The entrepreneurship challenge in Africa

Abstract

There is a great excitement in SME circles about the political, social, and economic developments taking place worldwide. Of particular interest are developments in emerging countries, especially those of Africa, where it is believed the SME sector can catapult socioeconomic development. But will entrepreneurship and SME develop be the panacea for African economies? This paper argues that while a positive link exists between economic development and entrepreneurship al least in the developed world (Birch, 1987) one cannot be too sure about a similar research systematically demonstrating the relation in Africa. This raises a fundamental problem. The problem that emerges when attempting to generalize economic development trends from one economy to another is the lack of consideration of current models of entrepreneurship development. Il is widely believed that the development of entrepreneurship is the result of coordination of internal and external components facing the entrepreneur. The favourable nature or lack of it regarding internal and external factors frequently influences the entrepreneurs' ability to create viable organizations. Therefore, external bottlenecks created by African economies need to be removed if SMEs are to be their engines of growth.