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ENTREPRENEURSHIP & REGIONAL DEVELOPMENT, 17, JANUARY (2005), 1742

The new generation of African entrepreneurs: networking to change the climate for business and private sector-led development
BARBARA E. MCDADEy and ANITA SPRINGz
yDepartment of Geography, University of Florida, Gainesville, Florida, USA; e-mail: bmcdade@u.edu zDepartment of Anthropology, University of Florida, Gainesville, Florida, USA; e-mail: aspring@u.edu

This paper discusses the entrepreneurial landscape in Africa and locates a new generation of African entrepreneurs and their business networks within it. Unlike others in that landscape (i.e. micro- or small-scale informal sector vendors, and traditional or multinational large-scale formal sector rms), the new generation entrepreneurs are business globalists who organized a system of business enterprise networks consisting of national, regional, and pan-African organizations. The study analyses interview data from 57 men and women network members from 10 countries (Botswana, Ethiopia, Ghana, Kenya, Mali, Senegal, South Africa, Uganda, Zambia, and Zimbabwe). Some dening characteristics of these entrepreneurs are interactive social and business relationships, use of modern management methods and information technology, trust among fellow members, transparent business practices, advocacy on behalf of the private sector, and commitment to increasing intra-African commerce. Their mission is to improve the climate for private sector business in Africa and to promote regional economic integration. They pursue cross-national commercial ventures, maintain ocial observer status at established regional economic organizations, sign memoranda of understanding with multilateral agencies, establish venture capital funds, and help to change government policies. The paper identies characteristics of the new generation entrepreneurs, evaluates goals and achievements of their networks, and concludes that despite limitations, these entrepreneurs and their organizations have created intra- and cross-national networks that strengthen private-sector-led economic growth in Africa. Keywords: entrepreneurship; private sector; business networks; Africa

1.

Introduction

The study of entrepreneurship and indigenous private enterprise is a signicant component of research on economic development in Africa (Spring and McDade 1998, Bowditch 1999, Choudhury 1999, King and McGrath 1999, Kinunda-Rutashobya and Olomi 1999, Agbaw 2000, Mshomba 2000, Fick 2002, Jackson 2002, McDade 2003, Murinde and Woldie 2003, among others). Most research focuses on entrepreneurs who operate micro- and small-scale enterprises in the traditional informal and formal sectors. Much less has been written about entrepreneurs who own and operate medium- and large-scale businesses in the modern formal sector. This paper considers this segment of entrepreneurs, specically focusing on a new entrepreneurial group in the landscape who founded a system of regional enterprise networks in response
Entrepreneurship and Regional Development ISSN 08985626 print/ISSN 14645114 online # 2005 Taylor & Francis Group Ltd http://www.tandf.co.uk/journals DOI: 10.1080/0898562042000310714

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to liberalized economic and political conditions, which they perceive provide economic and professional opportunities in Africa. With donor funding assistance, they organized 31 national, three regional, and one pan-African business networks in West, East, and Southern Africa. The objective of these networks is to expand intraAfrican business activity and investment, and to help to create a more favourable climate for the private sector. These entrepreneurs are highly educated men and women who have prior work experience in formal sector rms in Africa and elsewhere, and they have a global outlook. This study looks at this small, but potentially inuential segment of the business community, who describe themselves as the new generation of African entrepreneurs. In the interdisciplinary volume African Entrepreneurship: Theory and Reality (Spring and McDade 1998), various authors examined a spectrum of entrepreneurs ranging from illiterate owners of micro-enterprises to wealthy founders of large manufacturing rms and their MBA-educated managers (Hart 1972, Beveridge and Obserschall 1979, Jalloh and Falola 2002). Then, in 1999 and 2000, several African entrepreneurs attending a major trade and investment symposium in the USA identied themselves as members of the new generation of African entrepreneurs. They used cell phones, laptop computers, international credit cards, and e-mail accounts. Most had earned bachelor or graduate degrees, many had managerial or ownership experience in major formal sector companies. Some were members of three recently established regional enterprise networks of business people whose objectives are to exchange information and facilitate business linkages among network members within countries, among the regions, and in the global arena. Many network members had travelled abroad to study and work, then returned to Africa to pursue business opportunities rather than remain in lucrative jobs overseas. A literature review revealed a paucity of publications on this segment (see below for a review). This paper expands the study of African entrepreneurship, identies the characteristics (demographic, attitudes, practices) of the entrepreneurs, and evaluates their goals and accomplishments with respect to intra-Africa trade, advocacy for the private sector, and creation of venture capital funds. It analyses their eorts to improve the climate for business in Africa and to increase regional business activity. The entrepreneurial landscape in Africa is discussed in the next section, which also introduces the new generation entrepreneurs and their network organizations. The data collected and the methods used to analyse them follow in section 3. Sections 4 and 5 present ndings about the characteristics of the new generation entrepreneurs and the national, regional, and pan-African enterprise networks, respectively. Section 6 reviews a comparative survey of network members; section 7 assesses the entrepreneurs and their networks. Conclusions are given in section 8.

2.

The entrepreneurial landscape in Africa

The entrepreneurial landscape in Africa ranges from a multitude of micro-enterprises that provide marginal employment for a single individual to a small number of large corporations employing hundreds of people; an assortment of businesses span these extremes. The conguration includes informal and formal sector businesses, traditional and modern, indigenous and foreign-owned enterprises geographically dispersed in rural and urban areas.

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2.1

Microentrepreneurs in the informal sector

Only 2% of all African businesses have 10 or more employees (Spring and McDade 1998, Manu 1999). The majority are micro and small-scale enterprises (MSEs) that consist of one to three employees (Daniels et al. 1995, Kibera 1999, Jalloh and Falola 2002), mostly in the informal sector. There is no conclusive denition of the informal sector, although the term has been in existence since the 1970s. Initially, it referred to unregistered, unregulated businesses, including service enterprises (e.g. hairdressing, commercial transportation, auto repairing, etc.), production activities (e.g. furniture, metal equipment manufacturing, etc.), and vendoring (e.g. food, clothing, medicines, etc.). Charmes (1999) estimates that the informal sector contributes 20% to 40% of total GDP in several African countries, and 40% to 60% of non-agricultural GDP. However, in spite of support from donor agencies and non-governmental agencies (NGOs) over the past 30 years, the expected growth and transition of most informal sector MSEs into medium- or large-scale enterprises has not occurred (Kobonyo 1999, Spring 2002). There are many studies of MSEs (MacGaey 1987, Clark 1994, Arnould 1995, Robertson 1997, Aspaas 1998, Spring and McDade 1998, Jalloh 1999, Adenikinju et al. 2002, Jalloh and Falola 2002) and of women marketers (see below). There are also non-agricultural MSEs (e.g. manufacturing roof tiles, furniture, metal tools, etc., in both urban and rural areas). Ownership of MSEs is overwhelmingly by black Africans (Schulpen and Gibbon 2001).

2.2

Micro- to small-scale enterprises in the formal sector

Recognizing the important role of the informal sector in providing goods and services for the domestic market, governments and NGOs attempted to formalize them by providing sites (e.g. market spaces and industrial districts) and oering services (e.g. micronancing, utilities, and skills training). Informal businesses were sometimes conveniently reclassied as formal so that municipal governments could register and tax them. These small enterprises face many obstacles to growth including: (1) diculty in attracting investment capital and gaining access to markets; (2) isolation and lack of productive linkages with other businesses; (3) lack of business training and expertise for both owners and employees; (4) severe competition; and (5) their customers low incomes. In Africa, half of the small-scale formal enterprises with more than 10 employees are owned by residents of Asian and Middle Eastern descent (Schulpen and Gibbon 2001).

2.3

The role of gender in the entrepreneurial landscape

African women entrepreneurs are the primary provisioners of domestic food supplies in both rural and urban areas. Most women-owned businesses are micro- and smallscale enterprises in the informal sector (see, for example, Clark 1994, Horn 1994, House-Midamba and Ekechi 1995, Robertson 1997, Aspaas 1998, Snyder 2000, Mandel 2003). A study of 50 000 MSEs in Southern and Eastern Africa during the period 199098 showed that 48% were owned by women (Mead 1999). The percentage of women owners and managers in the formal sector was considerably

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smaller (Agbaw 2000). Even in the modern formal sector, some women entrepreneurs feel impeded by the gender divide that prevails in most African countries (Hagos 2000). Snyder (2000) interviewed Ugandan women entrepreneurs who established and operated successful businesses that run the entire spectrum of the entrepreneurial landscape. These entrepreneurs include market women (who sell everything from water to curtains), manufacturers of leather shoes, owners of private clinics and supermarkets, hoteliers, and tourism industry operatives. She concludes that despite the positive impacts of womens activism, the majority of African women face gender disparities across all socio-economic and political indicators of development.

2.4

Medium-scale African rms

A small, large-scale sector and a large, small-scale sector characterize most African economies. In between is the medium-scale sector (Olomi 1999), which has been called the missing middle in African economies (Esbin 1994, Ferrand 1996, Kibiriti 1999, EnterpriseAfrica 2000: 10). However, a study of modern African entrepreneurs in six countries (Botswana, Cote dIvoire, Ghana, Kenya, Malawi, and Tanzania) proled medium-scale rms and concluded that the middle is not missing (Marsden 1990: 5). For example, it identied 5000 formally registered road transport companies in Tanzania, and reported that over 2000 Ghanaian businesses applied for loans from nancial institutions where the average investment project funded was $1.5 million. These are not micro- or small-scale enterprises. Snyders study (2000) revealed a small but growing segment of women owners of medium-scale businesses in Uganda. Some of these women formed business associations to take advantage of the Ugandan governments recent private sector-friendly policies. The Africa Project Development Facility of the World Banks International Finance Corporation (IFC) has funded medium- and large-scale African enterprises for more than a decade (EnterpriseAfrica 2000).

2.5

Large-scale enterprises in Africa

Medium- to large-scale formal-sector enterprises owned by Africans are an important part of the entrepreneurial landscape in spite of their small percentage. History shows that in most African countries, colonialism stied the growth of an indigenous formal private sector. After independence, some African governments limited the expansion of businesses owned by indigenous entrepreneurs. Government leaders were suspicious that a strong private sector comprised of their own citizens might threaten their own powers and privileges (Business in Ghana 1996, Gray and McPherson 2001, Wohlmuth and Wauschkunh 2001, Jackson 2002, Murinde and Woldie 2003). Hence, during the 1960s to 1980s, many African states stepped into the role of business owner. State-owned enterprises (SOEs) assumed the responsibility of building the infrastructure of newly independent countries to meet the demand for goods and services (Agbodeka 1992, McDade 2003). Most SOEs were unproductive and failed, so by the late 1980s, many African governments abandoned this strategy. They turned to donor-driven policies that promoted private sector-led economic development (Arzeni 1997, Thornton 1999, Coulter 2000, Premaratne 2001).

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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 liberalization to open domestic rms, both private and state-owned, to external competition. Most large rms in Africa manufacture beverages, clothing, furniture, rubber, leather products, plastics, soap/toiletries, pharmaceuticals, or are in construction and transportation (Todaro 2000, Schulpen and Gibbon 2001, Adenikinju et al. 2002). Many of these large-scale rms 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 rms. The amount varies among countries. In Kenya black Africans own only 3.6% of large rms, whereas in Zimbabwe the percentage is more than 30% (Ramachandran and Shah 1999).

2.6

The new generation of African entrepreneurs

The new generation entrepreneurs in this study are members of enterprise networks that began in 1993 with the formation of the West African Enterprise Network (WAEN), followed in 1998 by the East African Enterprise Network (EAEN) and Southern African Enterprise Network (SAEN). Each regional network is comprised of national networks. WAEN consists of national networks from 13 countries in West Africa, EAEN has seven in East Africa, and SAEN has 12 in southern Africa.1 A regional enterprise network was not established in Central Africa because of the ongoing conict in the Democratic Republic of the Congo. In 2000, the panAfrican Enterprise Network (AEN) was formed at the Millennium Conference in Addis Ababa. The objectives of these networks are to strengthen private sector regional co-operation in African countries, develop and expand formal commerce and trade among businesses regionally and globally, and to work with governments to change policy and regulatory environments through advocacy strategies (WAEN 1993, Orsini et al. 1996, Orsinsi 2001, Wohlmuth and Wauschkunh 2001, JanssensBevernage 2002). Although the networks total membership is a tiny fraction of entrepreneurs in Africa, these entrepreneurs have inuenced business practices in their countries and trade and regulatory policies as discussed below. These networks and their members are nearly invisible to most scholars who study entrepreneurship and economic development in Africa. A literature review revealed only six publications in which the networks were the primary focus of study: two articles (Orsini et al. 1996, Janssens-Bevernage 2002); two book chapters (Wohlmuth and Wauschkunh 2001, Spring 2002); and a book in which several members were featured (Fick 2002). Additional information about the networks and their members can be found in their newsletters (EAEN 1998, 1999, 2000, SAEN 1999); magazine articles by network members (Kibiriti 1999, 2000); regional networks websites,2 and speeches/reports from conferences and funding agencies (Courcelle and de Lattre 1996, Orsini 1999, Orsini 2001, Light and Chibembe 2003). Start-up funding to capacitate the national and regional networks was provided by the United States Agency for International Development (USAID) followed by the European-based Organization for Economic Cooperation and Development (OECD). Belgium, France, and Switzerland also contributed funds. A consultant

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from USAID, who was later joined by another from OECD, co-ordinated the network start-ups. They met with young educated, formal sector entrepreneurs and identied potential network members from workshops, business organizations, embassy lists, agencies, and personal contacts. Meetings and training workshops were held in each country to recruit members and organize national networks (Courcelle and de Lattre 1996).3

3.

Data samples and research methods

The purpose of this study is to: (1) identify the demographic characteristics, behaviours, and ideologies/attitudes that collectively distinguish these entrepreneurs, and (2) examine how they use the enterprise networks to accomplish their goals and objectives. The data are based on the authors research consisting of interviews with 57 network members from 10 African countries. This sample represents slightly more than 10% of the total membership of the three regional networks. During the period in which the interviews were conducted (2000 to 2004), the networks had about 550 members. Additional information on the origin, organizational structure, and operations of the regional enterprise networks was obtained from their newsletters, websites, as well as from interviews with ocials and members of other business and economic development organizations in the relevant countries. The national networks included in this study are those of Ghana, Senegal, Mali, Ethiopia, Kenya, Uganda, Botswana, South Africa, Zambia, and Zimbabwe. They were selected for the following reasons. In West Africa, Ghana formed the rst national network and served as regional headquarters; Senegal was the site of the regional secretariat; Mali is an active network with strong connections to the secretariat. In East Africa, Ethiopias network served as regional and panAfrican headquarters, Kenya is the economic hub of East Africa; Uganda was the rst EAEN regional headquarters. For southern Africa, Botswana was initially the regional headquarters; and South Africa is the regional trade giant. The authors visited these seven countries to interview network members. One of the authors interviewed members from the Zambian network (the subsequent regional headquarters) and the Zimbabwean network at a pan-African Network conference in Ethiopia. A colleague of the authors in Mali interviewed two network members. Table 1 shows the number of network members interviewed out of the total national membership by country. Most interviews were conducted from 2001 to 2003. Additional information was obtained from interviews in 2004 with members from Botswana, Ghana and Ethiopia. Network members were contacted by mail, fax, and telephone. Telephone land lines were often non-functioning, so cell phones provided direct access to business owners. Names and businesses of most network members were obtained from each networks website while they were operational. Others were referred by members. Data on individual entrepreneurs and their businesses were obtained from personal narratives. Table 2 lists the open-ended topics on personal/professional backgrounds and entrepreneurial strategies that guided the interviews. Heads of the country/ regional secretariats were interviewed for their perspectives on structure, operational activities, and organizational constraints. Data from the narratives were analysed using WINMAX (a software programme that organizes qualitative data into designated categories) to construct proles of network members and the regional

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Table 1 Network members interviewed (n 57) by business position, acquisition and business enterprise.
Business position Business acquisition n 57 Members National network interviewed membership Owner Manager Self Family SOE* 6 3 13 11 2 5 6 8 1 2 57 14 7 45 11 17 18 10 10 10 8 6 2 13 11 1 5 5 8 1 2 54 95 1 6 1 9 10 1 5 5 6 1 2 46 85 1 1 Business enterprise Single 4 3 1 9 8 1 3 5 6 1 2 39 72 Multiple 2 2 4 3 2 2

Country Botswana Ethiopia Ghana Kenya Mali Senegal South Africa Uganda Zambia Zimbabwe Total Percentage

1 1

3 5

6 11

2 4

15 28

Source: Authors data. *State-owned Enterprise.

networks.4 Proles are based on demographic characteristics, business activities, behaviour, and network relationships. To understand the business climate in the countries involved, other business persons and nancial and donor personnel were interviewed.5 Secondary data were collected from publications and the Internet.

4. 4.1

Findings: proles of network members Demographic characteristics of network members

This section considers age, education, international experience, ethnicity, gender, and family background. Most new generation entrepreneurs were relatively young (late 20s to 40s) when the networks were established. Network members are highly educated. In the sample, 92% attended college and half earned advanced degrees (MAs, MBAs, JDs, and PhDs). The majority (85%) were educated abroad and some had held professional positions at rms in the USA, UK or Europe. They returned to Africa during the past 10 years in what has been referred to as a reverse Diaspora to start their own rms (Orsini 2001: 22). Although they profess a global outlook, network members personal and professional orientation is focused on making it in Africa. Some observed the struggles of parents or other African emigrants living as foreigners overseas, and thought that in spite of the economic conditions in Africa, they would have an advantage in their own countries. A Kenyan network member who studied in India and the UK was anxious to return to Nairobi to start a business after receiving his MBA. A Ugandan network member received a permanent residency green card through the US State Departments diversity lottery but resides in Kampala and uses her visa to facilitate business travel to the USA. Another disregarded his fathers advice against returning to Ghana during dicult economic conditions in the mid-1990s but reported that he had never regretted coming back.

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Table 2 Interview narrative discussion topics for network members.


Narrative questions category 1. Identication Topic Name Title Address Gender Age Education Family background Marital status Business type Local/national/international Business history Previous business experience Other businesses owned Management methods Ethics Trust Local National Regional Local National Regional Advertising Marketing Internet usage, websites How started in national/regional network Direction of national /regional network Expansion of national /regional network Objectives and activities Achievements Future goals Local/national Regional International (outside Africa) Professional Business Interactions with other members Credit and nancing Leadership Directions and plans Visions

2.

Demographic information

3.

Business prole/description

4. 5.

Members business background Principal business transactions

6.

Business constraints

7.

Business enablers

8.

Business support operations

9.

Regional enterprise Network membership

10.

Professional connections/networking

11. 12.

Membership in other organizations Womens and gender issues

13.

Future business goals

There is no database on racial or ethnic categories of network members. The majority are black Africans; we met an Asian (Indian) in each of the Kenya and South African networks, one white in South Africa, and an Arab Sudanese in the Ghana network. Members view themselves as part of an urban community of business and professional people rather than of a particular ethnic group or geographical area. One member from Uganda said that, contrary to traditional African views, each person has a rural village to call home, Most of us were born here in Kampala and will live and die in the city. As populations in capital cities have increased dramatically, the middle and upper classes, as well as the urban poor, are several generations removed from their rural villages. Most middle and upper

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class urban residents attend universities, live cosmopolitan lives, and have professional occupations. Network members fall in this category. Those members in agribusinesses may work in oces on their farms, but they reside in the nearby cities. Social and professional relationships among members form across kinship, ethnic and spatial lines. Women comprise 23% of total network members. Our sample consists of 33% women members because we sought out women members to learn of their business experiences. The number of women in the networks varies from 40% of the 45 members in Ghana to none among Ethiopias seven members. The national chairs of several country networks are women (Botswana, Kenya and South Africa). Women members say that their gender is not disadvantageous to their status in the networks or their business relationships with other members. All of the women network members own or manage formal sector companies. Women, they note, face dierent issues in society at large such as childcare responsibilities, restricted access to credit and land ownership, and gender bias. Network members try to address these issues. They act as spokespersons for womens issues in their countries, sponsor training courses for women entrepreneurs (from micro- to medium-scale businesses), and hire female managers. Others have assisted women market traders with bookkeeping skills (Spring 2002). However, their primary focus, like their male counterparts, is on innovating and expanding their own businesses. Some women conded that one of the benets of joining the networks is the opportunity to interact with other business women who share similar views and experiences. Female network members complain that donors and even scholars do not dierentiate the segments of the entrepreneurial landscape in Africa. Instead, they lump new generation entrepreneurs with micro-entrepreneurs in the informal sector. For example, a woman from Uganda declined an invitation from a donor agency to join a weekly forum with traditional micro-enterprise women entrepreneurs. It is likely that the advice and assistance that she sought to upgrade and expand her business would not be found in this group. The enterprises of these network members fall into a gap that is served neither by donors nor by nancial institutions. Donor agencies provide small loans (e.g. US$50$100) to micro-enterprises; banks loan multimillions to large corporations; but the mediumsized loans (US$50 000 to $1 million) that they seek are hard to obtain. Women network members sympathize with micro- and small-scale entrepreneurs in the informal sector but suggest that there are many organizations that focus on this segment. Some network members work with female micro-entrepreneurs. For example, in Ghana and Uganda, female network members helped to revise municipal zoning regulations to benet market women. In Uganda, a network member buys wholesale products for her company from village women. Network members, in general, recognize the important role that the large informal sector plays, and realize that improvements in the business/economic climate will benet all levels of businesses. About 75% of both male and female network members are married and have children. Their spouses own other businesses or share ownership in the same company. About one-third (31%) have parents who are/were business owners, and 17% have parents who are professionals. Parents of the others are/were civil servants, government ocials, and politicians.

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BARBARA E. MCDADE AND ANITA SPRING

Network members were queried about their visions for the future, attitudes toward their professional lives and network membership, their perspectives on business enablers and constraints, and on Africas economic prospects. A discernible quality is their almost palpable optimism: they are enthusiastic about their businesses and economic development prospects. This was somewhat of a surprise to the authors given the existing economic conditions in Africa. The network members were optimistic about the mission of the regional enterprise networks. However, by 2004, concerns over distribution and control of donor funding clouded WAENs and EAENs relationship with the donors. As a result, funding for the regional secretariats ceased (McDades personal communications 2004). SAEN continues to be funded and active although some of its constituent national networks are now inactive. The entrepreneurs, for the most part, have continued their professional and business relationships with each other despite the demise of ocial activities in the regional networks. The following themes emerge from an analysis of the interview data: (1) the importance placed on nancial transparency and ethical business behaviour; (2) the practical signicance of organizational management; (3) initiatives to obtain information and update technology; (4) trust of fellow network members; (5) the desire to expand intra-Africa and South-South trade and investments; (6) the consistency of members with optimistic, can-do attitudes; and (7) establishing co-operative relations with government, but abstaining from patronage and rent-seeking. Network members say that these are guiding principles that they try to incorporate in their business and professional activities. Compared to network members, other African entrepreneurs interviewed seem to be just as hard-working and committed to success, but they express more pessimism (or certainly less optimism). They anguish over business constraints such as the poverty in their countries, poor infrastructure, political and/or regulatory instability, inadequately trained work-force, eects of HIV/AIDS on employees, and corruption, among other things. They say that they feel powerless to change these conditions. Network members, by contrast, express an attitude of empowerment and condence in their ability to help to improve these conditions. They do not discount the problems they face. Rather, they have challenged and changed these conditions. Network members have a global business outlook while maintaining an inward focus that interprets Africas economic crises not as hopeless, but as fertile ground for business opportunities. They view the role of business on a broad scale: the ability to address the unmet demands for goods and services throughout the continent. Although they are interested in developing markets outside Africa (e.g. utilizing recent US trade initiatives such as the Africa Growth and Opportunity Act/ AGOA), their main focus is on increasing trade and commerce within Africa.

4.3

Business experience and ownership

Forty (70%) of the network members interviewed worked in managerial positions in other rms before starting their own enterprise. Of these 42% had been employed as managers or other executive positions in major national rms in their own countries; 25% had worked in a family-owned business before starting their own enterprise; 23% had been employed in managerial positions in a foreign rm before they returned

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to Africa; and 10% worked (two were still employed) in the Africa oce of a multinational rm. Before returning to Ghana and starting his own nancial services company, a WAEN member received his MBA in the USA, and worked for several years for a Fortune 500 nancial services corporation in New York (also written about in Fick 2002: 2425). Before returning to Kenya, an EAEN member owner of a speciality bookshop in an upmarket mall in Nairobi worked for a major non-governmental organization (NGO) in Atlanta, Georgia. A SAEN member and architect in Botswana worked at an architecture and real estate development rm in Wales before returning to Gaborone to start a similar business. A Ugandan EAEN member is the co-owner of a housing construction company in Florida. Table 1 shows that 95% of the network members are business owners, while 5% are managers in large private corporations (often at the level of chief executive ocer, CEO, or chief operating ocer, COO). Network members acquired their companies in a variety of ways. Most (85%) started the business themselves; 11% acquired the family business; 4% acquired a state-owned enterprise (e.g. a thread company in Ethiopia, a glass factory in Ghana).6 They nanced their business start-ups in a variety of ways. Some used savings from professional jobs or revenues generated from another business. Others received loans and gifts from parents, other family members, and spouses. Some were able to secure start-up nancing and letters of credit from banks because of their professional reputations.7 None received startup funding from government or donor agencies, but a few received grants for product development and marketing from NGOs, government business promotion units, and development agencies.

4.4

Business practices and activities

Network members incorporate modern management practices in their business operations. They carry out market research to expand their customer base, use data for planning business ventures, provide training to develop sta capacity, and delegate responsibilities among employees. Network members also share services in kind: a Ugandan member designed a marketing promotion campaign for another members radio station. A Senegalese member created business feasibility studies for network members in Mali. They also travel for business activities: 62% travelled outside Africa on business. A study conducted during the Millennium Conference by On The Frontier (OTF, an international consulting rm) showed that network members, on average, made more trips abroad than entrepreneurs in a previous OTF survey of ve non-African countries. The OTF study (section 6) noted that 62% of respondents spent $500 or more annually on resources to help them nd solutions to their companys problems. The owner of a multi-location automobile service enterprise in Kenya hired a Canadian consulting rm to organize a personnel development retreat to upgrade employees management skills, improve team spirit, and formulate a collective company vision. 4.4.1 Focus on one business Ownership of several businesses to spread nancial risks in uncertain economic environments is common practice among entrepreneurs in Africa. This practice varies among the network members interviewed. Table 1 shows that a large majority (72%) own only one enterprise, while 28% own several companies. Some network members

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add an auxiliary operation to augment or expand their rms functions. For example, the owner/partner in an architectural rm added land development survey services (Botswana); an electronics equipment manufacturer added design and installation of electronic conference displays (Kenya); and an auditor/accountant added real estate services (Senegal). 4.4.2 Employee hiring based on skills Network members said that their hiring decisions are based on the prospective employees skills and experience rather than on kinship. They may employ family members but the relative must be qualied or trainable. Network members are concerned about the insucient supply of job applicants with high-level skills. A few network members addressed this by setting up commercial schools that oered training in business management and computer skills. A Ghanaian network member, for example, provided on-site training for her employees. Another started a computer training school; he plans to hire employees from among its graduates. The owner of a coee processing factory in Ethiopia started a school to improve English language skills. The OTF study found that although network members were most concerned about developing eective strategies to identify and target customers (which is also the rst concern of entrepreneurs in its ve-country sample), the second most pressing issue was nding skilled employees. 4.4.3 Trust among members and ethical business practices Network members say that they are committed to ethical behaviour in their business and professional lives. Business transparency and ethical behaviour were two of the most important criteria for evaluating prospective members. A Senegalese network member chairs that countrys chapter of Transparency International8 that has 300 members. He helped to write and implement a code of nancial and accounting practices that was adopted by businesses in 20 Francophone countries. The networks foster trust among members within a country and between members in dierent countries and regions. For example, another Senegalese network member declared that when she travels to Nigeria, I wont even get o the plane unless I am met at the airport by another network member. This sentiment is consistent among network members who believe that a major advantage of the networks is to build trust among African business persons. A Ugandan network member feels comfortable with his decision to venture into Zambia and Tanzania; he trusts the recommendations for prospective partners and advice about business conditions he received from network members in those countries, even though he had not met them. One of the founding members of WAEN said that his involvement in the network prompted him to create a regional investment fund that could be accessed by WAEN members in various countries. He said that the fund was possible because of trust built among WAEN members. To ensure scal transparency, most network members use accountants and independent auditors to maintain business records. They do not co-mingle business and family funds, practices often reported among entrepreneurs in Africa. To maintain the environment of trust, the network membership is selective. Prospective members are identied through social and professional contacts. Before an individual is invited to join, a background check is done. The persons reputation and information about his/her business activities are important. Additional membership requirements include: company owner or employed as the companys CEO or COO, personal

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and professional integrity, willingness and ability to contribute time and nancial resources to the network (membership dues9 and costs of attending conferences). For example, the head of the Ethiopian Enterprise Network said that he advanced $100,000 from his own funds toward the cost of the pan-African Enterprise Network Millennium Conference. Reimbursement for this expense from the donor agency took 10 months. 4.4.4 Sharing information Network members keep in touch with their counterparts via cell phone, e-mail, and fax, attend meetings, and participate in inter-country conferences. They openly discuss their business operations to identify strategies that may resolve problems. They are generally not secretive, as has been reported for other entrepreneurs in Africa (Kallon 1990, Ukaegbu 1998). They regard their colleagues, even in the same industry, as collaborators rather than as competitors, and they share information. The OTF study concurred that members prefer to discuss solutions to problems among themselves. Members help others to make business connections and they reach out to others for advice and assistance. They are willing to share information about their lifestyles, network activities, and business operations, in general, and were co-operative in responding to our questions. When a Ugandan member decided to do product sourcing in South Africa and Kenya, he contacted EAEN and SAEN for information and advice. EAEN set up a Book Bank oering business and entrepreneurship publications for members to reference. SAENs website (http:// www.saen.info) displays information (dated to 2002) about what is happening in the southern Africa region. According to one Senegalese network member, the main asset of the network is the ability to pick up the phone and get the information you want from a network member; and that is forever, it does not go away. A network member from Kenya says that she regards the network as a way to make friends with people with whom she shares interests. Only through the networks has she come to meet people from all over Africa. Her family lives in western Kenya, near the Uganda border. When she visits them, she drives to Kampala to have lunch with network members. She says that such relationships have been more valuable to her than money. Network relationships have persisted after the end of donor funding and the dissolution of the formal organizational structure in some countries.

4.5

Types of businesses

The majority (70%) of network members own service rms. The services include advertising, computer training, consulting services, nancial services (such as banking and investments), information-technology, legal services, printing, public relations, and travel planning. There are fewer manufacturing rms. In the sample, 16% own factories: 3% are involved in textiles production (e.g. a thread factory in Ethiopia) and 13% manufacture products such as furniture, nished wood, and glass containers (Ghana), electronic and solar equipment (Kenya), electrical control systems (Uganda), and diamond jewellery (Botswana). Some 8% of those interviewed are in agribusiness: coee and cut ower exports (Ethiopia); poultry farming and agro-processing (Ghana); horticulture and ower exports (Kenya). A few network members (6%) own retail stores, and one operates a construction company.

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Among network members rms, even when the product is traditional such as an agricultural commodity, the way in which it is produced or marketed is innovative.10 Growing ornamental owers for European markets was not a major export product in Africa until the mid-1980s (Kimenye 1996). While there are non-network members in these enterprises, the largest rose growers in Zambia and Ethiopia (a woman and a man, respectively) are network members. In Kenya, a female network member grows roses on 20 hectares in controlled-environment greenhouses. After cutting, they are packaged and sent the same day by airfreight to the Netherlands. In Ghana, a printing company established by a female network member uses state-of-the-art computerized machinery, and has ventured into the highly specialized process of printing government securities and nancial documents. An EAEN member and television station owner in Uganda produces investigative reporting features for local news programmes (see also Fick 2002: 207209), occasionally purchased by global broadcasters BBC and CNN. The WAEN member owner of a large-scale poultry processing plant began selling refrigerated dressed poultry parts, an innovation for Ghanaian consumers, accustomed to buying whole live chickens. Another Ghanaian WAEN member started a factory to manufacture window frames and ornamental wooden doors. These products add value and increase revenues, compared to the raw timber that his father had exported. Size of businesses as indicated by number of employees and revenues varies widely among network members. Number of employees ranged from three in a newlyestablished travel agency in Kenya to over 400 at the Ghanaian poultry processing plant. Revenue data were not requested in the interviews, although owners sometimes volunteered them. During site visits, an estimate of the value of company assets and revenues was made by observing physical facilities and equipment, types of product or service, and reported marketing and distribution strategies. The national co-ordinator of WAEN reports that revenues of members businesses range from US$300 000 to US$10 million annually. Orsini (2001) reports that network members businesses have ve to 50 employees, and an average annual turnover of US$1 000 000.

5.

Findings: goals and achievements of the networks

The primary goals and objectives of the regional enterprise networks are: (1) to expand regional (intra-Africa) trade; (2) to improve the business climate within countries by maintaining ethical standards among members and serving as advocates on behalf of the business communities with government and other institutions; and (3) to increase capital accumulation for business and investment through the creation of venture capital funds (VCF). The networks have developed alliances with older institutions to deepen regional integration. These include regional economic institutions such as the Economic Community of West African States (ECOWAS), Union Economique et Monetaire Ouest-Africaine (UEMOA), Southern African Development Community (SADC), East African Community (EAC), and the Common Market for Eastern and Southern Africa (COMESA). SAEN signed a Declaration of Intent with COMESA in 1999 for cross-border trade, agribusiness, tourism, telecommunications, human resources development, business and nancial services, light manufacturing, trade, and joint ventures for privatization (SAEN 1999: 1, Southern African

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Development Commmunity [SADC] 2000). WAEN gained observer status at ECOWAS meetings in the 1990s.11 A Kenyan member expressed his excitement about the revival of COMESA, because it could stimulate trade among the countries in eastern and southern Africa. He said, Kenya has a market of only about 30 million people but with COMESA, my market will include the 200 million people in this region. To put the need for the regional networks into perspective: from the 1970s to the late 1990s, intra-African trade was only 4% of African exports and imports, increasing to 7% from 1998 to 2000, and to 10% by 2002 (Dicken 2003). By comparison, the percentage of intra-regional trade in other world regions is 67% in Western Europe, 50% in Asia, 40% in North America, and 15% in Central America.

5.1

Goals and achievements: expanding regional (intra-African) trade

Regional enterprise networks want to enlarge the markets for African businesses by expanding beyond local borders. With the exception of Nigeria, South Africa, and Ethiopia most sub-Saharan African countries have small populations with a limited consumer base. The former head of AEN, based in Ethiopia, said that the enterprise network concept has made members more attuned to cross-cultural and cross-country issues within Africa.
Now, they think at the macro-level and not just xate on local issues. Macro issues have been introduced by the network members to other entrepreneurs in Ethiopia, who now consider selling and sourcing within the region instead of looking only to Europe, the USA, or Asia. They are beginning to realize that there is a lot of dynamism in Africa. You see your own business within a regional context.

Since joining the enterprise networks some members are doing business with rms in other African countries. However, other members contend that there is more talking than actual business being transacted. A Kenyan network member says that a Tanzanian network member helped her to obtain a business licence in Tanzania in less than a month, a process that can take up to a year. A Ugandan network member said that he joined EAEN to do business and observed, Now when I go to another country like Kenya, Zambia, or Burundi, my entry points are better. It is almost like having a family member to deal with; we can use their oces when we are there. As a result, he now exports day-old chicks to Burundi and plans to expand to Ethiopia. A Ghanaian member complained about not receiving much help from the network in facilitating her transactions in Cote dIvoire, but acknowledged being more comfortable travelling alone to this country and others, because you can always call the network. A network member from Uganda said that knowing network members in other countries increased the productivity of his business travels to neighbouring countries. Other examples include a magazine publisher in Uganda who negotiated the best deal for printing through a network member in Nairobi. A Kenyan network members advertising and public relations rm completed interior design projects in Uganda and Tanzania, and designed corporate trade exhibitions in Tanzania. A Ugandan network owner of an advertising/PR rm negotiated contracts for public relations work at branch oces in Kenya. He also collaborated with a Kenyan network member to design animated electronic outdoor displays and indoor exhibitions. Members

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share information and provide business opportunities for each other within their own countries. Through his network member contacts, a lawyer in Kampala expanded his client base to other parts of Uganda. Members say that their experiences show that the networks are more eective than traditional business organizations such as chambers of commerce and manufacturers associations (to which only a few of them belong). Even though they are eligible, most network members neither join such chambers nor attend their meetings.12 They also belong to professional associations (e.g. architects) and sometimes to employers federations. Removing trade barriers that exist between the Francophone and Anglophone countries is a goal adopted by WAEN. Senegalese network members note that some business persons in the Francophone countries still prefer trading with France, but network members in Senegal want to see more business partnerships with rms in non-Francophone countries. To this end, the Senegalese owner of a water bottling company collaborates with network members in Ghana and Ethiopia who own related businesses. NetForce is a sub-network of accounting rms within WAEN. Spearheaded by a women member, NetForce standardized accounting practices and formats at the largest accountancy rms in eight Anglophone and Francophone West African countries. Through SAEN, a venture capitalist from Zimbabwe invests in a manufacturing project in Malawi. The SAEN website notes that cross-border achievements include: Malawian and Zambian network members together formulated the legal structure of the Malawi Stock Exchange; Mauritius network members created a database for investors in the region; Mozambique network members staged a forum with the private sector and government; Namibian and Zimbabwean network members nalized a joint venture project in the Democratic Republic of the Congo (http://www.saen.info/saen/frameset.htm).

5.2

Goals and achievements: advocacy with governments and regional/international institutions

One of the basic tenets of network membership stated in newsletters and other publications is that the national networks are strictly apolitical (WAEN 1993, EAEN 1999, SAEN 1999, Orsini 2001). The networks do not support or campaign for particular parties or politicians. However, apolitical as used by network members does not mean steering clear of public engagement. They do not believe in cronyism and political patronage; and they do not take kickbacks or engage in practices such as bribery and giving gifts to inuence government ocials. A Senegalese network member meets with the president and other government ocials in his role as head of a national professional association. The government hired him as a consultant on urbanization projects, for which his company provided technical expertise. He said that he would not rubber stamp projects that would be contrary to the public good just to gain an advantage for his own business. The Senegalese member of the WAEN secretariat said that the larger issues of global strategies and informed economic policies are more important than simply brokering business deals. Network members in Uganda gained a seat on the board that regulates import taxes. They use this position to advise private sector entrepreneurs on how to manage and schedule their tax obligations. The Uganda network is a member of the Private Sector Foundation (PSF) that lobbies for better business

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regulations, equitable taris, etc. When asked about a Ugandan network member who was running for parliament, Uganda network members explained that business interests should be represented in parliament. In 2000, Botswana Enterprise Network members who own information technology rms formed an organization that advocates for indigenous technology companies, Citizen-Owned Businesses in Information Technology [COBIT]. They share strategies to compete for government contracts against foreign-owned rms (COBIT 2000). Their goal is to be allocated a percentage of all government contracts. Network members and national chapters have used network conferences to serve as forums to communicate their interests, as well as to listen to their heads of state. President Museveni spoke at the EAEN workshop in Kampala, Uganda in 1999; Ethiopias Prime Minister Meles opened the Millennium Conference in 2000; President Santos (also president of the African Union that year) opened a regional meeting in Angola in 2002 (EAEN 1999, 2000, AEN 2000, SAEN 2002). A Ghanaian network member said, We want to achieve a voice and do business without being an appendage to government. Hence, they see no contradiction in stating that African entrepreneurs must join together with government and civil society to ensure that corruption is stemmed (EAEN 1998: 2). Regional enterprise networks want to redene the rules and manner of engaging government ocials, and increase public-private sector communication in an open, ethical manner. They feel that this will improve the conduct of business and benet the private sector as a whole. This contrasts with how business politics is usually played, i.e. to benet specic business owners. The regional enterprise networks advocate for business-friendly laws and regulations, government policies, and programmes. From an analysts viewpoint, this may seem political because network members participate in government dialogue at the highest levels. However, the concept of being political in Africa usually means to engage in political cronyism, rent-seeking, bribery, and corruption. These are activities that the networks work against. Network members point out that they reject government patronage. They initiate and maintain dialogue with those ocials who have the power to reform the regulatory environment, but members are open and transparent in their activities.

5.3

Goals and achievements: national and regional venture capital funds

Another goal of the national and regional networks is to raise investment capital. In 2000 a Kenyan network member organized an international conference in Nairobi that was co-sponsored by the World Banks International Finance Corporation (IFC). Network members, representatives of major donor agencies, and ocials of Kenyan banks participated. WAEN established the West African Enterprise Fund (WAEF) in 2000 and raised $15 million of private capital to promote regional trade and investment (Orsini 2001, Ofori-Atta 2003). WAEF invested capital in a bank in The Gambia, The Trust Bank Ltd. This investment was the rst crossborder listing on the Ghana Stock Exchange. A Zimbabwean network member spoke at the Millennium Conference on strategies to create successful venture capital funds (EnterpriseAfrica 2000: 3234, Spring 2000). Zimbabwe network members invested VCF contributions in a national money market account that paid a 60% return in 2000 (high ination meant that this was not a large amount). The Zambian

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network has an investment fund, and the Ugandan network created a fund which makes short-term, non-collateralized loans to members. Future studies can evaluate the impact of these VCFs as they mature.

6.

Comparative data: ndings from the On the Frontier (OTF) survey

On the Frontier (OTF), an international consulting company based in Washington, DC, conducted a survey of network members at the pan-African Networks Millennium Conference in 2000. Data were collected on age, gender, education, type of business, number of employees, business practices, Internet usage, networking behaviour, and travel. Sixty surveys were completed, analysed, and the ndings were presented at the conference.13 OTF compared its data from network members with data from its previous survey of 1364 entrepreneurs from ve countries: Brazil, India, Mexico, South Africa, and Vietnam (OTF 2000). The average age of network members in the OTF study was older than the entrepreneurs in their ve-country study: 10% were 2029 years old, 43% were 3039 years; 40% were 4049 years, and 7% were 5060 years. Compared to entrepreneurs in the ve-country study, network members travelled abroad more often (40% make ve or more trips/year; 30% make three to four trips per year; 17% make one to two per year; 8% travel less frequently; and 5% reported that they had never travelled abroad). OTF found that network members number one business priority is to develop eective marketing strategies. The second most pressing issue is to nd skilled employees. In the OTF study, 62% of the respondents reported that they spent $500 or more annually on resources to help them nd solutions to business problems. Compared to the entrepreneurs in the ve-country study, network members spent more on problem solving. We compared OTF data with our study data. Of the 60 network members responding to the OTF survey, 62% had undertaken graduate study, 32% were college graduates, and 6% had some experience of college. This is consistent with our data showing high levels of education among network members. The OTF study of network members had a preponderance of managers (90%), versus owners/presidents/CEOs (10%). This contrasts with our data in which most (95%) are owners rather than managers. However, we targeted network members who owned their own businesses, whereas the OTF survey was passed out to all network members attending the Millennium Conference. For types of businesses, the OTF study recorded 78% in services, 12% in manufacturing, 2% in agriculture, and 7% in other businesses. This is similar to our data reported in section 4.5. The majority of companies in the OTF study are small to medium (62% had fewer than 25 employees; 20% had 2550 employees; 10% had 50100; 5% had 100200, and 3% had 200500 employees). The OTF study found that 64% of its sample was involved in export trade. The responses indicated that these network members were more export-oriented than the entrepreneurs in the ve-country study. The majority of network members in our study also want to export to other countries and increase intra-African trade. In terms of contacts between network members, the OTF asked about the frequency of contacts by phone, fax and e-mail. The data showed that 35% had a few/week; 27% had a few/month; 22% had one or more/day; 10% had one/month; 3% had less

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than one/month; and 2% had one/week. The study asked about the use of the Internet: 95% used it for educational purposes; 91% thought it important to their business; 88% considered it to be a good source of business advice; and 86% said that it was a worthwhile expense. E-mail and accessing market information were the most common activities carried out on the Internet by the members sampled. One-third had a web site for promotional purposes. The OTF data supports the emphasis placed on networking and communication by the 57 network members in our study.14

7.

Discussion and assessment of network members and the regional enterprise networks Characteristics of network members

7.1

Most of the members of the enterprise networks are relatively young and well educated. They chose to go into business for themselves rather than to become employees. The tendency of young educated people to start businesses appears to be a global phenomenon. A 1997 poll of Generation Xers in the USA (men and women born between 1961 and 1981) revealed that twice as many wanted to start a business as wanted to become executives in a large corporation, and four times as many preferred self-employment over holding an important position in politics or government (Miniter 1997). In Europe, young people are reversing the deeply ingrained cultural aversion to risk-taking. A poll in Sweden showed that 32% of business students want to own their own companies within three to 10 years following graduation (Kahn 1999). China is also witnessing an emergence of young entrepreneurs in its privatizing economy. A study showed that the average age of rst-time Chinese entrepreneurs in 1999 was 37 years, and for women it was 34 years (Pistrui et al. 1999). 7.1.1 Womens representation in the networks An equitable gender representation is a noteworthy goal because African women are involved in all aspects of the entrepreneurial landscape from owners of traditional micro-enterprises to owners/CEOs of medium and large rms. Most networks have women members and some have women chairs. However, from its establishment in 1998 the seven-member Ethiopian network had no women members. This was in spite of the fact that the head of the 7000-member Ethiopian Chamber of Commerce in 2000 was a woman, and there are a number of large businesses owned by women (e.g. a construction company, a transport company, and a retail supermarket chain). In 2002, the Ethiopian network nally invited one woman (an attorney who headed an NGO) to become a member, but she declined. The Uganda and Senegal networks had two or three women (18% and 17%, respectively, of their total membership), while women in the Ghanaian network were 40% of its membership.15 7.1.2 Attitudes of network members Are the network members developing their own economic strategies for themselves and their countries, or have they merely accepted the donors promotion of Westernstyle capitalism? Although donors began the process of capacitating the

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networks, new generation entrepreneurs had already adopted ideas and strategies they observed to be successful in other countries and adapted them to the conditions in their own countries. According to network newsletters, a small group of entrepreneurs were already meeting to construct a dierent business ethos in the early 1990s before the bilateral and multilateral donors helped to initiate the networks (WAEN 1993, EAEN 2000). This group was the precursor to the Regional Enterprise Networks and their business and economic development ideologies were adaptive, rather than merely adoptive of ideologies from developed countries. The membership of the networks is small considering the large number of entrepreneurs in each country. Criteria for membership are selective and, accordingly, the networks seem to be like elitist clubs with exclusive membership practices. Network members argue that their commitment to ethics, transparency, accountability, and trust requires strict scrutiny of prospective members and that the evaluation process is not quick. Orsini (2001: 8) explains that maintaining a highly selective membership promotes strong cohesion among members, and this osets the traditional lack of trust among entrepreneurs who are not from the same family or ethnic group. Murphy (2002) reports that entrepreneurial networks help to establish trust and stimulate business activity. Are these network entrepreneurs elites? When applied to Africans, the label elite is usually inferred as being negative. African elites are viewed as pursuing their own interests without regard to the public good. Their pursuit of material possessions in societies of scarcity is decried as predatory. However, the network members believe that they have improved business practices, which will benet African economies. Network members are upwardly mobile entrepreneurs who are interested in economic and political reform. Their business ethics embrace prot-making not proteering. Their aim is to conduct business and advocate for policies that may contribute to economic equity. They are not elites in the more standard way (i.e. military or government leaders, aristocratic backgrounds, wealthy traders, etc.), although a few have such family backgrounds. Network members are elites in Africa because they are among the tiny minority who have acquired college/graduate degrees and operate successful companies. Whereas well-educated persons in African societies may have previously entered government service or worked for large corporations, the new generation considers self-employment to be an attractive opportunity, rather than an option of last resort. Studies show that educated entrepreneurs generally have more successful businesses in terms of revenues and longevity (McDade and Malecki 1997, Goedhuys and Sleuwaegen 2000). Network members emphasize working hard, being self-starters, having business savvy, using network contacts, being transparent, and refusing political patronage. 7.1.3 Business experience As noted in section 4.3 almost one-half (42%) of network members worked previously in major national rms in their own countries, one-third (33%) worked in foreign rms overseas or multinational corporations in Africa before starting their own companies. The other 25% worked in family-owned rms. However, their experiences at rms in advanced economies (with secure nancial institutions, sucient capital, surplus of qualied employees, reliable communication, transportation, and other infrastructure) may not be adaptable to conditions in most African economies. However, network members are not complacent with these experiences, so they make eorts to update their knowledge. The enterprise networks full some of these

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needs by organizing short-term courses and workshops, along with sharing of information among themselves. The knowledge and experience of the owner of a small rm are particularly signicant because the personal characteristics of the entrepreneur impact all aspects of the rms operations. It is even more signicant than for a large rm where the personal characteristics of the president or managing director have a lesser eect on overall operations (Olomi 1999). Competitive advantage and success of rms lie in their utilization of human capital (Manu 1999). This underscores the relevance of the high level of education and previous career experience among network members in this study. 7.1.4 Business practices The educational background and prior business experience of network members inform the way in which they conduct business. They emphasize modern management practices obtained from formal education such as writing a detailed business plan; hiring employees based on experience and formal qualications rather than kinship; hiring consultants to conduct employee relations workshops; using media advertising and public relations campaigns to reach a larger consumer market; adopting standard accounting and auditing methods for record keeping. They struggle to promote transparency and ethical business behaviour. However, conducting business in this manner is a challenge in an environment where a legacy of behind-the-scenes deals, cronyism, and political patronage is entrenched. Their inuence on the business climate might be more extensive if network members and the new generation formed stronger linkages with owners of micro and small informal and formal sector enterprises that comprise the vast majority of the entrepreneurial landscape. Network members are amenable to increasing their business activities with members in other countries, but they are challenged by institutional constraints such as Francophone and Anglophone divisions, government regulations and taris, and inadequate transportation and communication infrastructure. They counter by using technology (cell phones and Internet) and travelling to foster in-person contacts. However, the necessity of travel because of inadequate communications infrastructure adds to their cost of doing business. 7.1.5 Types of businesses A criticism of the networks is that the selection of members and their businesses is not representative of the diversity of businesses in their countries. Few of the businesses are manufacturers and that limits opportunities for backward and forward linkages. Some members want only a few types of businesses in each network to avoid competition, while members in other national networks want to have a critical mass of businesses in a few specialities so that they can collaborate. As membership increases, it is likely that there will be an increase in the variety of businesses in the networks.

7.2

Discussion and assessment of regional enterprise networks

7.2.1 Lack of integration with the larger traditional and informal business sectors Network members view themselves as dierent from the majority of small-scale formal business owners and all informal sector entrepreneurs, and they are. Network members regard these sectors as inecient, even referring to them as backwards. However, these backwards enterprises supply up to 90% of the goods and services

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in the domestic economies of most African countries. In a few instances, network members have utilized them as sources of primary inputs, but they have not taken the lead to establish linkages that could upgrade these enterprises. If the objective of the networks is to strengthen business linkages within Africa, this is where their eorts could be most productive. 7.2.2 Idealistic versus realistic goals of the networks Network members advocate and, indeed, try to adhere to their concepts of an ethical business environment. Some may appear to have a holier than thou attitude toward conventional business practices. However, their stance is more pragmatic than ideological; they truly believe that transparency and honesty promote eciency and strengthen the business community. They are concerned with results, not just ideology. Future studies should query whether or not African entrepreneurs on a broader scale perceive the need to change business practices and behaviours.

8.

Concluding remarks

This study evaluates challenges that the networks and their members face. These include: (1) the country, regional, and pan-African networks are small; (2) some country networks have few or no women members; (3) network members businesses are not representative of the diversity of businesses in the economy; (4) network members have not established linkages with traditional formal or informal sector small-scale entrepreneurs, which comprise most of the entrepreneurial landscape; (5) network members have not generated a large volume of business activity; and (6) their impacts are dicult to measure. Currently, the end of donor funding led to the closing of WAEN and EAEN regional secretariats, and inter-regional conferences have ceased. In a special arrangement with SAEN, donor funding continues along with intra-regional meetings and conferences. Most network members maintain their social and professional relationships in spite of the cessation of ocial activities in some of the national and regional networks. They continue to engage in commercial and investment activities. In addition, they continue to advocate on behalf of the private sector with governments. Major expansion of regional trade and regional economic integration remains a future goal rather than current reality. However, this small but growing segment of the African entrepreneurial landscape may serve as a catalyst to improve economic conditions and stimulate private sector-led development.

Acknowledgements The authors wish to thank the University of Floridas Center for Business Education and Research (CIBER) and Opportunity Fund Grant Program for providing funding for research trips to Botswana, Ghana, Ethiopia, Kenya, South Africa, and Uganda, and the Center for African Studies for one authors trip to Senegal. We would also like to acknowledge the assistance of Dr Delores Koenig who conducted the interviews with network members in Mali.

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Notes
1

9 10

WAEN is comprised of 13 countries: Benin; Burkina Faso; Cape Verde; Chad; Cote dIvoire; The Gambia; Guinea; Mali; Mauritania; Niger; Nigeria; Senegal; and Togo. EAEN has seven countries: Burundi; Djibouti; Ethiopia; Kenya; Rwanda; Tanzania; and Uganda. SAEN has 12 countries: Angola; Botswana; Lesotho; Madagascar; Malawi; Mauritius; Mozambique; Namibia; South Africa; Swaziland; Zambia; and Zimbabwe. Each Regional Enterprise Network is headquartered in the capital of one of the constituent countries (WAEN in Accra; EAEN in Addis Ababa; and SAEN in Lusaka). The pan-African network (AEN) was in Addis Ababa. The original regional enterprise networks websites were: WAEN (http://www.waenonline.com), EAEN (http://www.ugandacapitalmarkets.co.ug), and SAEN (http://www.saen.net). WAEN and EAEN websites have not been active since 2002. SAEN now uses (http://www.saen.info), although the most current information is from 2002. The networks receive support from a consortium of donors: USAID; Canadian International Development Agency (CIDA); French Agence Francaise pour le Development; Belgian International Development Agency; Swiss International Development Agency; the World Bank, and OECD (Orsini 1999, 2001, Light and Chibembe 2003). The approximate amounts and duration of donor contributions were: WAEN, US$3 250 000 (19922000); EAEN, US$855 000 (19982000); and SAEN US$970 000 (19982000), with an additional US$500 000 for SAEN after 2000 (Orsini 2001: 25). In using the WinMax programme, the analyst selects key phrases from the inputted text and assigns them to predetermined categories. The prole of network members is modelled from the demographic characteristics in the age, gender, education, and kinship categories. The business proles of the network members are derived from these categories: type of business; history and longevity; business transactions; business culture (ethics and practices); constraints and enablers; and future goals. Representatives interviewed from these support agencies are as follows: Botswana: Empretec, Citizen Owned Businesses in Information Technology (COBIT); Ethiopia: Association of Women Exporters; Ghana: Empretec, Amex, Womens World Banking, Association of Ghana Industries, Ghanaian Association of Women Entrepreneurs; Kenya: International Finance Corporation (IFC) and Africa Project Development Facility (APDF) of the World Bank, Micro-enterprise Support Programme (MESP), K-REP Holding (nancial services and business development), US Commercial Service, USAID; South Africa: Enterprise Florida, Business Women of South Africa, Transnet, Whiphold, Johannesburg Stock Exchange and its electronic trading coordinator, Strate; Uganda: US Commercial Service, USAID, Uganda Women Entrepreneurs Ltd (UWEAL), Private Sector Foundation, Uganda Export Promotion Board, Uganda Small-Scale Industries Association (USSIA), African Development Foundation (US-funded), Uganda Manufacturing Association. Also included were ocials in government agencies, industry and manufacturer associations, chambers of commerce, banks and lending agencies (NGOs), professional associations, and other international agencies (e.g. African Development Fund, World Bank agencies). Various individuals provided personal and agency assessments of business conditions in the respective countries. They were identied through referrals from network members, donor agencies, membership lists of businesses and other organizations, previous encounters at conferences, etc. Also consulted were publications from the above and other agencies, including the US Department of States US Commercial Guides and Country Reports, US Government Economic Outlooks for Ghana, Kenya, South Africa, and Uganda. The thread company had been a family business until the 1970s when it was appropriated by a socialist regime. The glass factory was purchased from the national government during the 1980s as part of the SAP divestiture scheme. Some earned high salaries in rms such as Morgan Stanley and Goldman Sachs before returning to Ghana or Kenya to start their own businesses. A few are currently employed with established foreign or domestic rms in Africa, and plan to use their savings to establish their own enterprises. Transparency International (TI) was founded in 1993. Headquartered in Germany, it has chapters in 85 countries. It claims to be the only international non-governmental organization devoted to combating corruption. In the international arena, TI raises awareness about the damaging eects of corruption, advocates policy reform, works towards the implementation of multilateral conventions and monitors compliance by governments, corporations and banks. At the national level, chapters work to increase levels of accountability and transparency, monitor the performance of key institutions and pressing for necessary reforms in a non-party political manner. National networks charge annual dues of US$250500 per member, and each national network contributes $2500 annually to its regional network. Pedersen notes that an important part of the business services in developing countries serves agriculture (1998: 1). This promotes product specialization by adding value to the primary commodity. Network members add value to primary agricultural commodities with business services such as branding ornamental owers for niche markets; packaging processed poultry parts rather than whole birds for smaller urban households; supplying chicken feathers to bedding manufacturers; and crafting wood doors and home decorations instead of exporting raw timber.

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12 13 14

15

SAEN is working closely with key strategic allies such as COMESA, SADC, and the United Nations Economic Commission for Africa (ECA) to help to full its mission. It also works closely with national economic agencies and many donor agencies, including the OECD, the World Bank, USAID, the Agence Francaise de Developement, Canadian International Development Agency (CIDA), the Swiss Cooperation, the Belgian Cooperation, and the European Union (EU). SAEN also has business ties to investor organizations worldwide, including the US Corporate Council on Africa, the German Afrika Verein, the British-African Business Association, the Malaysian South-South Corporation, and the Singapore Trade Development Board (http://www.saen.info). An exception is in The Gambia where a network member chairs the Chamber of Commerce. It is not known if the presenters made other uses of these OTF data. When compared to OTF surveys of entrepreneurs in other regions, the OTF reported that network members responded yes more often to the question, I often nd it helpful to exchange business ideas with other business people from inside my industry. The network members responded no more often to the question, I prefer to do as much problem-solving as I can without turning to other sources for help. SAEN 2002s mission statement specically addresses gender, although there is no assessment of progress: SAEN is a pro-active and dynamic private sector institution that in line with its vision seeks partnerships with the public sector, civic society and the international community, to improve the business climate and economic productivity. Further SAEN, through its Womens cluster and HIV/AIDS cluster seeks to contribute to redressing gender imbalances and contributing to the ght against the HIV/AIDS pandemic that is rapidly eroding the regions human resource base (http://www.saen.info).

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