Chances and challenges of African entrepreneurial activity in times of crisis

ABSTRACT

This special issue looks in new ways at the relationship between small-scale entrepreneurship, economic (and political) crisis, and the outcomes of neoliberal market economy in African countries. In other words, it studies entrepreneurial activities particularly of young people in crisis situations in contemporary African economic contexts through close-to-the-ground ethnography and an anthropological perspective. The contributions examine from the vantage point of the specific circumstances in their country – Rwanda, Kenya, Cameroon/South Africa, Southern Algeria, Burkina Faso, Nigeria – how young people work on their futures as entrepreneurial agents navigating between local settings, governmental regulations and (global) market relations.

KEYWORDS:

• Crisis
• entrepreneurship
• trade
• business
• youth
• Africa

Krise ist ein produktiver Zustand. Man muss ihm nur den Beigeschmack der Katastrophe nehmen (Crisis is a productive condition; it just needs to be freed of its catastrophic connotations).

Max Frisch, Swiss writer and architect.

The concept of crisis implies the comparison of an acute, destabilizing condition with another previous, ideal time or a place elsewhere in the world where things are or have been better (Larkin, 2016, p. 39; Whyte, 2008). This is irrespective of whether crisis is conceptualized as a temporary condition, implicating a time before and after the problematic circumstances (Koselleck, 2006) or a prolonged or even chronic and seemingly never-ending situation (Mbembé & Roitman, 1995; Vigh, 2008). Without the comparison of how things are and how they ought to be, crisis as an analytical term does not make much sense.

This special issue offers new insights into the relationships between small-scale entrepreneurship, economic (and political) crisis and the outcomes of neoliberal market economy in African countries. In other words, it looks at entrepreneurial activities, particularly those of young people, in times of crisis in contemporary African economic contexts, drawing on close-to-the-ground ethnography and anthropological perspectives. The articles in this special issue investigate how (mostly) the young work on their futures as entrepreneurial agents navigating local settings, governmental regulations and (global) market relations from the vantage point of the specific economic and political circumstances of particular African countries: Rwanda, Kenya, Cameroon/South Africa, Southern Algeria, Nigeria, Mali.

The complicated economic (social and political) predicaments that many African countries presently face contribute to (young) people’s crisis experiences, in particular, of relentless struggle, lacking opportunities and existential despair (Mbembé & Roitman, 1995). This situation is further complicated by a range of pressures that include an often difficult ecological environment, pressing market economy requirements, the prestige that formal employment brings or has brought (Banégas & Warnier, 2001) and family and community expectations that young people will contribute to their well-being, support parents and younger siblings, start a family, construct property, establish businesses and become socially responsible individuals.

In the past, youth could legitimately expect their elders to provide them with the means of accomplishing this stage of becoming grown-ups (with initiation rituals, tests of courage, providing a wife and property). During the twentieth century, in addition to these provisions and gradually replacing them, the completion of formal education and subsequent employment as a civil servant became the new role model to emulate (Banégas & Warnier, 2001; Larkin, 2016, p. 48). Civil servants had access to wealth through state employment and often used their salaries to support their entire extended families. After the economic and political reforms of the 1980s, the employment opportunities with the state drastically diminished in most African countries (Ferguson, 2006; Konings, 2011). Presently, neither the elders and local communities have the ability to provide young people with the means to make their futures nor does the state seem to take responsibility for the provision of acceptable prospects to its youth. Promises that the market economy would automatically sort the problem out have yet to come true. Young people are instead increasingly left to cope with the challenges of accomplishing growing up on their own and find their way as viable economic agents in their country or abroad. Their families, nonetheless, continue to expect them to contribute to their younger siblings’ education and their aging parents’ needs. Many feel their choices are limited to whichever informal economic activities they can establish themselves in or migration abroad (Lindell, 2010; Röschenthaler, 2017).

These critical individual situations are compounded by the more general economic, ecological and political crises in African countries. The resulting predicament has more generally been referred to as the symptomatic condition of ‘African economies’ or the ‘African continent in crisis’. This generalizing characterization, however, ought to be looked at from different angles. It neither applies to Africa as a whole nor to all individuals in the same way. There is not a single continental crisis; instead the types, extent and experiences of crises differ as they are locally rooted and perceived differently by individuals.

This special issue examines how local people, particularly the young, find ways to cope with the crises they find themselves caught in and of which they feel the need to get out (Vigh, 2008). Some manage to achieve this escape, while others face losses or find work at home or abroad. It studies individuals’ entrepreneurial urge to invest their energy, time and means, often taking significant risks, with the strong conviction that they will succeed, an essential part of the African entrepreneurial spirit (Ochonu, 2018). In these ventures, individuals often face the loss of their investments and lack prospects for advancement. Such times of disintegration, however, often also provide the foundation for creativity and opportunity. Economic and political crises have indeed been studied above all from the perspective of their disruptive and destabilizing consequences. However, African economic actors in crisis situations, whether these are short-term or perceived to be prolonged (Vigh, 2008), should not be seen as mere victims. As this special issue underscores, there are stories other than failure as well.

Africa and the experience of crises

While crises provoke hardship and economic disruption, they might also entail opportunities for entrepreneurial activities and innovation that otherwise would have been ignored. Crisis can be understood as a situation experienced as an existential threat that is often reified as a disruption of the past status quo and an ideal picture of how things ought to be. Roitman (2016) points to the importance of understanding the concept of crisis as a narrative. Drawing on Koselleck’s (2006) seminal work on the history of the crisis concept, Roitman highlights that the term crisis signifies a diagnosis of the present, which is often implicitly directed towards a norm (Roitman, 2016, p. 25), a criticism that in African examples often refers to a norm that the state has been unable or reluctant to fulfil.

Koselleck’s merits above all include the discovery that the concept of crisis was at first understood to be timeless, as it was only from the eighteenth century onwards that it became connected with particular historical periods of time. Since then, periods of time have been evaluated as being good or bad, as productive or as a setback, normality or crisis, and crisis has been seen as a marker of unique historical events that signify a basic break with the past and often mark a fundamental transformation of social relations (Koselleck, 2006, pp. 360–365, 389; see also Roitman, 2016, p. 27). The prominent example often cited is the social transformation through industrialization with the capitalist market economy in Europe – the focus of Karl Marx’s criticism of political economy and the crossroads at which Schumpeter’s (1947) notion of the industrial entrepreneur emerged. Before that time, crisis was understood as a human condition associated with existential ideas of life and death, in reference to biblical imaginaries in Europe. From then on, the concept implied the existence of crisis-free and well-balanced historical periods of time before and after a situation of crisis.

Classical anthropology applied this understanding to rites of passage and social dramas (such as Max Glickman’s, Victor Turner’s and Arnold van Gennep’s studies on conflict, afflictions, life cycle and seasonal crises), which do not refer to historical time but to cyclical or existential conditions. In a rather cursory way, John Comaroff combines Kosellek’s dialectics of crisis with the Manchester School and their studies of the capacity of crisis rituals as cycles of rupture and their repair to reproduce social systems and the order of values on which they are predicated. He also points to the repetitive nature of crisis, noting that ‘crisis self-evidently is [not] always reproductive. But it frequently is’ (Comaroff, 2011, p. 143).

Different from the presentation in classical ethnographies, rituals have not only been religious and crisis-solving but have also often encouraged entrepreneurial activities. They had to be organized and were sponsored by viable individuals or families. In some regions of Africa, including southwest Cameroon, individual big men or women drew much prestige from providing the means for young people to have their initiation ceremonies and seclusion periods with artistic trainings. They organized subsequent festivities and performance events for them and their families, where the initiates presented their new status. The symbolic capital drawn from this prestige could later be reinvested in political aspirations. These cultural entrepreneurs thus created symbolic capital from life-cycle crises. Inspired by this model and drawing upon fears of losing their cultural identity and ‘traditional culture’, young people began to create performance groups and become themselves cultural entrepreneurs from the 1980s on, investing in costumes and symbols, recruiting members and performing for a fee when invited to perform at festivities (Röschenthaler, 2011). Hence, entrepreneurship and crisis are connected in many different ways.

The fundamental changes that African societies experienced throughout the twentieth century and beyond have also transformed notions of time and crisis and thereby both understandings mentioned earlier became increasingly entangled. Crisis, however, should not be imagined as coming only from the outside (European colonization of and policy implementation on Africa). As Larkin (2016, p. 46) noted, crisis is not simply external; it is beyond the moment of rupture. It is about reflexive accounts and less about the disruptive events as such: ‘Crisis is about risking and falling, about stability and its sudden disappearance. […] A crisis is a series of events in the world that gives rise to an affectual sense among participants and observers that things are not working as they should be, that they will not remain as they are, or that a future, once possible, is foreclosed’. Hence, crisis refers to the experienced situations and the narratives emerging from them that reflect the motivating causes of this experience. It is ambivalent and dynamic and always latently present; moreover, it takes threatening dimensions that might appear to sometimes be disruptive and at other times constructive.

At times, crisis strengthens group identity and forges feelings of social cohesion, differentiating a group against perceived others, producing inclusion and exclusion (Kirsch, 2006). As Assmann and Friese (1998, pp. 22–23) observed, this cohesion of collective identity grows to the same extent as crisis consciousness is incessantly stirred up (ein unaufhörlich geschürtes Krisenbewusstsein). Such insights draw on Georg Simmel who understood that the internal cohesion of a group depends on the degree of external pressure (quoted from Eriksen, 2004).

As much as crises have in common, they also differ greatly as they might concern individuals and their families or entire groups of people or nations, be short-term, recurrent or prolonged, rooted in the uncertainties of social change, economic downturn, political violence or governmental policies. One and the same difficult situation might push some people out of business, while it might encourage others to engage in activities of social and economic support or find opportunities for economic advancement. Thus, as entrepreneurial individuals quickly take economic advantage of the connectedness of emotional and existential experiences within crises, they also profit from individuals’ needs to both the mutual benefit and the detriment of those in need.

Entrepreneurial activity in times of crisis

Inspired by Brian Goldstone and Juan Obarrio’s edited volume, African Futures (Goldstone & Obarrio, 2016), this special issue focuses on the different meanings of uncertain economic and political situations in African countries and sections or strata of society. It analyses the challenges and chances of crises, the ongoing dynamics of social relations involved, in which entrepreneurial activities shift between the various social actors and in which being entrepreneurial is a virtue in itself. Entrepreneurial activity, however, ought not to be celebrated without warnings. As Mbembé (2016, pp. 212–213) rightly notes, in African countries, a ‘huge amount of labor is still put into eliminating want, making life possible, or simply maintaining it. People marginalized by the development process live under conditions of great personal risk. They permanently confront a threatening environment in conditions of virtual or functional superfluousness. In order to survive, many are willing to gamble with their lives and with those of other people’. Banégas and Warnier (2001) and others have elaborated on the cunning entrepreneurial activities that have emerged due to such conditions, which are also to a non-neglectable extent the result of neoliberal reforms (Comaroff & Comaroff, 1991; Ferguson, 2006). The creative adaptations to neoliberal tendencies that are explored in this special issue can therefore be seen as forming part of a resistant anthropology (Ortner, 2016).

According to classical economist assumptions, crisis situations are disruptive and disturb the balanced market equilibrium. Following such ideas, development anthropologists warned of the disruptive consequences of crisis with its destabilising effects on entrepreneurial activity in Africa and proclaimed that stable political conditions were imperative for African economies to develop (Spring & McDade, 1998). A closer look, however, reveals that the interrelations between crisis, entrepreneurship and markets are much more complex. Crisis might have different meanings for different entrepreneurs, depending on the diversification of their products, their nose for economic niches and upcoming demands and shortages. It is for this reason, then, that situations that bring bankruptcy for some might be the springboard of wealth-creation for others. MacGaffey (1987, 2002) documented how male and female entrepreneurs and traders in postcolonial Zaire (present-day DR Congo) accumulated wealth in a completely destabilized political situation and were even able to invest in infrastructure taking over state tasks (e.g., the construction of roads and bridges), which facilitated business. These entrepreneurs are the reverse figure of the industrial entrepreneur in Schumpeter’s (1947) sense who rather represents the disruptive figure that disturbs the balanced market situation and actively and deliberately creates crisis, with the thorough changes that his innovation brings about.

Indeed, scholarly reflection about entrepreneurship first came up in the context of industrial capitalism in the eighteenth century. Schumpeter, mentioned earlier, theorized the economic development role of the individual, who brings about change and innovation. Thanks to their personal qualities and psychological attributes, entrepreneurs were ‘capable of changing existing economic structures and habits. Among the entrepreneur’s personal qualities were their readiness to take risks and invest their capital, their vision to recognize market niches, and their courage to create new things under conditions of uncertainty and surmount social resistance against innovation’ (Röschenthaler & Schulz, 2016, p. 2). These entrepreneurs do not work to maintain their status quo but to transform society, which distinguishes them from farmers, artisans, traders, and company owners, who rather fear taking risks. In the African context, scholars, with some notable exceptions (for example, Nwabuguogu, 1982; see for a discussion, Ochonu, 2018), considered entrepreneurs as being non-existent in pre-colonial and colonial times, whereas during postcolonial time, they focused above all on African entrepreneurial underperformance. In the 1980s, the concept of the entrepreneur was gradually revived and scholarly work increasingly acknowledged a striving African entrepreneurial activity, both historically and in the present (Hopkins, 1988; Coquery-Vidrovitch, 1983, 2002; Ellis & Fauré, 1995, among others, see Röschenthaler & Schulz, 2016, pp. 3–4). In the 1990s, the World Bank celebrated entrepreneurs as the driving force of long-awaited development. The term was henceforth applied very broadly to various economic actors from factory owners to individual street vendors (Spring & McDade, 1998).

Africa was largely spared the profound social disruptions that industrialization – i.e., the machinations of the industrial entrepreneur figures – with expropriations of farmers and the resulting landless masses of industrial wage labourers produced in European cities. Since colonial times, Africans were, however, confronted with the need to produce pecuniary means more than ever before, as they were gradually integrated into the global market economy. As mentioned earlier, the quest for employment was served by the state as the largest entrepreneur and employer and by a few mostly state-owned or multinational industrial enterprises in the postcolonial era. This contributed to the fact that politicians and civil servants became the new big men, with their own variation of entrepreneurial activity (Médard, 1992; Röschenthaler & Schulz, 2016).

While large-scale private entrepreneurship was discouraged during most of the twentieth century, entrepreneurial activities thrived in what has been called the informal economy (Hart, 1973; Meagher, 2010; Tranberg Hansen & Vaa, 2004). The structural adjustment programmes of the 1980s sought to reduce state expenses and debt, create competition, support entrepreneurship and give the economy a healthy push. It also aimed at integrating informal economic activities such as street vending into an orderly formal economy. The reforms led to the restructuring of the state and its economy, and resulted in the introduction of a neoliberal market economy with its disastrous outcomes, in particular in how – as mentioned above – it affected youth employment. These outcomes have been studied for several African countries (for Cameroon see Konings, 2011; Ferguson, 2006; for a discussion see Ortner, 2016).

Instead of leading to the expected results, quasi automatically, these measures produced different outcomes in different African countries, depending on a range of factors such as demographics, ethnic identities, colonial and postcolonial history and government policies. In most countries, they provoked social and economic crises (Burkina Faso, Cameroon, Kenya, Mali, Nigeria) whereas in others like South Africa and Rwanda (Rollason, this issue) they have resulted, at least officially, in a healthy and stable economy. The outcomes of the reforms were also felt in the Sahrawi refugee camps of Southern Algeria (Tavakoli, this issue), where the resulting reorientation added to the crisis of a foreign-aid dependent government in exile, which has – and continues to – endured forty years in refugee camps. In this context, entrepreneurial projects that depended on foreign aid have received far more international recognition and praise than those of independent Sahrawi entrepreneurs.

Small-scale entrepreneurial activities

Africans are experts in probing a wide variety of entrepreneurial activities. Young people’s need to obtain the means to become respected people has brought forward new types of entrepreneurial activities in the cultural domain with a strong desire to have a beneficial impact on society, as Cultural Entrepreneurship in Africa examines (Röschenthaler & Schulz, 2016). This special issue picks up this thread but examines the activities of (young) entrepreneurial individuals who are sorting out crises and act in often rather precarious conditions.

These small-scale entrepreneurs combine several characteristics of the classic entrepreneur figure, on a reduced scale nonetheless. They strive hard to advance economically, take risks and invest their own savings or loans from relatives and rotating and credit associations, always attempting to expand, reinvest and diversify their activities and finding new ways to enlarge their businesses (H. Nyamnjoh, this issue). Often, young people have to mediate between different social groups, cope with numerous challenges, earn money on the legal margins, straddling the chances of winning and the risks of losing. They find themselves entangled in an urban market situation in which farming for subsistence is no longer a viable option, while the state does not provide them with health insurance, security or pension schemes. For many, self-employment is thus the only promising opportunity.

These small-scale entrepreneurs often make great efforts to economically emancipate themselves. They invest considerable amounts of money, energy and time to succeed in the face of highly uncertain outcomes (Simmert, this issue). They combine many of the characteristics that scholarly literature describes in terms of the figure of the classic entrepreneur, particularly the conviction to succeed in spite of diverse challenges and resistances (Röschenthaler, this issue). This influential entrepreneur had to surmount social resistance but his ventures were backed by the government, whereas African small-scale entrepreneurs do not have much support from government but are rather accused of being informal if not outrightly illegal. In addition to a high degree of risk and competition, they have to double their efforts and be inventive in order to secure even a little income (Röschenthaler, 2016). They are therefore also prone to being left without any insurance in the case of loss (Voigt, this issue). By contrast, more influential entrepreneurs are easily perceived as a threat to political power.

The articles of this special issue each focus on such, often informal entrepreneurial activities in an African country, particularly over the course of the past couple of decades. They examine what state regulations mean to local people (Diawara & Röschenthaler, 2016) and how entrepreneurial individuals experience them more often than not as crises. These studies include the complicated and risky jobs of motorcycle drivers in Rwanda who officially work in a formally regulated setting but who are forced to resort to informal measures to carry out their work efficiently. They are compelled to generate crisis within the system that supposedly regulates their business and which converts governmental control into a simulacrum (Rollason, this issue); the ongoing dependence of the Sahrawi government in exile in Southern Algeria on aid from donor organizations and the difficulties of becoming economically independent (Tavakoli, this issue); traders who migrated from Cameroon to South Africa in the hope of establishing a business there, despite having to start this venture from the scratch with street vending (H. Nyamnjoh, this issue); the precarious situation of business owners who seek ways to protect their property in the face of recurring political upheavals in Western Kenya (Voigt, this issue); the inventiveness of musicians in Nigeria who have, following the crisis of ineffective copyright laws (see also Röschenthaler & Diawara, 2016), found ways to profit from the digital revolution and become music distributors (Simmert, this issue); and Malian tea merchants who import Mali’s national beverage from China and face different interconnected crises from within society, politics as well as the tea market (Röschenthaler, this issue). This collection of articles intends to highlight the efforts of these individuals who at times lose, but also often succeed, and which illustrate that situations experienced as crisis often force these individuals to become more inventive, invest all they have and take opportunities that they otherwise might have considered too complicated or risky.

Acknowledgments

Some of the contributions to this special issue have been presented in a panel that Julia Binter and Ute Röschenthaler organized at the biannual conference of the German Anthropological Association in Marburg in 2015 during which crisis was the focus of debate. More contributors joined the special issue project later. Heartfelt thanks are due to nine reviewers for their excellent comments that helped to make the articles publishable and to Janine Murphy for her invaluable help in copyediting. I am also grateful to the Centre of Interdisciplinary African Studies (ZIAF) at Goethe University Frankfurt for its financial support.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Ute Röschenthaler

Ute Röschenthaler is a professor of Anthropology at the Johannes Gutenberg University Mainz, Germany, and a member of the project ‘Africa’s Asian Options’ (AFRASO) at the Goethe University Frankfurt. She published on cultural mobility, trade networks, intellectual property rights, and entrepreneurship in Africa. Her recent books include Mobility between Africa, Asia, and Latin America: Economic Networks and Cultural Interactions (ed. with Alessandro Jedlowski; Zed Books, 2017); Copyright Africa: How Intellectual Property, Media and Markets Transform Immaterial Cultural Goods (ed. with Mamadou Diawara; Sean Kingston Publishing, 2016); and Cultural Entrepreneurship in Africa (ed. with Dorothea Schulz; Routledge, 2016).