social immobility’. The paper will move the attention from the social construction of a youth economic empowerment to the production of moral consensus, highlighting the dialectic between what, in the public space, must be visible and what must remain in the shadow.

Eugenija Kovaliova and Mante Makauskaite
Living the Silicon Valley Dream in Nigeria – Reflections on Realities of Tech Start-Up Hubs in Abuja, Lagos, and Ibadan

In August 2016, Mark Zuckerberg, founder of Facebook, visited Nigeria and met with developers and entrepreneurs in one of the TechHubs – Co-Creation Hub – in Yaba (or Yabacon), which is referred to as Lagos’ Silicon Valley ‘equivalent’. This brought significant international attention as well as high expectations for Nigerian start-ups, who seemed to start believing that they can live a Silicon Valley dream in Lagos, Abuja, or other places around the country despite the power shortages, slow connectivity to the Internet, and other infrastructural challenges. A number of TechHubs in Nigeria (and other African countries) has been indeed booming and providing with a promise for a prosperous future of young ‘techpreneurs’ who will solve Africa’s problems. However, besides general mapping of TechHubs in Africa, there is little in-depth research whether this promise can be delivered, what are the local, international, and diaspora players within this field, what are their motivations and potential impact. AfriKo, through its current project oriented towards connecting Nigerian ICT entrepreneurs with Lithuanian ICT expertise through skills sharing programme, is researching the Nigerian TechHubs ecosystem. The stories of various Tech Start-Ups incubators, accelerators, seed funds, and investors, collected during AfriKo fieldwork in Lagos, Abuja, and Ibadan, will lay the ground of the paper and will attempt to open up a larger discussion on local entrepreneurial eco-systems, the various stakeholders involved, evolving local and global connections.

Prince Kwarteng Oppong, Richard Adu-Gyamfi, Ralph Nyadu-Addo, and Utz Dornberger
Analysing the Macro-Framework Conditions for Technology-Based Entrepreneurship to Thrive; Policy Experts’ Perspectives on Ghana

Considering the important role technology-based entrepreneurship plays in the development of a country, the various framework conditions that could enhance technology drive and entrepreneurship need to be assessed. In Ghana, like many other countries in sub-Sahara Africa, there is limited appreciation of the macro framework concepts among policymakers with skewed focus on financial conditions despite a broad range of other conditions in research and development, government policies, and regulations. The study seeks to analyse the link between the macro framework conditions, which include policies and environmental factors and the growth of technology-based entrepreneurship in Ghana. This is done by applying the concept of the entrepreneurial framework conditions (EFCs) as described in the Global Entrepreneurship Monitor (GEM) model through the national expert survey (NES). The research adopted strict scientific guidelines, using primary data from questionnaires, face-to-face interviews, and secondary data from articles, books, journals, and reports from institutions. In accordance with GEM model’s methodology, thirty-six (36) policy experts were selected through purposive and snowball-sampling techniques and subsequently interviewed. Findings indicate unbalanced support and appreciation of key macro frameworks in such areas as research and development, finance, government policies, and regulations that could favour technology-based entrepreneurship promotion. In addition, there is a disconnect between these macro policies planning on the one hand, and ground implementations and practice on the other.

Richard Adu-Gyamfi, Prince Kwarteng Oppong, Ralph Nyadu-Addo, and Utz Dornberger
Towards Entrepreneurship Promotion in Africa Through Export Processing Zones: Evidence of a Ghanaian Export Business

From a worldwide perspective, the export processing zone (EPZ) has been used as a means to attract foreign investment, generate employment, diversify exports, create linkages, and transfer technology to the host economy. In the case of Africa, the uses of the EPZs have not differed from the purpose they intend to serve. However, the attention has mainly been drawn to analysis highlighting the (non)-effects of the presence of established or vegetating foreign firms in EPZs. In other words, entrepreneurship drive is mainly focussed on the foreign firm. In our paper, we seek to address the EPZ as promoting local entrepreneurship. Taking a cue from a Ghanaian case, we study a local firm that operates in an EPZ to illustrate the entrepreneurship promotion function of the EPZ. Furthermore, we point out the linkages that the local firm forge with the host economy based on supply, labour, institution, and services. We argue based on the case that promoting local entrepreneurship through EPZ has business and development implications in which the host country benefits. The case calls for a strong policy drive that supports local entrepreneurship in EPZ in addition to its foreign investment attraction. We contend further that the Ghanaian case underscores the need to increase local export business in EPZs in Africa.

Kwabena Obiri Yeboah, Utz Dornberger, and Md Noor Un Nabi
The Influence of African Normative Institution on New Venture Creation

African entrepreneurs, like other entrepreneurs, consider some factors when establishing new ventures. One of the key factors is normative institution. Normative institution is regarded as the norms and values that are shared within a society. The influence of the normative institution in the decision-making process of an entrepreneur results in a causal or effectual reasoning. This affects the choice of the venture type they engage in. There is a growing body of literature on entrepreneurship in Africa. A number of them focus on entrepreneurship growth in Africa, but little can be found on how the normative institution affects the choices of entrepreneurs. The effect of cultural practices on new venture creation has been under-researched. Norms and values that a society shares influence the types of businesses their members choose and encourage its growth. In African, with its many cultures, the role that the normative institution plays in decision-making in new venture creation cannot be underestimated. To understand this phenomenon, this paper examines the influence of the African normative institution on entrepreneurial decision making in venture creation.

Deogratias Kibona, Utz Dornberger, and Md Noor Un Nabi
Facilitating Incubated MSMEs’ Access to Semi-Formal Finance in Tanzania. Do Business Incubators Play a Financial Intermediation Role?

This paper examines the financial intermediation role of incubators between incubatees and semi-formal financiers. We were motivated to do this research because most MSMEs point out financing as the foremost obstacle to their growth. The main cause for the finance gap is the problem of information asymmetries. The problem can be addressed by financial intermediaries. This research investigates the impact of incubator’s monitoring services (IMS) on incubatees’ financial management capabilities (FMC), and then assessing the impact of incubatees’ FMC on their accessibility to semi-formal finance. To determine this, the perception of 77 incubatees on getting support from incubators, their ability to manage finance, and their access to semi-formal finance were analysed. The survey covered incubatees in with-wall incubators, without-wall incubators and co-working spaces. The hypotheses were tested by using PLS regressions. The results indicate that IMS have a significant positive impact on incubatees’ FMC. Also, incubatees’ FMC have a significant positive impact on semi-formal financial accessibility. These findings generally indicate that, IMS play an important role in building capabilities among incubatees to manage finance. This leads to the reduction of information asymmetries between incubatees and semi-formal financiers leading to increased semi-formal financial accessibility. Based on these results, the argument that incubators play a financial intermediation role in promoting incubated MSMEs’ semi-formal financing is confirmed.

Gonzalves Nshimiyimana
Corruption and Growth in Start-Up Rate – an Exploration of Selected African Countries

The abuse or misuse of entrusted power for private gain as Transparency International (TI) and World Bank (WB) define it is corruption. It occurs basically in four main forms: bribery, embezzlement, fraud, and extortion. Although there is no international consensus on corruption meaning, reports about it are used by different institutions as strong tools for judging the efficiency and governance of countries. Such reports portray risks involved in investing in corrupt places. Given negative effects of corruption, one would expect low levels of business risks in countries with high levels of corruption. To the contrary, African countries such as Angola, Kenya, Morocco, Egypt, Nigeria, South Africa, etc., considered to be highly corrupt, are regional economic powerhouses exhibiting high levels of entrepreneurship eagerness and FDI. The US and Western Europe, lowly ranked in corruption indexes, are their major FDI contributors (EY’s Attractiveness Program Africa, 2017). One wonders why African highly corrupt countries exhibit strong entrepreneurship eagerness and receive more FDI than less corrupt countries. To what extent does corruption negatively affect business start-up and growth rates in Africa? This exploratory comparative paper assesses corruption impediments to entrepreneurship success by analysing secondary data from intergovernmental and non-governmental organizations (government reports are eliminated for self-praise tendency). Two countries – one highly, another less corrupt – in five African regions are selected based on 2016 TI and WB reports and analysed from 2010 datasets. Main dimensions involve corruption, FDI, and Doing Business. It questions the rationale behind how bad corruption is yet it attracts investment risks.