A Unique Diversity: Understanding the sustainability and global integration of African businesses

Supply Chain

publication date 10/05/2022

Diamond rings, chocolate delights, coffee, cars and portable electronics are all integrally grounded in the African continent, however Africa’s vital contributions have not been fully integrated into scholarly understanding of supply or value chains. Banner: Shutterstock/Manop Boonpeng

This article was also written by :  Anita McGahan, Baniyelme Zoogah & Brian Silverman

We recently edited a special issue of the Africa Journal of Management entitled Sustainability and Global Value Chains in Africa, in which we sought to explore and develop insights from management scholarship on African businesses. We perceived a continuing scarcity of solid academic research on business in Africa in regards to how African companies view their relationships with non-African business partners. Scholars must address this, since only by thoroughly understanding economic activities in Africa can the UN Sustainable Development Goals be achieved.

We strongly urge funding agencies to enable academic researchers in Africa to explore phenomena within Africa, thus expanding beyond Global North perspectives. We further call for research approaches that both suit the context in which research in Africa is embedded and are considered relevant and rigorous by prevailing academic standards.

We see Africa as central to global prosperity for a range of reasons, including its demography, political idealism, social fabric and economic potential. Realising that potential will rest on deepened understanding of life and of business on the continent. 

We were particularly motivated by the innovative practices, managerial creativity and importance of African business on the international stage. For example, how did Nigeria’s Dangote Group rise from a challenging environment to become a very big multinational that is recognised globally? We also sought to encourage and develop interest in issues specifically related to the African context.

"We see Africa as central to global prosperity for a range of reasons, including its demography, political idealism, social fabric and economic potential. Realising that potential will rest on deepened understanding of life and of business on the continent."

While environmental, social and economic performance of most African nations and companies are below the levels of other world regions, the continent has the youngest average age among all on the planet, and is a focus of global investment and development.

Management scholarship on Africa has not yet matured for a range of reasons, many of which reflect the challenges facing African businesses today. These include the paucity of data and institutional support for scholarship on African businesses.

Perhaps more importantly, we lack a systematic and comprehensive framework of theoretical constructs, relationships, contingencies and interdependencies that describe uniquely African ways of conducting business in context of Africa’s distinctive characteristics.

More research is needed on the foundations of exchange across different cultural contexts within Africa, and between Africa and other areas of the world. The challenge is further complicated by the diversity of cultural, social, economic, political and demographic facets of life on the continent.

It would be impossible to list these comprehensively in a single place; we offer just a few salient facts that demonstrate the dual uniqueness and diversity of the African business context:

  • The median age of Africans is 18, and the average number of live births per woman is estimated as 4.4. Consequently, Africa will be the most populous continent by 2050, when two out of every five children will be African.
  • Across Africa, life-sustaining enterprise often occurs outside of formal trading systems that are familiar to persons living on other continents. Long histories of community practices shape the ways in which Africans sustain themselves.
  • The colonisation and exploitation of Africans and African resources still shapes the context for intercontinental trade and globalisation.
  • Diversity across Africa (indigenous cultures, climate etc.) is so great that a single unified characterisation of the African environment becomes virtually impossible to justify.
  • Opportunity in Africa is unparalleled in the world. No other continent offers commensurate opportunities for breakthroughs in addressing clean energy (e.g. M-KOPA Solar in Kenya brings affordable solar energy to off-grid communities via mobile phone technology); environmental preservation (through eco-tourism in the borderlands of the Democratic Republic of the Congo and Uganda, Lake Victoria and the Serengeti); preventative healthcare (e.g. use of drones in Malawi for preventive health); equitable distributional arrangements (between Starbucks and local producers of Rwandan Coffee); preservation of natural resources (e.g. Burkina Faso’s restoration of agricultural land through water and soil conservation/soil defence, which increased from 790,638 hectares in 2013 to 892,846 hectares in 2020); and digital education in Benin, Gabon, Ghana, Nigeria, Mozambique, Rwanda, South Africa and Tanzania—to name only a few. Businesses of all types must align with local institutions while maintaining global profiles in pursuing these opportunities.

"Increasingly outdated and unsustainable industrial trade practices, which threaten to deepen complex problems and intensify inequities, weigh heavy on Africa’s opportunities."

The seed for this research was global value chains, and through our different collaborations we learned a great deal about tensions, paradoxes and opportunities that are distinctly African.

This topic immediately raised questions about the balance of trade: what is being exported and imported into and across African countries? Diamond rings, chocolate delights, coffee, cars and portable electronics are all integrally grounded in the African continent, however Africa’s vital contributions have not been fully integrated into scholarly understanding of supply or value chains.

The ways in which companies in the Global North tap African resources has a direct impact on the full range of demographic, political, cultural, social and economic challenges faced on the continent.

One cannot easily consider minerals without considering child labour or worker health and safety issues in the mines. International competition for leadership in agricultural exportation has greatly intensified unsustainable practices in many regions of Africa.

The demands of a relatively inexperienced but highly energetic and youthful workforce have driven many African employers toward practices that exploit the preponderance of low-cost, unskilled labour. As the list goes on, increasingly outdated and unsustainable industrial trade practices, which threaten to deepen complex problems and intensify inequities, weigh heavy on Africa’s opportunities.

African ways of doing business are unique. How can firms change their business practices to improve sustainability locally? How can non-African firms better consider the traditional structures they encounter?

Answering these questions effectively will require investments in new theorising and empirical analysis that consider the full contextual complexity of Africa. The production of knowledge on these critical issues is essential for Africa and for the world—both to make progress in addressing centuries-old inequities and to open opportunities for the flourishing of Africans and Africa.

“This article was originally published by OECD Forum Network: https://www.oecd-forum.org/posts/a-unique-diversity-understanding-the-sustainability-and-global-integration-of-african-businesses

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