chapter 8 Entrepreneurship Development in Africa: Insights from Nigeria’s and Zimbabwe’s Telecoms Nnamdi O. Madichie, Knowledge Mpofu and Jerry Kolo Introduction This chapter explores the challenges and opportunities for entrepreneurship development in Nigeria and Zimbabwe. The cross-national comparative analy- sis provides insights on the diverse and unique configuration of institutional logics that promote or constrain entrepreneurship development in these two sub-Saharan African (ssa) economies (Ajai 2015: 153). The contextual oppor- tunities and barriers in the two countries are explored by drawing from insti- tutional theory (Pache and Santos 2010; Smith and Lewis 2011), and using the telecommunications sector to highlight the issues that shape the current and future trends in entrepreneurship development championed by a “new gen- eration of African entrepreneurs” (McDade and Spring 2005). Comparatively, Nigeria has been covered considerably more than Zimbabwe in existing litera- ture on entrepreneurship development in Africa. Nigeria’s Globacom, found- ed by Mike Adenuga, and Econet Wireless, founded by Zimbabwean Strive Masiyiwa, are two case studies from the telecommunications sector led by a new generation of African entrepreneurs and used in this chapter to illustrate enterprise development (Carter and Wilton 2006a, 2006b). Both case studies provide critical analysis of emerging issues through compelling success stories of entrepreneurship initiatives despite infrastructure challenges and unstable economic and political landscapes experienced in the two ssa countries in recent years. The choice of countries is based on trends in the telecommunications sector,1 and trends in entrepreneurship beyond the small business sector. Fur- thermore, the skewed nature of entrepreneurship research in both contexts is evident. On the one hand, Nigeria is well reported in the entrepreneurship literature; Zimbabwe, on the other hand, is largely unreported. Following on from the country level analyses in the second section, the chapter focuses on 1 Telkom sa is discussed under “Profile of the companies” with a history of success in the South African market and several African countries (see Ajai 2015: 155). © Nnamdi O. Madichie et al., 2017 | doi 10.1163/9789004351615_009 Nnamdi O. Madichie, Knowledge Mpofu, and Jerry Kolo - 9789004351615 This is an open access chapter distributed under the terms of the CC BY-NC-NDDownloaded 4.0 from license. Brill.com10/01/2021 05:09:57AM via free access Entrepreneurship Development in Africa 173 The “New” Generation of African Entrepreneurs (McDade and Spring 2005; Goodstein and Velamuri 2009) Telecoms in Africa ( 2004; 2015, 2016) Nigeria Zimbabwe Entrepreneur: Entrepreneur: Mike Adenuga Strive Masiyiwa Company: Company: Globacom (Glo) Econet Wireless Figure 8.1 Chapter framework key entrepreneurial developments in the important mobile telecoms sector. The chapter interrogates the entrepreneurship literature alongside trends in the telecoms sector in both countries. This sets the context for the case studies,2 providing illustrations of enterprise development, starting with a pro- file of the entrepreneurs themselves (see Figure 8.1) – Mike Adenuga (featured in Forbes as the second richest man in Nigeria, behind billionaire portfolio en- trepreneur, Aliko Dangote) and Strive Masiyiwa (Zimbabwean Telecom tycoon 2 Despite the limitations of the research approach in the development of the chapter, it is consistent with what already exists in the public domain (see Gillwald and Mureithi 2011; Sutherland 2011; Curwen and Whalley 2011; Curwen and Whalley, 2008; Karabag and Berggre 2011; Majumdar 2011). For example, in developing a detailed case study on mobile operator roaming charges in East Africa, Gillwald and Mureithi (2011: 32) relied on “empirical evidence acquired through in-depth interviews and market analysis.” According to them “[…] despite Zain being unable ultimately to dominate its competitors, it had a sustained disruptive effect on the entire market.” Nnamdi O. Madichie, Knowledge Mpofu, and Jerry Kolo - 9789004351615 Downloaded from Brill.com10/01/2021 05:09:57AM via free access <UN> 174 Madichie, Mpofu and Kolo also featured in Forbes Magazine) – before exploring the companies these en- trepreneurs founded, Globacom or Glo, and Econet Wireless. Entrepreneurship Development in Africa: Issues, Challenges and Opportunities The seminal article by Tom Forrest (1994) entitled “The advance of African capital: The growth of Nigerian private enterprise”, sets a good tone for Entre- preneurship Development in sub-Saharan Africa (ssa). The article is argu- ably the most extensive account of medium- and large-scale African business published on the topic in the 1990s. It examines the strategies and patterns employed by enterprises from the colonial period to the post-independence decade, and provides specific profiles of Nigeria’s key entrepreneurs. The study is not only a valuable digest of business activities, but also challenges existing views about ssa enterprise development (see Madichie 2016). It also raises a series of questions about the challenges of ssa Enterprise development – a topic worthy of re-examination in the current economic dispensation con- fronting the region. Two decades on, in 2016, the region is facing the same questions; notably, what role have the political conditions played in shaping the general conditions for accumulation (i.e. private/indigenous)? How impor- tant have state policies been in the formation and rate of private accumulation (of private capital)? Do social and economic spaces exist within which pri- vate enterprises are sufficiently independent of political and state control to allow the pursuit of private, large-scale accumulation of capital and economic growth and development? In a bid to address these questions, McDade and Spring (2005) identified characteristics of a supposedly “new generation” of entrepreneurs from the region. These authors evaluated the goals and achievements of the enterprise networks of these new breed of players, and conclude that, despite the limita- tions (especially from the political class and institutions), these entrepreneurs have gone on to create intra- and cross-national networks that strengthen private- sector-led economic growth in ssa (see McDade and Spring 2005: 17). As these authors point out in the interdisciplinary volume African Entrepre- neurship: Theory and Reality, there is a spectrum of entrepreneurs ranging from illiterate owners of micro-enterprises to wealthy founders of large manufactur- ing firms and their mba-educated managers (see McDade and Spring 2005:18). The entrepreneurial landscape in ssa accommodates a multitude of micro- enterprises that provide marginal employment for a single individual as well as a small number of large corporations employing hundreds of people. Nnamdi O. Madichie, Knowledge Mpofu, and Jerry Kolo - 9789004351615 Downloaded from Brill.com10/01/2021 05:09:57AM via free access <UN> Entrepreneurship Development in Africa 175 The configuration includes informal and formal sector businesses, traditional and modern, indigenous and foreign-owned enterprises geographically dis- persed in rural and urban areas. The characterisation of ssa businesses also spans a small large-scale sector and a large small-scale sector. In between is the medium-scale sector, which has been called the “missing middle” in the context of ssa (McDade and Spring 2005: 20). However, a study of modern ssa entre- preneurs in six countries (Botswana, Cote d’Ivoire, Ghana, Kenya, Malawi, and Tanzania) profiled medium-scale firms and concluded that “the middle is not missing” (Marsden 1990: 5). For example, it identified 5000 formally registered road transport companies in Tanzania, and reported that over 2000 Ghanaian businesses applied for loans from financial institutions where the average in- vestment project funded was us$1.5 million. As McDade and Spring surmised, “these are not micro- or small-scale enterprises.” (McDade and Spring 2005: 20). Indigenous medium-to-large-scale formal sector enterprises are an impor- tant part of the entrepreneurial landscape in spite of their small percentage. Also, there has been the argument that this precedent was set by colonialism, which stifled the growth of an indigenous formal private sector; most ssa gov- ernments have, post-independence, continued to limit the expansion of in- digenous entrepreneurship. Government leaders were suspicious that a strong private sector comprised of their own citizens might threaten their own pow- ers and privileges. Hence, during the 1960s to 1980s, many ssa states stepped into the role of business owner. State-owned enterprises (soes) assumed the responsibility of building the infrastructure of newly independent countries to meet the demand for goods and services. Most soes were unproductive and failed; so, by the late 1980s, many ssa governments reverted to donor-driven policies that promoted private sector-led economic development.3 3 According to McDade and Spring (2005: 21), the soes were sold to civil servants or business- men, many of whom came to be known as “business bureaucrats”, who depended on the patronage of governments to remain viable (Janssens-Bevernage 2002: 12). During the 1980s, donor mandated structural adjustment programmes (saps) called for economic liberalisa- tion to open both private and state-owned domestic firms to external competition. Most large firms in Africa manufacture beverages, clothing, furniture,