Will Africapitalism work?
Africapitalism emphasises the role of entrepreneurs as agents of change in economic development. Professor Emmanuel Adegbite takes a deep dive and examines the effectiveness of this philosophy.
There are different kinds of challenges in every business environment. Africa faces various systemic and institutional challenges, including poverty, weak governance and poor infrastructure. Such factors make entrepreneurship in Africa difficult.
In response, Nigerian entrepreneur Tony Elumelu developed the idea of “Africapitalism” – a philosophy that aims to support people in a more sustainable way, by investing in jobs and economic opportunities to lift them out of poverty. It thus describes the process by which African businesses meet social and economic needs, by creating goods and services with an innate understanding of the local environment. By reflecting the economic and social practices inherent in African tradition and culture, Africapitalism is seen as an attempt to restore ‘African-ness’ in capitalism.
However, Africapitalism does present a challenge for corporations that adopt this economic philosophy. “Does Africapitalism actually address the exigencies in Africa? Is such a variant of capitalism practicable within a moral framework?” ponders Professor Emmanuel Adegbite, Visiting Professor in Governance and Management at James Cook University in Singapore.
Professor Adegbite – in collaboration with Associate Professor Jacob Wood, Associate Dean of Research (Business, IT and Science) at James Cook University in Singapore, and Olabisi Daodu, Lecturer in Accounting at De Montfort University – conducted research to examine Africapitalism with a more critical perspective and argues for a more realistic approach to African development.
Notably, there is no clear framework to identify the central values of Africapitalism. For example, despite being established on the principles of moral economy, Africapitalism does not address the grey areas in ethical dilemmas.
Professor Adegbite explained, “The lack of precision in its understanding and its reliance on private interpretation retains significant implications for its transferability within African markets. More so, it tends to describe Africa as a homogenous entity, ignoring the diversity in its institutional foundations, configuration and maturity. The centrality of private morality assumptions in its marketability impairs its consistency and legitimacy across the board, as it can potentially lead to two Africapitalists acting differently in the same scenario.”
Therefore, the research recommends the need to promote the development of a system of corporate governance, that is adapted, rather than adopted, to the peculiarities of the African context. What’s more, there is need for a clear and direct framework, alongside the establishment of unique features that will be the focus for the ideas of Africapitalism.
Professor Emmanuel Adegbite will be sharing about Corporate Governance and Africapitalism, and more, in his Professorial Lecture taking place on 30 July 2020. Find out more and register here.
Adegbite, E., Daodu, O. and Wood, J. (2020) Will Africapitalism work? Africa Journal of Management, forthcoming. https://www.researchgate.net/publication/341105458_Will_Africapitalism_work
Check out Professor Emmanuel Adegbite’s staff and research profiles here.
Find further information on our areas of research and research strength at James Cook University in Singapore here.