Understanding the Rise of African Business: In Search of an Analytical Framework

In light of recent enthusiasm over the African private sector, this paper reviews the existing empirical literature on successful African enterprises and proposes an analytical framework for understanding African firm success. Overall, it is argued that we need to develop an understanding of African firm strategy and performance that takes into account the specificities of the African business environment and African firm capabilities. The paper starts by juxtaposing the widespread pessimistic view of African business with more recent, optimistic studies on African firms’ performance. The latter suggests that profound improvements in African business performance are indeed under way: with the private sector playing a more important role as an engine of growth, with the rise of a capable African
entrepreneurial class, and with the emergence of dynamic and competitive African enterprises. The paper proceeds to review the limited research on factors shaping the performance of African enterprises. It is observed that particularly the strategic component is often overlooked as is the role of internal capabilities and resources of African enterprises. Based on this identification of voids in the literature, the authors suggest an analytical framework for understanding African business performance, underlining the interplay between contextual specificities, firm capabilities, and firm strategy.