Introduction
This chapter explores the challenges and opportunities for entrepreneurship development in Nigeria and Zimbabwe. The cross-national comparative analysis 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 opportunities and barriers in the two countries are explored by drawing from institutional 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 generation of African entrepreneurs” (McDade and Spring 2005). Comparatively, Nigeria has been covered considerably more than Zimbabwe in existing literature on entrepreneurship development in Africa. Nigeria’s Globacom, founded 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,
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and trends in entrepreneurship beyond the small business sector. Furthermore, 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
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 Entrepreneurship Development in sub-Saharan Africa (ssa). The article is arguably 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 confronting 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 important have state policies been in the formation and rate of private accumulation (of private capital)? Do social and economic spaces exist within which private 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 limitations (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 Entrepreneurship: Theory and Reality, there is a spectrum of entrepreneurs ranging from illiterate owners of micro-enterprises to wealthy founders of large manufacturing 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.
However, most entrepreneurship-related studies, and especially in the context of Africa, have focused mainly on the small business sector or the informal economy (see notable studies in Table 8.1).the entrepreneurs usually start as a downtown corner shop, or business outfit of a family size, to grow to become a big business concern like the Dangotes 5 […] these are well-known and successful Nigerian entrepreneurs with large conglomerates or business empires under their control. What helps them going over the years despite obstacles, are the development of special skills, attitudes and behaviour, which enable them to preserve and perform their roles in society […] The Nigeria entrepreneurs must acquire the requisite entrepreneurial competencies through
regular training and development programmes to avoid entrepreneurial failures in their business ventures.
In the case of Zimbabwe, like any other country in the developing world, the country faces numerous constraints to enterprise development, which still linger after almost four decades of independence. Despite the successes, particularly in the first decade after independence in 1980, the political and economic failures experienced in Zimbabwe from the mid-1990s have been widely and largely attributed to poor governance, corrupt and ineffective leadership, lack of capacity, and/or unwillingness to embrace democratic institutions. This has been exacerbated by the challenges of political pluralism in a growing democracy and the emerging diverse institutional logic and complexity of competing demands of both internal and external stakeholder groups. In the following decades, the State strengthened its machinery in response to growing dissent. This was evident in different ways that included avoidance, Machiavellian manipulation through coercive power, creating and breaking the ‘rules of the game’, ignoring explicit norms and values, disguising non-conformity, assaulting sources of institutional pressure from political opposition and dominating institutional power, space and processes. However, as was noted in the context of Nigeria, most scholarly research on entrepreneurship in Zimbabwe has revolved around small business and/or the informal economy as illustrated in the studies in Table 8.2.
Nonetheless, the unpredictability of the complexities in Zimbabwe has resulted in multi-levels of distinct logics characterised by conflict over the ends, which have continuously been replaced by conflict over the means. Political conflict, corruption, poverty, and resentment are cutting deep, consequentially precipitating serious constraints to entrepreneurship development potential in Zimbabwe (and indeed across ssa). The economic narrative of the ruling elite has failed to offer solutions to millions of unemployed Zimbabweans for nearly thirty years, resulting in mass migration. Over three million have been displaced into the diaspora looking for economic space and opportunities in other countries such as South Africa, the uk and the us. Entrepreneurship development increasingly depends on remittances from Zimbabweans in the diaspora and economic space is gained through political connections (see Jones 2010).
Furthermore, by measuring the “ease of starting a business” rather than “sustaining a business,” the rankings would still require some cautionary interpretation:Since 2003 Doing Business has been publishing annual quantitative data on the main regulatory constraints affecting domestic small and medium-size enterprises throughout their life cycle.
Doing Business, 2016: 9
As further justification for this chapter’s focus on telecoms, we are not only referring to voice calls, but also data and especially in relation to the internet and internet penetration. This is evidenced in the most recent Doing Business Report published by the World Bank, where it is clearly stated that:This year’s report presents data for 189 economies and aggregates information from 10 areas of business regulation – starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency – to develop an overall ease of doing business ranking. (Ibid.)
The role of the information communications technology (ict) in economic development is also captured in the report, with some emphasis on the role of the internet in actualising such processes:The proliferation of information and communication technologies has transformed how businesses operate and how they are regulated in every region of the world. The internet provides a new platform for delivering government information and services – and new opportunities for enhancing the efficiency and transparency of public administration. Indeed, the internet is a tool that governments can use to support businesses at
every stage in their life cycle, whether applying for a business permit, registering property, paying taxes or trading internationally. (Ibid.)
As a departure, therefore, this chapter focuses on the telecoms sector, broadly defined as including voice and data.Beyond starting a business, the internet offers many opportunities for efficiency gains in other areas of business regulation measured by Doing Business. Among the 189 economies covered […] more than 80% (152 in total) use web-based applications to process export and import documents. […] Yet while the internet has the potential to promote inclusiveness, reduce corruption and improve regulatory efficiency, its impact on the quality of domestic governance is subject to political, infrastructural, social and economic factors […]. 6 (Ibid.: 11)
Contextual Opportunities and Barriers: Insights from the Telecoms Sector
Hoffman also points out that, “Vodacom’s South African rival mtn has shown just how important first mover advantage can be when entering a market, while Vodacom’s decision not to enter the market shows how costly business decisions are.” The experiences of both South African mobile giants have shown how lucrative internationalisation can be, especially when focusing on markets disregarded by other international players (see Hoffman 2006). Over the past decade, Nigeria has become the largest telecoms market in Africa and the Middle East, with more than 140 million active telecoms subscribers in 2015, according to the Nigerian Communications Commission (ncc), the federal telecoms regulator. 7 As is the case elsewhere in frontier and emerging markets, mobile subscribers accounted for over 99 per cent of this total, with virtually all of that segment controlled by the country’s four gsm operators: mtn Nigeria, Airtel Nigeria, Globacom, and Etisalat Nigeria (see also Madichie 2011a). Nigeria’s overall telecoms capacity is relatively high – a number of high-capacity submarine cables come ashore in the country – but bringing this capacity into people’s homes remains a major hurdle. Despite the challenges, most indicators point to continued expansion. Taking into account the nation’s large population and solid economic fundamentals, most local players are counting on continued rapid telecoms uptake. In the past five years, Nigeria has grown into one of Africa’s largest and most vibrant markets for ict products and services, with an ecosystem that ranges from software start-ups to infrastructure firms. According to the Federal Ministry of Communication Technology, the federal oversight body, the nation accounts for 29 per cent of all internet usage on the continent, and this figure is expected to rise. DespiteAfrica has three dominant mobile phone operators who are active across the continent, South African companies […] occupy the top two positions […]. Nigeria has proven to be “The growth market” in Africa for mobile telecommunications.
According to the Oxford Business Group’s (obg) recent report on Nigeria’s shifting telecoms landscape (see obg, 22 April 2016), a new mobile operator, Ntel, commenced 4G lte (i.e. Fourth Generation Long-term Evolution) services in Lagos and Abuja in April 2016, increasing competition in the 170 million population telecoms market.
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Operating on the 900-MHz and 1800-MHz bands, Ntel is looking to challenge the four major telecoms operators in Nigeria – South Africa’s mtn, India’s Bharti Airtel, uae’s Etisalat, and local Globacom – with the promise of internet speeds of up to 230 Megabytes per second (Mbps).
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Smile Communications, a broadband service provider, is also making a push into the Nigerian 4G lte space, with particular emphasis on voice over lte (VoLTE), which allows users to make calls through an application or VoLTE-enabled handsets. The company unveiled its network, which operates on the 800-MHz band, in March 2016. The entry of Ntel and Smile underscores the potential for growth in the Nigerian telecoms industry, particularly in the mobile broadband space. According to Frank Li, Managing Director
Airtel emerged overall best in the three categories following its enviable strides in charting new paths in meeting the demands and needs of its esteemed stakeholders through superior brand experience, a rich portfolio of innovative products and services ranging from exciting voice solutions to inventive data packages.
The entrepreneurship potential of the aforementioned “Top 30 ssa multinationals” to providing the direction of economic development is also evidenced by their annual rate of profit of about 30 per cent between 2006 and 2009, which far outpaced that of their global competitors, including Standard and Poor’s 500 biggest us firms. According to James Mwangi, ceo and Managing Director of Equity Bank, Kenya, and a member of igd’s Frontier 100 network, “there is so much untapped potential in these markets-potential for revenue as well as opportunity to create jobs and reduce poverty […].” He adds that:These homegrown multinational companies bring the best practices in management, operations and governance wherever they go in the Sub-Saharan region […] They can professionalize markets in ways that boost income and employment for entire sectors.
igd 2011
Partnerships are critical to achieving a company’s full potential, as Equity Bank’s success has shown. By using the strategies outlined in this report, and by thinking long-term, other companies can grow and help change policies that will encourage additional economic development.
igd 2011
The above quote leads us to our next area of focus in this chapter – a critical evaluation of opportunities and barriers of mobile telecoms as an economic development tool in ssa.This case study documents the story of Zimbabwean Entrepreneur Strive Masiyiwa in his quest to obtain a mobile telecommunications license. First the Post and Telecommunications Corporation of Zimbabwe (ptc) and then the Ministry of Information, Post and Telecommunications of the government of President Robert Mugabe place obstacle after obstacle in his path, but Masiyiwa challenges their decisions and actions in the High Court and the Supreme Court. Throughout this five-year process (1993–1998), he remains determined to obtain the license through ethical means. A number of individuals and organisations impressed by his values come to his help and this assistance, along with the independence of the Judiciary, is instrumental in his firm being given the license in July 1998. The case represents an in-depth study of a successful example of resistance to political corruption (2003).
Critical Analysis of Emerging Issues: Introduction to the Case Studies 18
Forbes also reports in its most recent publication that “seven members of the 2014 list dropped off, including mining mogul Desmond Sacco of South Africa and telecom tycoon Strive Masiyiwa of Zimbabwe.” (Forbes, 18 November 2015). The minimum net worth required to make the list this year was us$330 million, down from us$510 million in 2013.Our list tracks the wealth of African citizens who reside on the continent, thus excluding Sudanese-born billionaire Mo Ibrahim, who is a u.k. citizen, and billionaire London resident Mohamed Al-Fayed, an Egyptian citizen. We calculated networths using stock prices and currency exchange rates from the close of business on Friday, November 13 [2015]. To value privately-held businesses, we couple estimates of revenues or profits with prevailing price-to-sales or price-to-earnings ratios for similar public companies.
The Entrepreneurs Unravelled
Mike Adenuga
Dr. Michael Adeniyi Ishola Adenuga Jr. (con) was born in 1953, in the ancient city of Ibadan, to Chief Mike Adenuga Senior (his father) a school teacher and the mother, Chief Mrs. Onyindamola Adenuga, a successful businesswoman in Ibadan. It is argued that Mike was influenced by his late mother’s business acumen (see Keluro 2011). He attended the famous Ibadan Grammar School, in Oyo State in Southwest Nigeria. He studied Business Administration at Northwestern State University in the United States and went on to earn a Master’s degree at Pace University, New York, majoring in Business Administration with emphasis on Marketing. He is also reported to have worked as a taxi driver to support himself while undertaking his mba in New York. He returned to Nigeria and made his first fortune trading lace and Coca-Cola. Along the way, he made friends with Nigerian military bigwigs who awarded him lucrative state
In telecoms, his mobile phone network, Globacom (or Glo), is the second largest operator in Nigeria with 32 million subscribers. It also has operations in Ghana and the Republic of Benin. A higher estimate of Glo’s revenues led Forbes to increase the value assigned to it. Glo is not only the most innovative network in Nigeria, it also, in its first year of operation, became the fastest growing in Africa and the Middle East, with operations in Nigeria, Ghana, Benin Republic, Senegal, Gambia, and Cote d’Ivoire. Adenuga also has a multi-billion-dollar investment in real estate. These companies provide direct employment to thousands of workers and millions of others indirectly. Glo also has operations in Ghana and the Republic of Benin. A higher estimate of Globacom’s revenues led Forbes to increase the value assigned to it. His latest achievement has been the laying of an international submarine cable, Glo-1, which has gigantic capacity, directly from Africa to Europe and America. The fibre optic cable provides excess bandwidth to all the cities connected to the cable, and has led to a much faster and robust connectivity for voice, data, and video. The name Adenuga means different things to different people. A husband, father, team leader, role model, an entrepreneur par excellence! Though he has made giant strides in several business categories, Nigerians would probably remember him more for his timely intervention in the telecommunications arena, where he seems to
Mike Adenuga is undoubtedly one of the most recognisable names on the African continent. He has been described as “a quintessential businessman who has made his mark so distinctly that world leaders speak glowingly about him.” 22 In recognition of his accomplishments in business and outstanding contributions to the economic growth of Nigeria, he was awarded an honorary doctorate degree by the Ogun State University. He was also honoured by the Federal Republic of Nigeria with the National Awards of the Officer of the Order of the Niger (oon) and later with the award of Commander of the Order of the Niger (con). During Nigeria’s 50th anniversary celebrations, Adenuga was one of the 50 pre-eminent Nigerians who were conferred with the Special Golden Jubilee Independence Anniversary Awards by the Federal Government of Nigeria. Among his awards was the national honour of Grand Commander of Niger (gcon). As Chairman of the revered Mike Adenuga Group, an entity that has been described as “probably the biggest business empire in Africa,” which can “fittingly be summed up as the story of African enterprise.” 23 Adenuga has won numerous awards in recognition of his personal and business accomplishments, including the African Telecoms Entrepreneur of the year for his courageous and rapid investment in the telecoms sector. Finally, Adenuga is rarely out of the news on account of several patriotic initiatives. Glo is also the biggest supporter of football in Africa and has raised the profile of football in Nigeria and Ghana with the sponsorship of the English Premier League and national football teams. It has spent over N6 billion on Nigerian football and has also transformed the annual Confederation of African Football (caf) Awards and made it the most glamorous sports event on the continent. In addition, Glo sponsors the cnn Inside Africa programme as well as Manchester United Football Club in England.
Awards and recognitions
- • 2007 – African Entrepreneur of The Year at the maiden African Telecoms Awards (ata) on August 15, 2007.
- • 2007 – Named African Entrepreneur of The Year at the maiden African Telecoms Awards (ata) on 15 August 2007 (see Keluro, 2011).
- • 2010 – Voted Nigeria’s Most Outstanding Business Personality in the last 50 years.
- • In an online poll conducted by This Day, he polled 4272 votes to edge out the Chairman, Dangote Group, Alhaji Aliko Dangote who scored 4156. Founder of Diamond Bank, Mr Pascal Dozie, polled 3316, Olorogun Michael Ibru got 3073 while the Chairman, First City Monument Bank, Otunba Subomi Balogun polled 2801.
- • 2009 – Adenuga won the coveted Silverbird Man of the Year Award, polling over 75% of the votes cast to edge out other eminent personalities such as the Governor of Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi, Foreign Affairs Minister, Odein Ajumogobia, and the Akwa Ibom State Governor, Godswill Akpabio, among others. The annual award is facilitated by Silverbird Communications, owners of Silverbird tv and Rhythm 93.7 fm. Similarly, several other media organisations have also honoured the Globacom Chairman with their Man of the Year Award within the last few years.
- • caf has awarded Adenuga, the Pillar of Football in Africa for his strong support for African Football at both national and continental levels. At the 2nd edition of the Glo-caf Awards held in Ghana, former President John Kufour declared Adenuga Africa’s No.1 Businessman for his promotion of the continent through his business empire.
- • 2016 – Nigerian Vanguard African Business Man of the Year Award (Osuagwu, 2016).
Strive Masiyiwa
Born in 1961 in Southern Rhodesia (now Zimbabwe), Strive Masiyiwa represents a great success story of one of the most prominent Zimbabwean entrepreneurs. Described as a visionary leader, entrepreneur, and philanthropist Masiyiwa attended primary school in Zambia and completed his secondary in Scotland. He went on to obtain a degree in Electrical Engineering in Wales before returning to Zimbabwe in 1984. After working briefly as a telecoms engineer for the state-owned telephone company, he quit his job and set up his
In spite of these issues, Masiyiwa has won numerous accolades (see Box 8.1 for a summary) and gained international recognition for his business expertise and philanthropy. Moreover, he is considered one of Africa’s most generous humanitarians and is generally recognised as one of the most prolific philanthropists to ever come out of Africa.
Summary of Masiyiwa’s honours and awards (2016)
- • 1990 – Zimbabwean Businessman of the Year Award (youngest ever recipient of the award)
- • 1998 – Zimbabwean Manager and Entrepreneur of the Year Award.
- • 1999 – Junior Chamber International (jci) – Ten Most Outstanding Young Persons of the World
- • 2002 – Times Global Business Influentials List.
- • 2003 – cnn/Time magazine Poll – 15 Global Influentials of the Year.
- • 2010 – Builder of the Modern Africa Award
- • 2011 – Forbes Magazine – 20 Most Powerful Business People in African Business.
- • 2011 – Times of London – 25 Leaders of Africa’s Renaissance Award.
- • 2012 – Invited by President Barack Obama to attend G-8 Summit at Camp David, usa.
- • 2014 – Fortune Magazine – 50 most influential leaders in the world
- • 2015 – Forbes Magazine – 10 Most Powerful Men in Africa list for 2015.
- • 2015 – African Business Awards – Lifetime Achievement Award.
- • 2015 – Brand Africa Awards – Lifetime Achievement Award.
- • 2015 – Freedom Award – International Rescue Committee.
He reportedly used his own family fortune to build one of the largest support programmes for educating orphans in ssa. Masiyiwa is also involved in supporting a diverse range of health issues including campaigns against hiv/aids, cervical cancer, malnutrition and, more recently, Ebola. He is an avid environmentalist and together with Sir Richard Branson founded the environmental group, the Carbon War Room. Masiyiwa recently took over the chairmanship of agra, an organisation that supports Africa’s smallholder farmers, a position previously held by the former un secretary general, Kofi Annan. Masiyiwa is also co-chair of Grow Africa, the investment forum for Africa’s agriculture, which has helped mobilise over us$15 billion in investments for African agriculture. He has used his wealth to provide scholarships to over 100,000 young Africans over the past 20 years through his family foundation, as well as providing support for over 40,000 orphans with educational initiatives, in addition to sponsoring students at universities in the us, uk and China. Masiyiwa also funds initiatives in public health and agriculture across the African continent. He is a member of the Bill Gates and Warren Buffett, initiative known as the Giving Pledge. Forbes Magazine puts Masiyiwa’s personal wealth at us$600 million. Ventures Africa recently estimated Masiyiwa to be worth over us$1.4 billion.
The Companies
Globacom (Glo) Nigeria
Globacom is Nigeria’s second largest mobile phone network after South Africa’s mtn.
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Globacom Limited (or Glo) is a Nigerian multinational telecommunications company headquartered in Lagos, Nigeria. Glo is a privately owned telecommunications carrier that started operations on 29 August 2003.
In 2005, Glo Mobile introduced the Glo Fleet Manager, a comprehensive vehicle tracking solution. Glo Fleet Manager helps transporters/fleet operators manage their fleet. Glo Gateway recently acquired a licence in Côte d’Ivoire.
Econet Wireless
Founded in 1993 in Zimbabwe by Strive Masiyiwa, Econet Wireless is a diversified telecoms group with operations and investments in Africa, Europe, South America, and the East Asia Pacific Rim. It provides products and services in the core areas of mobile and fixed telephony services, broadband, satellite, fibre optical networks, and mobile payments. Econet’s other activities include enterprise networks, financial services, renewable energy, and solar-powered solutions (Solarway Industries). By 1998, Econet Wireless Zimbabwe had its first mobile phone subscribers and was listed on the local stock exchange. Within a few years it was the second largest company in the country. In 2000,
Summary, Conclusions and Implications
The main focus of this chapter has been to highlight the current state and challenges of enterprise development in ssa from the standpoint of two entrepreneurial ventures in a sector that has a key role to play in the region’s economic development, i.e. the telecoms sector. Two divergent markets – Nigeria and Zimbabwe – were used as case studies. In the first case, the literature on entrepreneurship or enterprise development in Nigeria is replete (Abereijo, 2015; Abubakar, 2015; Abimbola, & Agboola, 2011; Alarape, 2009; Aderemi et al., 2008). However, the same cannot be said of the under-researched Zimbabwean context. In both cases, the focus of entrepreneurship research has been primarily on the sme sector, as highlighted in Tables 8.1 and 8.2. By extending the entrepreneurship discourse to the large business sector, epitomised by the two telecom giants in this chapter, 32 it is possible to argue that the value of this chapter lies in its ability to explore the less known from the context of the well-known.
As demonstrated in this chapter, the entrepreneurial landscape is fraught with challenges, which are, more often than not, institutional in their configuration. Whether it is Nigeria or Zimbabwe, economic environment is largely dictated by the political ruling class – the latter dictating the pace and scope of enterprise development. In the case of Zimbabwe for instance, the ruling political party, zanu-pf, reportedly abandoned its pre-independence revolutionary promises of fundamental structural change (while retaining the rhetoric) in favour of a pragmatic accommodation of the capitalist sector, at the same time implementing a welfare social policy and boosting the peasant economy with
Going forward, there is urgent need to establish a dynamic balance of the diverse institutional logics with a view to redefining an effective turnaround strategy for sustainable entrepreneurship development in ssa. There remains an urgent need to support, and not vilify, the observed entrepreneurial initiatives of not just small firms, but also medium to large enterprises, and especially indigenous enterprises with the potential to bring about an economic transformation of the region. It is also evident that the telecoms sector has far-reaching implications for other sectors, such as the financial institutions (micro-finance houses, banks, and mobile-payment firms), media and entertainment, as well as the agricultural sectors that have been identified as ssa’s new frontiers for economic development.
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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).
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.”
According to McDade and Spring (2005: 21), the soes were sold to civil servants or businessmen, 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 liberalisation to open both private and state-owned domestic firms to external competition. Most large firms in Africa manufacture beverages, clothing, furniture, rubber, leather products, plastics, soap/toiletries, pharmaceuticals, or are in construction and transportation. Many of these large-scale firms in Africa are owned by ethnic minorities such as Asians, Syrians/Lebanese and Europeans. There are also multinational companies. Indigenous Africans own one-third or less of large industrial firms. The amount varies among countries. In Kenya, black Africans own only 3.6 per cent of large firms, whereas in Zimbabwe it is more than 30 per cent (Ramachandran and Shah 1999 ). In Zimbabwe, a number of party-linked businessmen emerged through these organisations, such as Roger Boka, Enock Kamushinda, Philip Chiyangwa, Supa Mandiwanzira, Strive Masiyiwa, Peter Pamire, and Chemist Siziba. They used their access to the state to develop significant business interests. It was at that time that Masiyiwa faced major obstacles when he tried to establish his own mobile phone company.
For example, one study highlighted “The National Universities Commission’s 1989 Approved Minimum Academic Standards for teaching of courses in business schools at the undergraduate level has a compulsory course on Entrepreneurial Development” (see Inyang and Enuoh 2009: 65) in a bid to create opportunities for graduating students of business management and related disciplines to learn entrepreneurial skills to help them venture into setting up businesses. The programme is also intended to assist the government in reducing unemployment through self-employment. The government is, therefore, heavily concerned about developing small-scale business operators or indigenous entrepreneurs that can assist in economic/national development – being self-employed and reducing unemployment, creating more employment opportunities and given the citizens a sense of self-worth and confidence.
Referring to Alhaji Aliko Dangote, Nigerian entrepreneur and Africa’s richest man according to Forbes Magazine.
See also pp. 14–17 of the Doing Business Report for the praise showered on Rwanda as the champion for ssa.
However, Ntel’s entrance comes at a time when operators are grappling with slowing revenues, and looking to data coverage to improve income. Flattening average revenue per user (arpu) rates are being seen throughout the African continent, as competition and regulation drive down tariffs for voice services. mtn Nigeria’s arpu fell by 11.5 per cent year-on-year, for example, dropping to N994 (U$5) in the third quarter of 2015. As a result, data is becoming increasingly important to maintaining margins. Operators across Africa have benefited from the rollout of new 3G and 4G lte networks, and Nigeria is no exception, with subscribers on data networks providing significantly higher revenues. According to mtn Nigeria, arpu for smartphones is roughly 3.5 higher than for non-smartphones, suggesting there could be significant return on investment if operators develop the necessary infrastructure to support growing data use.
Ntel first announced it would be entering the market in the autumn of 2015, beginning with coverage in Lagos, Abuja and Port Harcourt, and eventually spreading out to smaller cities and towns across Nigeria. The first phase of the firm’s operations is set to begin with 800 tower sites and is intended to grow to 2000. The company has ambitious targets, with plans to attract more than $1bn worth of investment by 2020 to expand its mobile broadband network, Kamar Abbas, ceo of Ntel, told local media in April.
Zain, once again under offer during 2009 (but this time in the form of a 46 per cent stake in the company itself), remains unsold, as does (for now) mtn despite its active pursuit by Bharti Airtel.
2010 Africa Development Indicators, World Bank Group.
Indeed, borrowing from McDade and Spring (2005), we describe these entrepreneurs in the Telecoms sector as the “new generation”, and following in the footsteps of the decade old seminal book by Iliffe (1983), which cited pioneers of indigenous African business such as Chief Alhaji Yinka Folawiyo, founder of Nigerian Green Lines shipping company (1979); the Dantata family in Kano (Nigeria) renowned merchants and arguably the wealthiest in tropical Africa (see pp. 2–3); Njenga Karume, a Kenyan who in 1974 was Director of 36 firms as well as a shoe manufacturing company that challenged multinationals in his native, Kenya; and Senegalese billionaire Alhaji Momar Sourang. See Iliffe, J. (1983). Emergence of African Capitalism. London: The MacMillan Press.
By 1994, ibdc had extracted some access rights from the state such as a quota for building contracts, but its internal dynamics gave rise to a more militant groups such as the Affirmative Action Group (aag), which was chaired by Philip Chiyangwa. The state funded both organisations, although it later complained about accountability.
As picked up from a separate study, Zimbabweans are not opposed to indigenisation per se, but they want the process to be carried out in a rational and fair manner to avoid a situation where the initiative is hijacked to benefit a privileged few. zanu pf’s militarised patronage system under the guise of indigenisation provides a perfect opportunity to well-connected members of the Zimbabwean ruling party-state complex to become rich overnight. Indications so far are that the implementation of the empowerment policy is vindictive and lacks transparency. The fast-track indigenisation programme across all sectors of Zimbabwe’s economy is likely to have a knock-on negative effect on economic growth and poverty alleviation. In the long runs it can be argued that patronage politics are both economically and financially unsustainable as they run against the very basic notions of wealth creation meant to alleviate poverty and redistribute wealth. Current indigenisation policies in Zimbabwe seem to continue that trend.
We exclude South Africa for a number of reasons. First, it is widely reported on. Second, it dominates the southern African sub-region. Third, it is no longer the #1 economy in ssa (Nigeria has taken over). Fourth, it is home to Africa’s #1 Telco, mtn. Forbes points out in its “Africa’s 50 Richest 2015: South African Tycoons Overtake Nigerians Amid Economic Weakness” that “South Africans made the best showing on the Africa’s richest list this year, occupying 16 spots, up from 11 last years. Nigerians had a smaller representation, with 10 members of the list, down from 13. Eight members hail from Morocco, 7 from Egypt, 3 from Tanzania and 3 from Kenya. There was one each from Algeria, Angola and Uganda.” [Forbes, 18 November 2015].
Forbes (18 November 2015) Africa’s 50 Richest 2015: South African Tycoons Overtake Nigerians Amid Economic Weakness. Retrieved from: http://www.forbes.com/sites/kerryadolan/2015/11/18/africas-50-richest-2015-south-african-tycoons-overtake-nigerians-amid-economic-weakness/#51b20f2772d7.
Forbes (no date) Profile: Mike Adenuga. Retrieved from: http://www.forbes.com/profile/mike-adenuga/.
Ibid.
See News of the People. Retrieved from: http://www.newsofthepeople-ng.com/mike-adenuga-complete-story-of-the-new-grand-commander-of-business/.
Adenuga’s nomination was as a result of his immense contributions to the growth of oil and gas, banking, and the telecoms industries in the country. Press briefings praised him for having re-invented the country’s telecoms industry. He is also a highly respected entrepreneur and one of the biggest employers in the country. In the last two decades, he has established a pedigree as a well-focused and prudent manager of people and resources, with an uncanny ability to successfully transform ideas and dormant businesses to highly viable enterprises (Ibid).
The company he created is known to have operations and investments in more than 20 countries, including the uk, us, Latin America, New Zealand, United Arab Emirates, and China. Masiyiwa also has interests in the us having partnered with one of America’s leading telecoms entrepreneurs, John Stanton, in a venture called Trilogy International Partners, which built New Zealand’s third mobile network operator, 2 Degrees. Masiyiwa’s investment in Seattle-based Trilogy International has also helped him secure interests as an investor in businesses in Bolivia and the Dominican Republic. Masiyiwa also has a controlling interest in a company based in Vermont, usa, which manufacture nano-fibre carbon products, called Seldon Technologies. One of Masiyiwa’s most successful ventures is the London-based privately held Liquid Telecom Group, Africa’s largest satellite and fibre optic business spanning over 14 countries.
According to Forbes’ estimates, Mike Adenuga, who is worth us$5.1 billion, made his fortune in mobile telecoms, banking, and oil. Globacom Limited is headquartered at Mike Adenuga Towers, 1, Mike Adenuga Close, Off Adeola Odeku Street, Victoria Island, Lagos. Nigeria. See Globacom’s Official Website online at: http://www.gloworld.com/ng/about-us/.
In his analysis of the distribution strategies of Blackberry handsets in Nigeria, Uzo (2015: 216), pointed out that gsm operators such as mtn, Airtel (formerly Econet), Etisalat, and Glo Mobile should be cautiously courted.
“Globacom leads Africa, Middle East mobile market with 5.8m subscribers”. it News, (http://www.itnewsafrica.com/?p=29).
All Africa. Retrieved from: http://allafrica.com/stories/200609140507.html.
In January 2012, Glo Ghana launched the “Reserve your number” campaign, but still without opening the network.
A seaside town in Cornwall, uk.
Similar to the methodology adopted for this chapter, Ajai (2015) adopted a case study approach in his investigation of African firms from South Africa and Nigeria examining other ssa markets such as Nigeria, Kenya and Ghana.
At the other end of the spectrum, a challenge to the regime coalesced around the Zimbabwe Congress of Trade Unions (zctu). Created in 1980 by the state, the zctu was essentially a department of zanu headed by Mugabe’s brother, but by 1989, it had achieved some independence with Morgan Tsvangirai as its General Secretary. The zctu became instrumental in the formation of the National Constitutional Assembly in 1997 and then the Movement for Democratic Change (mdc) in 1999. The mdc was able to aggregate a disparate range of forces opposed to zanu-pf: workers, students, middle-class urbanites, white commercial farmers and, combining the financial resources of both urban black and rural white capital with the numerical strength of the working class, mounted a significant challenge to the monopoly on power that zanu-pf had enjoyed for 20 years.