An Integrative Framework for Formal and Informal Entrepreneurship Research in Africa

ABSTRACT

It is a well-established practice of many Sub-Saharan African (SSA) governments to aid entrepreneurs within both the formal and informal sectors to enhance their performance and growth. Unfortunately, there is no agreed method by which governments can differentiate between entrepreneurs and target them with the appropriate promotion policies. Thus, despite the good intentions, entrepreneurship policy initiatives have been incorrectly targeted, poorly implemented, and without the desired results, since different entrepreneurs may require different forms of assistance. Some scholars have suggested that without a context-specific classificatory guide, policymakers are unlikely to be accurate in their assessment of the growth capabilities of prospective candidates for specific promotion initiatives and this can explain some of the policy failures. This observation has motivated the present paper. Our objective is to provide a framework that helps identify the different contextual dimensions influencing formal and informal enterprise creation processes in SSA.

KEYWORDS:

• Entrepreneurship
• Africa
• Integrative Framework
• Formal and Informal Entrepreneurship

Disclosure statement

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

Notes

1 Throughout the study, the term entrepreneurship is used to represent both formal and informal entrepreneurship. The term entrepreneur is also used to represent both formal and informal entrepreneurs.

2 Informal sector is a term generally used to describe micro enterprises such as hairdressing, commercial transportation, auto repairing, furniture production and retailing of food, clothing, medicines. Businesses in this group are usually unregistered and therefore unregulated (see Urban, Robert, & Gordon, 2011).

3 The formation of African enterprise networks 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. A regional enterprise network was not established in Central Africa because of the ongoing conflict in the Democratic Republic of the Congo. In 2000, the pan-African Enterprise Network (AEN) was formed.