Private enterprise led economic development in sub saharan africa the human side of growth

Private enterprise-led economic development in Sub-Saharan Africa : the human side of growth / John Kuada.. Part I The Context and Trends of Economic Development in Sub-Saharan Africa Pa

in Sub-Saharan Africa

Private Enterprise-Led Economic Development

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Kuada, John.

Private enterprise-led economic development in Sub-Saharan

Africa : the human side of growth / John Kuada.

pages cm

1 Free enterprise—Africa, Sub-Saharan 2 Economic

development—Africa, Sub-Saharan 3 Africa, Sub-Saharan—Economic conditions I Title.

Part I The Context and Trends of Economic

Development in Sub-Saharan Africa

Part II Culture, Civil Society and Economic Growth

6 Culture and Its Relevance to Economic Development

Part III Leadership, Governance and Management

10 Leadership and the Management of Human Capability

11 Cultural Influences on Leadership and Human Resource

v

Part IV Entrepreneurial Orientation, Innovation

and Economic Growth

14 Entrepreneurial Activities in Africa: Opportunities and

Part V Global Orientation and Integration

15 Internationalization Theories and Africa’s Economic

Figures and Tables

Figures

Tables

vii

This book would not have been possible without the help and erosity of several people My colleagues at the International BusinessCentre (Aalborg University) provided me with an enriching academicatmosphere and consistently engaged in stimulating intellectual conver-sations with me My sincere thanks to all of them During the process

gen-of the writing itself, many gen-of my colleagues and friends provided mewith invaluable assistance at different stages I must, however, singleout Professors Olav Jull Sørensen, Henrik Schaumburg-Müller and HansGullestrup, who have been kind enough to discuss earlier drafts of some

of the chapters with me They saved me from serious errors and pelled me to think through the implications of my arguments Let meadd in the same breath, however, that all factual errors and errors ofperception and analysis in the book remain solely my responsibility

com-I am also immensely grateful to the following institutions for viding me with academic “homes” during this intellectual journey:University of Ghana Business School, where it all began; CopenhagenBusiness School, where I received my PhD in Business Economics in1981; University of Nairobi (Department of African Studies), where

pro-I did my empirical investigations about managerial behaviour in Kenya;and Aalborg University, Department of Business and Management, myacademic home for the past 25 years

Finally, I would like to express my profound gratitude to my wife andchildren, without whose encouragement and support the book wouldnot have been completed To them, I extend my sincere thanks

viii

Part I

The Context and Trends of Economic Development in Sub-Saharan Africa

Introduction

As a continent, Africa is home for one-seventh of the world’s population(in 2014) while holding nearly a quarter of its land It occupies about30.3 million square kilometres of land surface and is therefore largerthan the area formed by combining the United States, Western Europe,China and India But a large proportion of the people, especially thoseliving in Sub-Saharan Africa (SSA), are mired in abject poverty, most ofthem barely eking out subsistence despite enormous natural resources ofsubstantial commercial value As a result, SSA is commonly described inthe development economics literature as a continent of missed growthopportunities (Akyüz and Gore, 2001) When the subcontinent is com-pared with Asia, the discrepancies are even more staggering, bearing

in mind that several Asian nations such as South Korea and Malaysiawere at similar levels of economic growth as African countries barelyfive decades ago.1

In all fairness, it is important to point out from the onset that SSA hasnot been totally neglected by the richer countries of the world Tril-lions of dollars of development assistance have been poured into it (onprojects spearheaded by individuals and institutions with the best inten-tions), but the results have been woefully disappointing This is not tosay that none of the assistance that has been provided has ever done anygood There are examples where aid has done some good But the over-riding conclusion is that Africa has remained relatively poorer than therest of the world despite these generous aid contributions Thus, the ver-dicts of both academic and journalistic analysts have been consistentlynegative As Najam and Kariuki (2010:1) inform, the prevalent narra-tives about SSA have followed the pattern of “bursts of peaking globalinterest (optimism), followed by periods of global neglect (pessimism);recognition of continental potential, followed by litanies of despair

3

and dismay; expressions of great expectations, followed by prognoses

of hopelessness” There are justifications for the persistent pessimismregistered by contributors to the debate The available evidence showsthat only six SSA countries have more than tripled their per capitaincomes between 1960 and 2005, nine have per capita incomes equal

to or less than where they started in 1960 and the rest have seen somenet improvement, but not enough to make any real dent in their povertylevels (Punam et al., 2011) Those countries that showed promises of fastgrowth in the 1970s (e.g Côte d’Ivoire) have faced stagnation or evendecline during a greater part of the past five decades Furthermore, untilthe beginning of the 21st century, investment in most African coun-tries yielded less than half the return measured in growth terms whencompared with other developing regions (Akyüz and Gore, 2001).The non-growth syndrome that has characterized most countries onthe subcontinent has hitherto been discussed largely in terms of purelyeconomistic and institutional considerations, including policy mistakesand implementation difficulties that have resulted in structural weak-nesses and inefficiencies But the explanatory power of neoclassicaleconomics and the policy guidance that it produces have been seriouslychallenged by a number of leading economists and analysts who haveloudly called for a search into alternative explanations and directions.2This book responds to this search It seeks to do so by examiningthe “economistic” logic that has underlined contemporary economicgrowth initiatives on the continent Leaning on recent studies in eco-nomic sociology, I argue that the “economistic” logic does not explicitlyfactor the enormous reservoir of socially embedded resources available

in civil societies into enterprise and economic development policies, nordoes it encourage their development where they are weak or lacking.This line of thinking directs the searchlight for Africa’s poverty prob-lems and solutions inwards I argue that it is generally easy to blame theoutside world for all of Africa’s predicaments However, this easy routedoes not change the stark realities of poverty It is therefore purpose-ful for Africans to reflect soberly on internal circumstances that hampergrowth and development in their countries and the subcontinent as awhole Thus, I share the view expressed by a growing number of Africanscholars that Africans must demonstrate an inner motivation to endurethe human challenges that a change process entails for sustained growthand poverty reduction to occur (Edoho, 2001; Nwankow and Richards,2001) This focus on endogenous growth drivers underlies my choice

of human capability development as a core concept in the overarching

theoretical framework that I present later in this book

Leaning on scholars such as Karp and Helgø (2009), I argue that thecitizens of every country construct their future together by building ontheir history, identity and growth agenda through an unceasing pro-cess of interaction and dialogue I acknowledge that the atrocities of thecolonial era combine with the negative consequences of global capital-ism, trade restrictions and global politics to constrain the developmentalopportunities available to the least developed countries of the world,including SSA countries But I do not endorse the emotionally seductivearguments of external victimization as a complete explanation for thenon-growth syndrome in Africa.

In emphasizing the human and sociocultural factors of economicdevelopment in the present study, I do not intend to suggest that culturealone (or its related concepts) provides the single universal organiz-ing principle to explain Africa’s limited economic growth and poverty

My argument is that the importance of the human factor has beendownplayed or outright ignored in contemporary discourses, and it isimportant to position it at the centre stage so that all key actors onAfrica’s economic scene can revisit this perspective and do so with theseriousness that it requires

Building on these observations, I initiate this search for alternativeperspectives on SSA’s failed economic progress and poverty-alleviationefforts by reviewing the contemporary thinking on Africa’s economicgrowth and development I then present and discuss the theoreticalviewpoints that inform the discourse The last section of this chapterprovides an overview of the structure of the book

Contemporary perspectives on Africa’s economic

growth and development

A quick review of the development economics literature suggests thatscholars (within and outside Africa) have been in continuous search

of good explanations for Africa’s growth failures as well as suitableguidelines for policy and strategic actions Many acknowledge thatthe fact that a greater part of the African continent has hithertobeen unable to build sustainable economies and remain dependent

on charity deserves serious academic attention (Maathai, 1995; Kuada,

2010) This awareness has placed Africa’s economies at the centre ofacademic investigations during the past five decades One estimateinforms that over 300 English-language journals and e-journals havebeen specifically devoted to the topic in the Western world alone(Phillips, 2003) Scholars in disciplines such as economics, sociology,

anthropology, political science and trade have all made significant tributions to an understanding of the phenomenon during the last half

con-a century

Some scholars argue in support of a re-examination of the ing economic models (Hoeffler, 2000, 2002; Jerven, 2011) Others havequestioned the statistical accuracy of Africa’s poverty descriptions Theyargue that the hitherto accepted accounting principle for GDP measure-ment all over the world is the 1993 UN System of National Accounts Butonly 35 countries in Africa were using this accounting system by the end

exist-of 2012; the other African nations continue to use earlier systems, somedating back to the 1960s The result is that most countries underestimatethe monetary worth of their economies This was the case of Ghana until

2012 when the country decided to change its national accounting tem to the 1993 UN System The decision resulted in upgrading Ghana’sGDP by 62%, pushing the per capita GDP over $1,000 and elevating it

sys-to a middle-income country.3 In a similar manner, Nigeria rebased itsGDP in April 2014 and raised the value of its economy to $509.9 bil-lion and became Africa’s largest economy and the 26th largest in theworld Barakatt and Sereke-Brhan (2010:21) also argue that “there are 16nations in Africa that have GDP per capita greater than that of China

In addition, remittances by immigrants in the U.S amount to around

$40 million per year, equal to Indian remittances The tourist inflow

to Africa is close to 25 million people every year, almost five times theannual number of tourists visiting India.” To them, this is evidence of

an undervaluation of the economies of most African countries Thus,the emerging conclusion is that SSA is not as poor as most previousGDP figures suggest

Notwithstanding the accounting errors, the economistic logic not be entirely dismissed This logic holds that economic growth isdriven by investments, savings and consumption, with people’s will-ingness to save for future consumption growing with their incomes.This implies that the poorer the people are, the less they can afford toplan for the future and save Thus, savings are normally low in poorcountries, where most incomes have to be spent to meet current (oftenurgent) needs Low savings hinder domestic investment in both physicaland human capital Without new investment, an economy’s productiv-ity cannot be increased and incomes cannot be raised This scenario

can-is commonly labelled as “the vicious circle of poverty” in the opment economics literature According to the dominant versions ofneoclassical economics, a solution to the problem lies in the ability ofgovernments to formulate and implement policies that break the vicious

devel-circle Seen from this perspective, the persistence of poverty in Africa can

be attributed to failed government policies and failed leadership.Building on this perspective, some scholars argue that those Africancountries that have benefited from the leadership of liberal economistsand introduced macroeconomic policy interventions, aimed at raisinginvestment and productivity within the private sector, have achieveddistinctive economic growth (Fosu, 2012) Some of the popular lib-eral economic policy interventions during the last three decades haveincluded the deregulation of the banking sectors of the economies,removing trade barriers, privatizing natural resources and govern-ment industries, devaluing currencies, strictly adhering to balancedbudgets, changing national laws to make the economic environ-ment more conducive to foreign investment and building up exporteconomies

Undoubtedly, these policy initiatives have produced noteworthyeconomic outcomes, and there have been some positive signs ofturnarounds in some African countries in recent years As Gatune andNajam (2011:102) remark with a distinct sense of joy, “poverty inAfrica is falling, and falling fast; food productivity is rising; inequal-ity is falling; women are assuming positions of leadership; democracyand elections are becoming the norm; regional markets are developing;anti-corruption measures are gaining prominence; Africa is becom-ing an important destination for foreign direct investment, especiallyfrom China; African intelligentsia is finding a more prominent voice

in defining Africa’s options; and continent-wide cultural expression isstrengthening a positive continental identity”

Reports on the business environment of the 20 largest Sub-SaharanAfrican countries by Spring and Rolfe (2011) as well as Spring, Rolfeand Odera (2013) have produced evidence that reinforces this positivetrend They showed that most of the countries have experienced sig-nificant positive changes in their integration into the global economy,and there have been significant increases in Foreign Direct Investment(FDI) flows in some of the countries Examples include the following:Nigeria’s FDI inflows of US$ 5.8 billion in 2009 (as against US$ 2.1 bil-lion in 2004); South Africa’s US$ 5.6 billion in 2009 (as against US$0.799 billion in 2004); and Angola’s US$ 2.2 billion in 2009 (as againstUS$ 1.45 billion in 2004) Furthermore, 12% of all FDI targeted at devel-oping countries in 2011 went to Africa, with the largest share going

to oil-producing economies such as Chad, Angola, Equatorial Guinea,

Ghana and Nigeria The Economist, which labelled Africa as “the

hope-less continent” in 2000, wrote in its December 2011 edition that “labour

productivity is now growing by, on average, 2.7% a year Trade betweenAfrica and the rest of the world has increased by 200% since 2000 Infla-tion dropped from 22% in the 1990s to 8% in the past decade Foreigndebts declined by a quarter, budget deficits by two-thirds In eight of thepast ten years, according to the World Bank, sub-Saharan growth hasbeen faster than East Asia’s (though that does not include Japan).”4These facts are quite compelling and heart-warming for all observers

of Africa’s development plight The more gratifying is that The Economist

is not alone in its analysis Research units of leading consultancy groupssuch as McKinsey have made similar observations Analysts of the WorldBank, the Standard Bank and the African Development Bank have alsoadded their voices in support

There is no doubt that these developments represent a positive breakfrom the general pessimism that has engulfed Africa for decades Thus,the 21st century has been dubbed by some futurists as Africa’s century –

a century during which Africa’s economic, intellectual, political andleadership resources will be optimally utilized to generate welfare forthe citizens and provide the continent with a positive identity withinthe world of nations The McKinsey Global Institute Report in 2010therefore concluded that global business can no longer afford to ignorethe business potential provided by these trends (McKinsey, 2010) Thesechanges also undergird Nwankwo’s (2012) observation that Africa is nowstanding at the threshold of an exciting growth era

But some commentators remind African leaders and policy makersthat it is too soon to start rejoicing – there have been false dawnsbefore in Africa’s economic history when promised miracles turned intomirages The question that sceptics ask is whether Africa will sustainthis growth momentum Said differently, the continent’s transition tomodern economic growth will thus require a break in the boom-and-bust pattern which has characterized its economic performance duringmuch of the 20th century (Broadberry and Gardner, 2013)

There is therefore a continued search for explanations for the growth predicament and new approaches to growth and development

non-on the subcnon-ontinent Approximately 210 millinon-on people still live non-on lessthan $1 a day, and the number living on less than $2 a day is expected

to rise from 400 million to some 600 million by 2015

Furthermore, the positive changes noted above do not provide theneoclassical perspectives unqualified theoretical legitimacy for explain-ing the limited growth in SSA As noted earlier, some scholars havecalled for a re-examination of the explanatory contents of these models,

arguing that they are extremely simplistic, mechanistic and istic (Hoeffler, 2000) In the views of some scholars, “inclusive growth”that provides wider access to sustainable socio-economic opportunitiesfor a broader number of people, countries or regions, while protectingthe vulnerable, is what SSA needs (Greenwood and Holt, 2008) Thiscritique is further predicated on the understanding that recent high-growth experiences in some African countries have been largely less jobcreating and less inclusive than one would have wanted, and therebyhaving limited developmental impact (ILO, 2010; Hailu and Tsukada,2011).

determin-Some preliminary conceptual clarifications

I have already indicated that the present study shares the above timents and seeks to explore an alternative explanation for SSA’s sloweconomic progress It also aims to provide some guidelines for improv-ing enterprise development and thereby accelerating the pace of eco-nomic progress on the subcontinent In doing so, it suggests that keyconcepts in the social sciences that emphasize the human side of enter-prise management and socio-economic growth must be given greaterprominence in the debate These concepts are introduced briefly in thissection of the chapter in order to provide a conceptual language for thediscussions that follow

sen-It is important to bear in mind that I write about SSA in generalterms in this book, mindful of the fact that the subcontinent is home

to over 700 distinct societies with nearly 1000 languages Najam andKariuki (2010:2) remind us that “there are many Africas and manyrealities within Africa To say anything about the entire continent is

to condemn one-self to saying only that which can be easily alized.” In the same vein, Barakatt and Sereke-Brhan (2010:15) arguethat “while it is easy and tempting to generalize about ‘one Africa’, thecontinent’s individual countries and regions face different challengesand respond in different ways, depending on cultural traditions andthe strength of local governance” Bearing these observations in mind,

gener-I aim to undertake the academic endeavour outlined here with ence for the diversity within the subcontinent but with the hope thatthe commonalities in historical and developmental experiences are largeenough to warrant some degree of generalization I also hope that thediscussions will enrich our understanding of what factors can propeldevelopment in the individual countries and across them

rever-Economic growth and development

I have suggested above that the theories and models which developmenteconomists have drawn on to explain the nature and causes of economicprogress and how economic growth is linked to poverty alleviation havebeen rooted in two contrasting paradigms One is the neoclassical eco-nomic paradigm that gives support to the notion that economic systemscan be likened to machines that transform inputs into outputs The keydrivers of economic progress are, therefore, symbolically described as

“engines of growth” I find it expositionally appropriate to label this

perspective as hard economics The ultimate presumption underlying this

paradigm is that all human beings are rational, self-interested actors inthe economic game They seek to maximize their values in the actionsthat they undertake, are boundedly rational and exhibit negative oppor-tunism (see Alacevich, 2007) This perspective has been criticized byseveral social scientists and economists during the past three decades.They argue that the assumptions underlining neoclassical economicsare deficient because they under-represent the importance of interper-sonal and other non-market resources in human motivation Instead,they see economic decisions as social and political constructions thataccommodate intangible needs, expectations and behaviours of indi-viduals and communities of people (see the writings of scholars such

as Abramowitz, 1986, and Harrison, 2006) I label this as soft economics.

The two paradigms, however, share the desire for poverty alleviation

in human societies and agree with Robert McNamara’s description ofpoverty as “condition of life so degraded by disease, illiteracy, malnu-trition and squalor as to deny its victims basic human necessities and acondition of life so common as to be the lot of some 40% of the peoples

of the developing countries”.5But they differ in their understanding ofthe roots of poverty and approaches to poverty alleviation

The divergence in perspectives championed by the proponents ofhard and soft economics is reflected in debates between leading devel-opment economists during the last half century It is also a debate about

the meaning and constituents of economic growth and development

Fol-lowing Hirschman (1963), the term “development” implies the process

of change from a less developed type of economy into some other moreadvanced type Implicit in his understanding, and those of many otherdevelopment economists, is that development results in poverty allevi-ation It also connotes the goal of “enlarging people’s choices in a waywhich enables them to lead longer, healthier and fuller lives” (Ranis,Stewart and Ramirez, 2000:197) In other words, development provides aqualitative interpretation of economic growth – that is, growth must be

converted into social change that benefits the poor for it to be described

as development-oriented

Building on these perspectives, scholars have also vigorously debatedwhether social development is a necessary requirement for economicgrowth or vice versa An example of this debate is between two lead-ing Indian economists – Amartya Sen and Jagdish Bhagwati WhileSen believes that India should invest more in its social infrastructure(including health and education) to improve human capabilities as pre-requisites for increased productivity and growth (Sen, 1981), Bhagwatiargues that only a focus on growth can yield enough resources for invest-ing in social sector schemes – that is, seeing growth as a prerequisitefor social development (Bhagwati and Panagariya, 2013) The prevailingunderstanding therefore is that there is a dual link between economicgrowth and economic development – economic development providesthe necessary conditions for economic growth and growth producesresources necessary for economic development

I see development in this book as an issue of poverty alleviation

I therefore agree with Ranis, Stewart and Ramirez’s (2000) view thatpoverty alleviation must be reflected in qualitative changes in the lives

of many people in a given country or society There is, therefore, a linkbetween economic growth and poverty alleviation But growth alone

is insufficient to advance human development; it must be backed up

by pro-poor policies that require good governance and institutionalmechanisms to work well I will argue further that private enterprisedevelopment is a viable approach to poverty alleviation in Africa, since

it creates jobs and allows people to support themselves economicallywhile providing governments with revenues required for financingpro-poor initiatives

Sociocultural resources and human capability development

Another important set of concepts that I have used extensively in

this book are sociocultural resources and human capability development.

Arguments underlying their relevance to SSA’s economic progress arepresented more elaborately in subsequent chapters of this book Butlet me present the premise of my arguments in a succinct form in thissection

Following Friedrichs and Boter (2009), cultural traits, along witheconomic and institutional characteristics, are important for attainingpositive economic development and stimulating new business creationand entrepreneurial activities When people interact with each other,they cultivate a sense of understanding that shapes the evolution of

their relationships The shared experiences allow them to form similarperceptions that they jointly reflect on The experiences also encour-age them to explore common solutions to challenges that they face

in their lifeworlds This enables them to nurture common values andnorms that regulate their coexistence and help them cultivate strongerdesires to collaborate Sociological and anthropological studies use theconcept of “social resources” to describe the complex set of “goodwill”that these interactions produce over time in a given community orsociety Adler and Kwon (2002:17) describe it as “the goodwill that isengendered by the fabric of social relations and that can be mobilized

to facilitate action” It is referred to in some conceptualizations as social

capital (Burt, 1992; Portes, 1998) I describe them as sociocultural resources

Another related concept is human capital, which is usually defined

as a product of deliberate, planned and purposefully directed educationand training (OECD, 1998) It is generally argued that the quality of asociety’s labour force is an indicator of the level of its human capital

development The concept of human capability development adopted in

this book is linked to the notion of human development and humancapital

But human capability development is more than human capital inthe sense that it enhances a society’s capacity to absorb new knowledge.This is a very important qualification that must be stressed To be spe-cific, I use the concept of human capability development in this book as

a summary construct that describes the individual and collective bilities found in a society that enable the citizens of that society to livecreatively and progressively When the cultural values and norms of asociety permit its citizens to question existing ways of doing things,their minds become more open and they are more likely to discover

capa-wider range of opportunities within their immediate environments andbeyond They are also more capable of exploiting these opportunities

to enrich their individual lives as well as those of thousands of others.Thus, human capabilities guide people to make prudent choices within

a plurality of possible options in an increasingly globalized world Thismeans the higher the level of human capability of a society, the greaterits development potential

I will discuss the constituents of the human capability developmentconstruct in greater detail in Chapter 5 I will also argue subsequently

in this book that human capability development requires the tion of transformational and visionary leaders in groups, organizations,communities and/or societies The presence of such leadership capac-ity ensures that “capable people” are guided and encouraged to makeconsequential choices that move their societies forward and may evenchange aspects of their cultures Thus, in my view, human capabilitydevelopment combines with social resource composition to form thefoundation of any sustained economic development in a given society

facilita-Positioning the study within contemporary development discourse

The sociologically inspired concepts forwarded in this book are in linewith the “non-economistic” logic (i.e what I label as “soft economics”)that an increasing number of development scholars now subscribe to.Scholars such as Adelman and Morris (1967), Abramowitz (1986) andHarrison (2006) have wondered why some communities appear to havethe innate ability to easily mobilize resources, while others (includ-ing SSA countries) never seem to get organized enough to managethe resources of the community To many of these scholars, a plausi-ble explanation lies in the differences in the social, institutional andcultural structures of the nations This means that the slow economicgrowth may not be exclusively due to the failure of SSA countries tomake effective use of the tangible resources at their disposal but ratherdue to the constraints imposed by intangible (or soft) resources – that

is, constraints imposed by demands and expectations embedded in thecivil society as well as the pervasiveness of growth-disabling cultural val-ues (Moore, 1997) For example, differences in how national culturesdefine what it means to be a worthy person and differences in how wor-thiness is signalled have been applied to explain variation in levels ofbusiness development These observations have not received the promi-nence that they deserve in previous studies in development economics

because they have been presented in a “catch-up” argument oned by modernization theorists Following Inglehart and Baker (2000),modernization was widely viewed as a uniquely Western process thatnon-Western societies could follow only in so far as they abandonedtheir traditional cultures and assimilated technologically and morally

champi-“superior” Western ways.6

One of the chief proponents of this perspective in the 1960s wasWalt Whitman Rostow (1960), who later became a special assistant toPresident Lyndon Johnson In the words of Thompson (2001:5), “thegeneral proposition taken by Rostow, and others, was that in order toproduce and consume like the wealthy, one had to change ‘traditional’cultural attributes and proceed in orderly fashion to achieve a ‘take-off’into sustained development” The discussions presented in this bookpart company with this modernization view of economic growth anddevelopment

My perspective is however consistent with the distinction drawn in

development economics between deeper or fundamental determinants

of economic growth and development on the one hand and the imate conditions for economic growth and development on the other.

prox-The most commonly identified candidates of “deep” or fundamentaldeterminants of growth in the economic development literature aregeography (location), integration capabilities (trade) and institutional

quality This book introduces human capability development as a more

important candidate to this set of fundamental determinants The imate determinants refer to the conventional factors of production inneoclassical economic literature – that is, capital, labour and technol-ogy (Rodrik, 2002; Bloch and Tang, 2004) The emerging understandingfrom this strand of research is that human characteristics are fundamen-tal determinants that affect development, and these characteristics aretransmitted from one generation to the next within populations in thelong run History is therefore an important source of knowledge in anyanalysis of economic achievements (Spolaore and Wacziarg, 2013)

prox-I have based my perspective on results of earlier research prox-I have taken into various aspects of enterprise management and economicdevelopment in Africa during the past three decades These resultssupport the understanding that the sociocultural context of economicactivities constitutes a set of key variables in analysing growth directions

under-of SSA economies They also show that the process under-of economic opment is guided not necessarily by a single “vision” or a model that iscommonly agreed upon but mostly by individual and collective actionsbased on what appears sensible to the citizens of any country, given

devel-their circumstances This perspective is also in line with emerging standing within some multilateral development organizations such

under-as the United Nations Development Programme, which sees oriented economic development (COED) as an “emerging paradigm,integrating the symbolic and creative elements into any aspect of aneconomy, pursuing distinction, innovativeness, and a higher level ofinteraction between localised individual and collective knowledge andglobalising markets” (UNDP, 1994:2)

culture-I will, however, argue subsequently that while some culturally derivedhabits of thinking and behaviour found in African societies are positiveand promote economic development, others constrain development

It is necessary for every growth-loving African society to be guided more

by the development-enhancing patterns of behaviour and consciouslydiscourage the development-constraining attributes I will also argue insupport of the view that although cultures are dynamic by themselves,their dynamism can be gently managed to support a path of inclusiveeconomic development I am therefore willing to question the existingground rules for organizing economic activities in Africa

Managing the human side of economic activities

Apart from drawing attention to the contribution of human ity development and sociocultural resource mobilization to enterprisedevelopment and economic development in SSA, this book seeks tomake three additional contributions to the extant literature on eco-nomic development First, I revisit discourses on entrepreneurship andenterprise development in SSA countries Granting that entrepreneursengage in gap-filling, input-completing and value-innovative activitiesthat propel economic growth in all countries, strong enterprise devel-opment initiatives can set an upward mobility spiral in motion in SSA.Second, I argue that the concept of management in general (and leader-ship as well as governance in particular) is important to any meaningfuldiscussion of economic development in Africa Third, I forward the viewthat SSA will be economically best off if its companies, institutions andstates are embedded within the global community of businesses andnations rather than outside it

capabil-Structure of the book

The book is divided into five parts Part I consists of five chapters.

Chapter 1 is the Introduction Chapter 2 provides an overview of the

pre- and post-colonial political history of SSA and how the historicalevents during this period have shaped macro-level institution building

as well as leadership and governance structures of the nations It informsthat much of the Sub-Saharan African subcontinent had been colonized

by seven European countries – Britain, France, Germany, Belgium, Spain,Portugal and Italy It discusses events leading to independence strug-gles in the various SSA countries, the characteristics and ambitions ofthe immediate post-independence leaders, their leadership styles, theinstitutions and governance systems they built and efforts made todevelop human capital in the young nations It also provides descrip-tions of political development in three SSA countries – Ghana, Kenyaand Namibia – representing western, eastern and southern Africanregions, respectively The final section of the chapter reconfirms the pos-itive developmental experiences of a dozen or so SSA countries duringthe past decade

Chapter 3 brings together and discusses factors that have entered theeconomic development debate as possible explanations for the currenthigh growth rates noted in some SSA countries It also explores theextent to which these high-growth countries can spearhead a new cycle

of growth on the subcontinent as a whole and discusses the extent towhich the current explanations embrace or ignore the human factors ofeconomic growth and development Put together, Chapters 2 and 3 pro-vide an illustrative description of the context within which enterprisedevelopment and economic growth policies in SSA must be understood.Chapter 4 provides an outline of the neoclassical economic perspec-tives and their critiques It also highlights the sociological, cultural andinstitutional economic perspectives that have informed my thinking

I have also introduced the neo-Marxist-inspired critiques in this chapter.But since this book focuses more on the managerial and socio-economicarguments rather than the political economic perspective on develop-ment, I have taken the liberty of simply nodding to this strand ofresearch

Chapter 5 presents a general theoretical framework/model that hasbeen the pivot of my research during the past three decades In themodel, I argue that human capability development is a fundamen-tal (deep) determinant of enterprise development in SSA This, inturn, drives sustainable economic development The model also positsthat human capability development process is shaped by complexinteractions among four main factors: (1) culture and civil societalcharacteristics, (2) institutional quality and capabilities, (3) manage-ment/leadership and governance capabilities and (4) global orientation

and integration The discussions in the subsequent parts of this bookhave strengthened my conviction that the four factor conditions pro-vide a useful framework for organizing and debating the opportunitiesand challenges of enterprise-led poverty alleviation initiatives in SSA.

The discussions in Part II forward and elaborate on the view that

the role of culture in the economic development process has beendownplayed in the contemporary economic development literature,presumably because such “soft” factors are very difficult to measureand to disentangle from other kinds of variables It consists of fourchapters – Chapters 6–9 Chapter 6 introduces the concept of cultureand the theoretical arguments that support the link between cultureand economic growth and the manner in which cultural changes canstimulate transformational development through changing the mindset

of the members of a society and establishing a collective will to lenge the existing ways of behaviour Chapter 7 discusses the concepts ofsubcultures, networks and trust It argues that most macro-cultures areheterogeneous or even fragmented Thus, networks, trust and commit-ment among individuals and subcultures help to maintain some degree

chal-of stability and allow for gradual change processes in most societies.Chapter 8 introduces the concept and theories of organizational cul-ture and links them to systems and processes that encourage enterprisedevelopment and growth Chapter 9 provides a summary of the argu-ments of the previous chapters and relates them to the Sub-SaharanAfrican context It draws attention to the dominant characteristics ofAfrican culture, discussing their human capability development poten-tial as well as their growth-enabling and constraining implications

It also draws attention to the positive changing trends in the Africanculture, signifying greater hope and providing living testimonies ofAfricans’ capacity to harness their inner energy and potential to trans-form the subcontinent It does so without underrating the fortitude ofthe challenges ahead

Previous studies of leadership in Africa have portrayed Africans as sive and subservient to their leaders, behaving collectively just like theobedient African child who dutifully fetches a cane to his father to beat

pas-him for an offence he is not too sure about Part III explores these claims

by examining the anatomy of dominant African management and ership preferences as well as the governance arrangements that helpregulate behaviours within societies, organizations and firms It revisitsthe arguments that justify the inclusion of leadership and governance

lead-as one of the four sets of factor conditions for human capability opment in SSA It also seeks to uncover the emergent positive changes

devel-in African management and outldevel-ines the factors that encourage thesechanges.

Part IV is devoted to the discussion of the rich and diverse

perspec-tives on entrepreneurship as a construct and the strategies and cesses of managing small businesses It also discusses the link betweenentrepreneurship to creativity, leadership, learning, innovation and eco-nomic growth in general and interrogates the challenges of enterpriseformation and management in the continent

pro-Part V examines internationalization and integration of SSA

economies into the global economic system as a contributing factor tothe economic growth and development process It draws on the grow-ing awareness among policy makers that diversification of export baseremains critical to Africa’s long-term economic growth and shows thatintra-African trade has done even more poorly, accounting for only 12%

of Africa’s international trade in 2009 This compares poorly with ations in other developing regions, including Asia and Latin America.The last chapter rounds up the discussions, providing highlights of thecentral issues and reflecting on issues requiring additional theoreticaland empirical attention

et al., 2007) Some scholars blame Europe for most of the problems.

It has been argued, for example, that by redrawing the map of SSA andthrowing diverse people together without consideration of potentialsfor ethnic conflicts and other challenges of social-space management,Europe has sown the seeds of conflict, destabilization and decline onthe subcontinent (Austin, 2010) There are also those who attribute themodicum of modernity found in parts of SSA to colonization and itsrelated European influence (Dumont, 1969) The divergences in opinionappear irreconcilable and have defied sober reflections I do not intend

to provide such a reflection in this chapter but merely offer an overview

of the main issues that have occupied the centre stage of the rary debate and trace aspects of the colonial heritage and its impact oncontemporary developments in the subcontinent

contempo-Apart from the colonial period, historians have divided the independence history of SSA into three fundamental phases, and thesewill guide the structure of this chapter The first is the 1960s whenseveral of the countries attained independence (with Ghana being thetorchbearer in 1957) up to the middle of the 1970s The period wasmarked by attempts by the first-generation political leaders to consol-idate their personal powers and economic privileges The second was

post-19

the era of military regimes (from the mid-1970s to the middle of the1990s).1 The third phase started in the mid-1990s and marks the era

of democratic experiments I will not follow this timeline rigorously inthe discussions since the periods overlap each other in individual coun-tries I will rather draw attention to the main tendencies over the last sixdecades and show how they seem to influence macro-level policies andactions

The colonial project

The historical records show that Britain and France were the mainEuropean countries with colonies in SSA Britain had 16 colonies whilethe French had 14 Italy, Portugal, Germany, Spain and Belgium alsohad a few colonies The general understanding in historical and polit-ical science literature is that SSA’s colonization has been triggered byboth economic and political considerations The subcontinent’s hugequantity of natural resources, including diamonds, gold, iron, cobalt,uranium, copper, bauxite, silver and petroleum, has been part of theattraction For example, Belgium’s king Léopold became one of the rich-est men in Europe by the end of his 23-year reign by exploiting theCongo’s huge mineral resources Some accounts indicate that by 1959Congo was producing nearly 10% of the world’s copper, 50% of itscobalt and 70% of its industrial diamonds Land was the second majorattraction in some of the colonies Historical evidence shows that hugeportions of land in Eastern and Southern parts of Africa were taken over

by European settlers, compelling Africans to sell their labour to themvery cheaply just to fulfil their existential needs

In terms of political leadership, the preponderant evidence is that thecolonies were governed undemocratically (Davidson, 1966; Meredith,2006) Decisions and policies were made with little or no input fromthe African peoples The systems of administration, however, variedamong the colonial powers Britain was reputed for adopting a so-calledindirect rule – a pragmatic administrative system that reduced admin-istrative resources but centralized all decision-making powers, therebydisenfranchising the local population In practice, Britain had three lev-els of administration in its colonies – central, provincial/regional anddistrict There was usually a governor or governor general in the colo-nial capital who governed along with an appointed executive counciland a legislative council The governor was responsible to the colo-nial office and the colonial secretary in London, from whom laws,policies and programmes were received The provinces were headed byprovincial commissioners or residents, and the districts were headed by

district officers or district commissioners The “indirect” part of the tem was labelled “native authority” which included the “native courts”,which purportedly administered “native law and custom” In practice,the native authorities exercised “authority” at the mercy of Europeancolonial officials.

sys-The French adopted the policy of assimilation – considering theirAfrican colonies as individual parts of France and making the localpeople “black Frenchmen” But instead of absorbing the colonies admin-istratively and culturally, assimilation became association in practice,with the colonized regions becoming partners rather than integral parts

of France (Chafer, 2002)

Available evidence also suggests that relatively limited resources werespent on the development of human capital in the colonies The overallprimary school enrolment rate in SSA in the early 1960s averaged 42%,compared to a nearly 100% rate in the Organisation for Economic Coop-eration and Development (OECD) or East Asian countries (Appelton andTeal, 1998) This means that just a handful of Africans had any for-mal education in the colonies by the beginning of the 1960s Meredith(2006) informs that only 35 Zambians had secondary school education

in 1960 and the figure in Malawi was 28 Furthermore, there was only asingle Kenya lawyer in 1956 while the figure in the Gold Coast was 60when the country became independent in 1957 It is therefore not sur-prising that about 80% of all civil servants in SSA were British, French

or Portuguese expatriates (ibid) Thus, at independence, SSA countriesinherited bureaucracies and economies that did not have the capacity

to meet the tremendous political and economic challenges that theyfaced

The economy was also undeveloped It is true that European ers introduced cash crops such as cocoa, tea, banana, rubber or cottonthat served the needs of consumers in their home countries But thismeant that the economies they created were mono-product-orientedand highly dependent on European market conditions At the sametime they controlled nearly all commercial activities, both imports andexports between Europe and the colonies This meant that inter-Africantrade was not developed and the economies were managed more likeislands lying off the coast of the seven Western European colonizersthan like parts of a single continent Furthermore, the colonial eco-nomic policies were found to be prejudiced against the establishment

farm-of industries in Africa, outside farm-of agriculture and the extractive spheres

of mining and timber felling There is some evidence suggesting thatdeliberate efforts were made by colonial administration in the differ-ent colonies to thwart efforts made by foreign and local people to

initiate industrial development.2Thus, scholars such as Austin (2010:14)forward the view that colonialism failed SSA because it did not introduce

a full-blooded capitalist system, based upon private property In his view,the establishment of a capitalist system could generate local pressuretowards competition and accumulation necessary to drive self-sustainedeconomic growth

Immediate post-independence political developments

In spite of the institutional and human capital deficiencies, the generation African leaders had high hopes and ambitions for theirindividual nations and the subcontinent as a whole Leaders such asKwame Nkrumah of Ghana had an ambition of building the subcon-tinent into a giant political, economic and military force that couldcompete on equal terms with Europe, the United States and the SovietUnion on the global scene (Davidson, 1966) In the words of Meredith

first-(2006:163), Nkrumah’s political efforts were devoted to creating a United Africa, “drawing its strength from modern science and technology and

from the traditional African belief that the free development of each isconditioned by the free development of all” Similarly, Julius Nyerere ofTanzania was prepared to delay the independence of his country if theresult would be to expedite the independence of neighbouring Kenyaand Uganda so as to form a Federation of East Africa together

The citizens of the newly independent nations endorsed these tions and therefore applauded and saluted their African leaders, seeingthem as personifying their dreams and aspirations of a new Africa

ambi-It turned out, however, that the leaders were unwilling and unable tobuild political capital and create developmental governance in theircountries Many of them were bluntly despotic They established sys-tems of personal rule, encouraged personality cults and tolerated neitherdissent nor criticism (Davidson, 1966) For example, Houphouét-Boigny

of Ivory Coast was reported as saying that “democracy is a system ofgovernment for virtuous people” and his country needed “a chief who

is all-powerful for a specified period of time” (Meredith, 2006:165) larly, Banda of Malawi was quoted as saying that “[a]nything I say is law

Simi-It is a fact in this country” (ibid, 2006:165) They all acted in contempt ofconstitutional rules and agreements of their countries – either amending

or rewriting the constitutions at will or simply ignoring them.3

Their preferred leadership style turned out to be “neopatrimonial” orwhat others refer to as “clientelism” (Callaghy, 1987) This approach

to political leadership is described in the political science literature

as characterized by personalized political authority, weak institutionalchecks on the private appropriation of public resources and patronagenetworks (Hyden et al., 2000) It also meant that leaders even at lowerlevels of the political hierarchy gave high priority to the short-terminterests of narrow constituencies and political clientele at the expense

of longer term social welfare

The despotic inclinations of these leaders meant that there were nomeans of peaceful change of government in the countries Coup d’etatstherefore became a principal vehicle for change Once it started in Togo

in 1963, coups spread like a wild African bushfire throughout the continent The period between 1960 and 1970 and slightly beyond hastherefore generally been called the “decade of coups” in Africa, withtwo or more coups per year By the beginning of the 1980s, only IvoryCoast, Botswana, Kenya, Tanzania, Senegal and Zambia had no coup atall (Panabel, 1984)

sub-The military leaders justified their interventions by the economic lapse of the countries, arguing that it was their national and patrioticobligation to rescue the countries Nevertheless, the military regimesturned out to be more corrupt, oppressive and downright inefficientthan their civilian predecessors

col-The early 1990s marked a break from the civilian and military tatorships in SSA, with most of the countries embarking upon newdemocratic political experiments (Bratton and van de Walle, 1997) Up

dic-to 41 countries held elections between 1989 and 1994 However, thesustainability of the political reforms of the 1990s has been challenged

by a new wave of coups and post-election violence in countries such asMali, Guinea Bissau, Burkina Faso and Kenya It is increasingly acknowl-edged that elections alone do not make democracy Issues of citizenempowerment and inclusiveness in social-space management as well asthe development of robust institutions to protect fundamental humanrights and freedom of expression are now positioned at the centre stage

of the political discourse in SSA and are seen as essential ingredients forsustainable societal development

Economic experiences

As noted in Chapter 1, SSA countries are among the poorest nations

of the world today Some economic analyses have shown that in aspace of three decades (between 1960 and 1990) real incomes fell byover 35% relative to incomes in other developing regions (Agbor, 2011;Fosu, 2012) Countries such as Burundi, the Democratic Republic of

the Congo, Rwanda, Sierra Leone, Zambia and Zimbabwe have becomepoorer in 2015 than they were at independence.

Economists have provided various explanations for this weak mance Fosu (2012:4) argues that such policy mistakes as “state controls,adverse redistribution, suboptimal inter-temporal resource allocation,and state breakdown” have been among the major causes He arguesthat had this not been the case, economic growth could have been 2%points higher during the period

perfor-Fortunately, recent economic records suggest a positive turnaround.Twenty-four SSA countries have more than doubled their per capitaincome over 1990–2010, and about 12 of them have achieved averagegrowth rates of 6% (African Development Bank Report, 2014) Seven ofthe ten fast-growing economies globally in 2014 were from the subcon-tinent A middle class is emerging in most of these countries, and manypeople are moving from the rural areas to live in urban areas while phys-ical and social infrastructural services have significantly improved inmany rural communities One estimate suggests that in 2014, 60 millionAfrican households had annual incomes greater than $3,000 at marketexchange rates

But these significant growth records have not translated effectivelyinto poverty reduction The available evidence suggests that on the aver-age poverty has declined rather slowly – 0.5% annually in SSA between

1990 and 2008, compared with 2.3% in East Asia and 1.0% in South Asia.The incidence of poverty has been found to be highest in the rural areas.Rural poverty was shown to have fallen by 5.1% between 1998 and 2008,far less than the 68.8% in Latin America and the Caribbean, 51.4% insouth-east Asia and 45.5% in the Middle East and North Africa (AfricanDevelopment Bank Report, 2014) These challenges have renewed callsfor policy reforms that can strengthen private enterprise development

in the subcontinent

The next section of this chapter provides an overview of politicaland economic developments in three SSA countries – Ghana, Kenyaand Namibia This provides additional evidence of how colonial andpost-independence events have shaped economic developments in SSA.Together they serve as a useful reference point for the subsequentdiscussions in this book

Ghana

Political history

Formal colonization of the Gold Coast started on 24 July 1874 whenthe British proclaimed it a crown colony The decision did not go

down well with the local elites who decided to organize themselves

in order to formally protest against what they saw as injustices of thecolonial administration – for example, lack of economic opportuni-ties for the local citizens, restrictions on cultural practices and nakedexploitation of the country’s natural resources Their activities gainedmomentum when the Lands Bill of 1894 was passed into law Thelaw was ostensibly aimed at preventing local citizens from giving landsnot belonging to them to European concessionaires However, its con-tent and wording gave the colonial administration authority over allland in the colony, thereby denying the local citizens rights of own-ership This marked the beginning of 60 years of organized nationalistagitation on the Gold Coast The protest organization, which came to

be known as the Aborigines Right Protection Society (ARPS), demandedrepresentation of local citizens on the law-making body in the colonyand intensified its political agitations after World War II with demandsfor independence As a result, the British were forced to hold parlia-mentary elections in 1951 and again in 1956, with the ConventionPeople’s Party (CPP) winning in both cases On 6 March 1957 theGold Coast was declared independent with Kwame Nkrumah as thefirst prime minister The stage was set for a new life, full of hopes andexpectations

But the hopes and dreams of the citizens quickly turned into mares Nkrumah created a single-party system and appointed himself alife president He was reputed for running the country as if it were hispersonal property, making and unmaking laws at his discretion – thenotorious one among them being the Preventive Detention Act (PDA).The Act enabled the police to arrest any person who seemingly dis-approved any government action or decision Many politically activecitizens found themselves in jail under the PDA Human rights viola-tions combined with economic hardships to turn ordinary Ghanaiansagainst the Nkrumah government, thereby providing a justification forGhana’s first coup in February 1966 After this date, the civilian gov-ernments witnessed quick exits and the military led the country for acombined period of 23 years between 1969 and 1992 without producingsignificant and positive changes within the country’s political cultureand economic life

night-In 1992, under the pressure of the international community, the tary leader of the time, Jerry John Rawlings, agreed to return the country

mili-to democratic rule after ten years of military administration He tested and won the presidential election in November 1992 and wasre-elected in December 1996 for a second term Rawlings was succeeded

con-in 2002 by John Kofi Agyekum Kufuor This transition of power was

the first peaceful democratic change of government in Ghana since thecountry’s independence in 1957 Kufuor was re-elected in 2004 for a sec-ond The presidential election was also held in December 2008 and waswon by John Evans Fifii Atta Mills, who died in office on 24 July 2012and was succeeded by John Dramani Mahama, his vice-president, whoalso won the presidential elections in 2012.

Today Ghana is seen by observers at home and abroad as an opensociety and with a vibrant media It scores high on measures of civilliberty, political rights and political stability among other nations onthe West African subcontinent

Post-independence economic experience

Ghana’s economy has been described as relatively sound at the time ofindependence (Apter, 1972; Agbodeka, 1992) But the heightened expec-tations that pre-independence nationalist agitations brought aboutcompelled Nkrumah to hurry the pace of economic development afterindependence Jobs had to be created, infrastructure developed anddependence on imports reduced

Nkrumah’s economic policies were rooted in his neo-Marxist ical inclinations that recognized the state as the legitimate custodian ofnational wealth This ideology seems to guide successive governments(both civilian and military) to support dominant state involvement

ideolog-in the economy The ideological legitimacy aside, Ghanaian economicpolicy makers appear to have endorsed the view that in the absence

of a dynamic middle class, the state must assume the ity of capital mobilization and development Any attempt at basingGhana’s economic policies on market guidelines or inviting foreigninvolvement in the economy was branded as an unpatriotic surren-der to external interests (Gyimah-Boadi and Jeffries, 2000) Nkrumahadopted a mixture of policies that was described by Hutchful (2002:15)

responsibil-as a cocktail of “colonial paternalism, nationalism, Pan-Africanism,Marxist modernism, European welfare statism, traditional Ghanaiancommunitarianism and redistributionism”

In practical terms, the implementation of Nkrumah’s economic cies made most Ghanaians passively dependent on the state as amajor employer and dispenser of social goods and services It alsomeant that kinship relations with top politicians and civil servantshave enabled a limited segment of the society to make enormousquick returns by off-loading imported goods on the black market,particularly in the 1970s and early 1980s when import licenses wereissued under the pretext of import restriction Corruption, therefore,

poli-flourished within the public sector Public property became

euphemisti-cally termed as abandea (an Akan expression), with the connotation of

a “free good” This, by inference, meant that such properties could bestolen, abused or destroyed with no direct consequence to the indi-vidual The machinery of control within the public sector was alsorendered non-operative since those who would normally be expected

to enforce the formal rules of behaviour were also involved in thepractice

Partly for these reasons, the immediate post-independence optimism

of the 1960s became quickly replaced by rapid economic decline, highrates of inflation and unemployment Real GDP per capita fell steadilyfrom the early 1970s to the end of the 1980s The stagnation or declinewas evident in all the productive sectors of the economy The statebudget was consequently destabilized as a result of the low ebb of eco-nomic activities For example, cocoa duty which accounted for 37%

of government revenues and grants in 1970 fell to 0.8% of the 1980real value (Loxley, 1988) At the same time, the population was grow-ing at an annual rate of 3% (with the urban population growing atabout 5%) The pressure on the supply of all goods and services led

to a rapid rate of inflation, which reached 120% annually in the early1980s

A policy turnaround came about in 1984 when the Rawlings militarygovernment accepted to implement an Economic Recovery Programmeunder the auspices and support of the World Bank and the InternationalMonetary Fund (IMF) Deliberate policy initiatives were taken to encour-age foreign direct investments (FDIs) in the country The results of thispolicy change have, however, been mixed By the early 1990s, Ghanawas acclaimed by the World Bank and other international economicmonitors to be at the thresholds of economic lift-off A decade or solater, these claims disappeared and Ghana opted to join the unenviablelist of Heavily Indebted Poor Countries (HIPC), a debt-servicing reliefinitiative from the World Bank

Today, Ghana again appears to be at the threshold of an economicand political take-off It has been ranked the fourth investment desti-nation in Africa by the African Business Panel survey of 2011 and theseventh largest recipient of FDI in 2011.4 The Global CompetitivenessIndex (GCI) Report 2011–2012 on Sub-Saharan countries ranked Ghanahighest in Institutional Capacity and Goods Market Efficiency.5Trans-parency International’s 2011 Corruption Perceptions Index (CPI) ranksGhana 69 out of 183 countries (8th in SSA) These are impressive records

by SSA standards

Political history

The British declared Kenya as a colony in 1920 after nearly half a century

of unsettled rivalry with the Germans in parts of the country It formed alocal legislative council to administer the colony and denied the power-sharing demands from Indian settlers as well as the local Kikuyu tribalgroup (the two non-European groups that were politically active andorganized at that time) Just like in Ghana, the colonial administratorspassed land-appropriation laws, including the “Land Alienation Act”,which allowed the European settlers to lease Kenyan lands for up to

999 years These laws sparked emotional resentments from Kenyans, andthis led to the formation of the first Kenyan nationalist movement in

1944 (Kenya African National Union), dominated largely by the Kikuyu.Since the pre-independence era of political agitation, Kenya’s polit-ical landscape has been dominated by two political parties One isthe Kenyan African National Union (KANU), which united mainlyKikuyu during its formative years but received significant support fromLuo-intellectuals and had Jomo Kenyatta, a Kikuyu, as its leader Thecompeting party, Kenya African Democratic Union (KADU), broughttogether a number of the smaller ethnic communities, including theKalenji and Taita, and was formed to compete against the Kikuyu/Luodominance of KANU Its political agenda was to create a federal form

of government KANU and KADU merged after independence But thedismissal of the Luo leader Oginga Odinga as vice-president three yearslater angered the Luo MPs, and 29 of them rallied around Odinga toform a Luo-dominated party, the Kenya Peoples’ Union (KPU) The newparty was banned in 1969 by the KANU (Kikuyu)-dominated parliament

on the pretext of curbing disturbances in the Luo regions of the country.Kenyatta ruled Kenya in an increasingly autocratic and unilateralmanner, with increased restrictions on freedom of expression of dissent-ing views both from within KANU and from outside the ruling elite TheKenyatta administration is looked upon by many Kenyans as a periodduring which the Kikuyu were privileged in the Kenyan society Havingmembers of their ethnic communities in influential positions within thegovernment and the public institutions, the Kikuyu are believed to havehad easier access to opportunities and resources that made their socialmobility relatively easier When Daniel arap Moi (a Kalenji) took overthe leadership of KANU after the death of Kenyatta in August 1978,the Kikuyu support declined and the Kalenji became KANU’s ethnicbedrock The Moi era is seen in the same light, giving the Kalenji people

an unequal advantage over people from the other ethnic communities

Two decades of single-party administration have produced a blance of stability in Kenyan politics and reduced the incidence ofethnic conflicts But ethnicity resurfaced with a greater degree of inten-sity when the country initiated multiparty democratic political reforms

sem-in the early 1990s The worst sem-incident to date has been the post-electionethnic conflicts in 2007

In August 2010, Kenya adopted a new constitution that provides for

a shift in governance, with legislative and executive responsibilitiesshared between the national and 47 county governments At the centrallevel, the executive is autonomous from the legislature The legislaturehas moved from one to two chambers with a 350-member nationalassembly and a 68-member senate, with the senate assuming the respon-sibility of protecting the devolved structures The judiciary has also gonethrough a series of reforms, including competitive appointment of allsenior judges, vetting of judges and magistrates The expectations arethat this new structure will provide some degree of political stability andreduce the temptations of ethnic concerns derailing national politicalprojects and agenda

Economic history and experience

Kenya is one of the privileged few SSA countries that have enced stable and relatively strong economic growth up to the late1980s Since independence it has relatively successfully pursued a mar-ket economic growth policy which resulted in substantial increases (byAfrican standards) in the per capita income despite a notably highrate of population growth of 4% per annum But the rapid economicgrowth has not conferred improvements in living standards to all seg-ments of the population The disparity between the incomes of the ruralpeasant households and the urban non-farming sectors widened afterindependence

experi-Some scholars classify the Kenyan economy as neocolonial, arguingthat Kenyan politicians and policy makers have not done much to breakaway from its colonial past but have rather expanded the colonial eco-nomic structures to accommodate the needs of a growing nation (seeOchieng, 1992, for a discussion) An example of the colonial economicheritage is Kenya’s heavy dependence on coffee, tea and tourism Thedrastic fall in coffee prices in the 1980s combined with some decline intourist earnings and high oil prices led to balance of payment problems

A second example is the domination of European and Asian capital.European investments concentrate on the large-scale industry end whileAsians have captured the small- and medium-scale sectors, particularly

in the areas of production of clothing, furniture-making, printing and

soap production The agricultural sector therefore remains the majorsource of income for a greater proportion of the African population.The Kenyan economy registered improved performance in recentyears, with an annual GDP growth of 4% and 5% between 2010 and

2015 Similarly, inflation has remained single digit over the same period.There is an increased investor and business confidence in the wake ofthe peaceful March 2013 elections and anticipated political stability.The overarching challenge Kenya is facing today is to generate eco-nomic growth that is more inclusive in order to more effectively reducepoverty across the country To achieve this, it is generally acknowledgedthat private-sector activities must be stimulated through the establish-ment of business-friendly environment and the enhancement of localskills through investments in human capital

Namibia

Political history

Namibia started its colonial history from 1884 when it came underGerman administration and was named “German South West Africa”.Being the only German colony considered suitable for white settlement

at the time in Africa, Namibia attracted a large influx of German tlers, increasing from 3,700 in 1903 to 13,000 in 1910 The colonizationwas fiercely resisted by the Namaqua tribe under the leadership of thetribal chief Hendrik Witbooi, resulting in nearly 80% of the tribesmenbeing killed by the Germans on the orders of Von Trotha, who issued

set-Vernichtungsbefehl (extermination order) as his response to the local

resistance.6South Africa took over the administration of Namibia fromGermany after World War I under the League of Nations mandate andadministered it as the fifth province of the South African Union Withthe introduction of South Africa’s apartheid laws, Namibia was ruled as

a black homeland

Just like in other parts of Africa, the boundary demarcations ofNamibia gave no consideration to tribal affiliations and the sense ofcommon identity among the many different tribes that inhabited thearea Deliberate efforts were actually made by the Germans to discour-age interethnic interactions and engagements This was done in a form

of ethnic zoning of the social space and restrictions on mobility acrossethnic boundaries However, the common experience of oppression

of the various ethnic groups under both German and South Africancolonial domination led to shared nationalist sentiment among thevarious ethnic groups This was first expressed in the 1940s during a

letter-writing campaign by the traditional leaders to the United Nationsprotesting South African rule The campaign was initiated by the HereroChiefs Council and grew throughout the 1950s to include leaders fromother ethnic groups In 1959, 13 protestors were killed in Windhoek

by South African forces as they demonstrated against a planned cation of their community This event and the ensuing governmentrepression further fuelled nationalist agitations in the colony and influ-enced the United Nations’ decision to terminate the League of Nations’mandate in October 1966 and to assume direct administrative responsi-bility for the country South Africa rejected the United Nations’ decisionand the Namibians were left with no choice but to struggle for theirfreedom The South West Africa People’s Organization (SWAPO) wasformed to peacefully protest against South Africa’s presence in the coun-try But when South Africa persistently ignored Namibia’s demandsfor independence, SWAPO’s armed wing, the People’s Liberation Army

relo-of Namibia (PLAN) was formed to organize an arms struggle againstSouth Africa SWAPO eventually gained UN recognition as the “sole andauthentic” representative of the Namibian people and fought and wonindependence for Namibia on 21 March 1990

Economic experience

Like many other SSA countries, Namibia is blessed with a variety ofminerals and natural resources, including diamonds, uranium, lead,gold, copper and zinc Its economy is therefore heavily dependent onthe extraction and processing of minerals for export.7 Mining there-fore accounts for 11.5% of GDP and provides more than 50% of foreignexchange earnings Like all other commodity-driven economies, the per-formance and growth of the economy is dependent on the volatility ofcommodity prices – especially uranium and diamond The mining andquarrying sectors’ contribution to employment is, however, relativelylow – employing only about 1.8% of the population

The country is described today as an upper-middle-income try with a per capita income of $5,840 But poverty levels in a largesegment of the black population are very high The World Bank’s esti-mates show that 21% of individuals consumed below $1.25/day in

coun-2009 Thus, poverty reduction in the country depends to a very highdegree on the extent to which policies are able to support investmentsthat diversify the economy and make it less dependent on the min-ing sector Post-independence economic policies appear to have madepositive impacts on the diversification of the economy The mining sec-tor’s contribution to gross domestic product (GDP) shrunk from about

47% in 1978 to 19.6% by 1990 and reached 11.3% in 2012 The vice sector contributed about 55% to GDP on average during 2002–12and has become an important engine of growth in the country Currenteconomic policies focus on four priority sectors of logistics, tourism,manufacturing and agriculture in order to stimulate private sector-led industrialization, export orientation, value addition and economicdiversification.

ser-A major challenge in the economic diversification process is the ity of Namibian education Although the education sector has receivedthe largest share of the national budget, averaging over 23% between2010/11 and 2013/14, the sector has hitherto failed to produce studentswith skills required by the economy

qual-Summary

The discussions above suggest that SSA’s political leadership during thefirst three decades of the post-independence era was marked by incom-petence, corruption, weak administration and institutional structures,property grabbing as well as a general disregard for the constitutionalrights of the citizens Ordinary citizens in all the countries have beenencouraged by the neopatrimonial policies of first-generation post-independence leaders to develop a “state-dependency mindset” Theirsocial expectations and assessments of state capacity have been undulyinflated Soldiers became trigger-happy, sometimes with the supportand blessings of external governments Consequently, changes in gov-ernment were effected more quickly through the barrel of the gunthan through the ballot The leadership failures partly account forthe poor performance of SSA economies during half a century of thepost-independence era This combines with the relatively low level ofeducation and general human capital development to reduce overallproductivity of labour on the subcontinent

Recent macroeconomic trends have shown a positive turnaround withconsistent higher growth rates than for the global economy Some coun-tries are however doing relatively well than others This has led someanalysts to suggest that the subcontinent has reached a turning point inits development history