The History of Business in Africa: Complex Discontinuity to Emerging Markets

223 Pages·2017·2.129 MB·English

by  Grietjie Verhoef (auth.)

Studies in Economic History
Grietjie Verhoef
The History
of Business
in Africa
Complex Discontinuity to Emerging
Markets
Studies in Economic History
Serieseditor
TetsujiOkazaki,TheUniversityofTokyo,Tokyo,Japan
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LorenBrandt,UniversityofToronto,Canada
MyungSooCha,YeungnamUniversity,Korea
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ClaudeDiebolt,UniversityofStrasbourg,France
BarryEichengreen,UniversityofCaliforniaatBerkeley,USA
StanleyEngerman,UniversityofRochester,USA
PriceV.Fishback,UniversityofArizona,USA
AvnerGreif,StanfordUniversity,USA
TirthankerRoy,LondonSchoolofEconomicsandPoliticalScience,UK
OsamuSaito,HitotsubashiUniversity,Japan
JochenStreb,UniversityofMannheim,Germany
NikolausWolf,HumboldtUniversity,Germany
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Grietjie Verhoef
The History of Business
in Africa
Complex Discontinuity to Emerging Markets
GrietjieVerhoef
DepartmentofAccountancy
UniversityofJohannesburg
AucklandPark,SouthAfrica
ISSN2364-1797 ISSN2364-1800 (electronic)
StudiesinEconomicHistory
ISBN978-3-319-62565-2 ISBN978-3-319-62566-9 (eBook)
DOI10.1007/978-3-319-62566-9
LibraryofCongressControlNumber:2017947894
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Preface
IamanAfrican.IamanAfrikanerAfrican.
The unexplored potential of the people of my continent is the single most
distressing fact of our times. Africa has the benefit of centuries-long culturally
enricheddiversity.Thereisstrengthinthisdiversity.Meetingcolleaguesininter-
national business history gatherings has always left me explaining the disunity of
Africa,thediversityandthedevastatingpowerstruggles.Thisbookwasinspiredby
theneedtointroducethestrengthofthatdiversityontheAfricancontinent.Since
Africa is not the home of the world’s largest multinational corporations, business
historians have paid scant attention to the development trajectory of business in
Africa. The impressive growth performance of African economies since the last
decade of the twentieth century and the emergence of African multinational cor-
porations on global bourses hint at the fact that the time has come to consider
Africanbusinessdevelopmentinitsownright.Thelargestemergingmultinational
corporation in the market is Naspers, a South African enterprise. The biggest
transaction in the global beverages industry was completed by Anheuser-Busch
InBevacquiringSouthAfricanBreweriesin2016.Thelargestmobiletelecommu-
nications company in Africa and the Middle East is MTN, greeting the world as
‘Yello’.TherichestblackmanintheworldisAlikoDangotefromNigeria.There
mustbesomethinginAfrica’swater!
Since my first attendance of a business history conference in Palo Alto, San
Francisco, in 1999, aspects of the business history of Africa entered international
businesshistorymeetings.SinglepapersonAfricanandSouthAfricantopicswere
difficult to fit into the internationally oriented sessions in the USA, Europe and
other leading economies. Since 2002, I organised sessions at the International
EconomicHistoryAssociation’sconferences,hopingtoattractwiderinterest.The
first session on Africa history was at the Buenos Aires congress of the IEHA in
2002.Atthe2006IEHAcongressinHelsinki,Finland,twosessionsdevotedtheir
attention to economic and business development in Africa. In the 2009 World
Economic History Congress in Utrecht, the Netherlands, the momentum grew as
scholarsfromAfricaorganisedsessionsontheeconomichistoryofAfricaandearly
v
vi Preface
eighteenth-centuryCapeColonyandonbusinessinAfrica,especiallythefinancial
sector, insurance in comparative perspective. In 2012, the first IEHA World Con-
gress came to South Africa, where the number of sessions on economic develop-
ment and business in Africa testified to the growing interest in Africa. The one
dimensionthatremainedunderdevelopedwasthebusinesshistoryofAfrica.Atthe
World EconomicHistory CongressinKyotoin2015,Africa featuredinatotalof
eight sessions. It was in Kyoto where the idea was mooted to write a full text to
introducethestateofbusinesshistoryinAfricaonAfricanbusiness.
This book developed from many long, penetrating and inspiring discussions
between perhaps one of the business history community’s leading intellectuals,
FrancoAmatoryfromBocconiUniversity,Italy,andmyself.Hebroughtmetothe
point of attempting to put the business history of Africa on the agenda. He
encouragedthedisciplinetoengageinamanuscripttointroduceotherscholarsto
the history of business in Africa. His inspiration has always been directed at
encouraging young scholars and creating opportunities for open debate whereby
the crucial new directions in business history enter inspirational dimensions. This
intends to bring scholars together in pursuing many of the outstanding issues
pertaining to the nature, progress and limitations of Africa’s business. The book
outlines the broad trajectories of development in business in Africa and shows a
persistent entrepreneurial presence. It shows multi-ethnic manifestations of entre-
preneurial talent and the fostering of individual aspirations, ability and success.
Those are the foundations of African business Amatori encouraged me to write
about and to inspire African scholars to pursue. This book is by no means an
exhaustivetextonAfricanbusiness.Itidentifiesthegradualconvergencebetween
businessinAfricaandbusinessinneighbouringandglobalmarkets.Itcallsscholars
to accept the challenge to write the history ofbusiness inAfrica, by Africans and
fromAfricaintoglobalmarkets.Thepresentationofthewiderangeofbiographies,
collected and synthesised here, constitutes the fabric from which future African
business development will take off. An unmined field of entrepreneurial biogra-
phies, organisational studies and configuration of business groups are the themes
invitingfutureresearch.Thereisalifetimeofworkontheimpactoftechnological
progressonbusinessinAfrica,ontheroleoforganisationsincreatingeconomiesof
scaleandontheemergenceofbigbusinessas‘anactofrationality’(Amatori2015)
opentoscholarsofbusinessinAfrica.
ThevisiontoengagesystematicallywithAfrica’seconomicandbusinesshistory
has taken a long winding road through world congresses and business history
meetings. I am indebted to all the participants in the sessions since 1999 and
continued the discourse about Africa. Moreover, I thank the band of economic
andbusinesshistoriansinSouthAfrica,fortheirperseveranceanddedicationtothe
vision of Africa’s past. My work has benefitted immensely from those initiatives,
debatesandmeetingsonhomesoilandinglobalmeetingplaces.IthankFrancoand
MaggiAmatorifortheirgeneroushospitalityduringanumberofvisitstoBocconi,
towardsmyself,aswellastowardsthescholarlycommunityseekingtostretchthe
boundaries ofbusiness history. My work has benefitted tono limited degree from
theinvaluableresearchassistanceofDrSuzannevanEeden-Allen,whohasbeenan
Preface vii
exceptional explorer, synthesiser and editor to my endeavours. The work on the
historyofbusinessinAfricahasonlyjustbegun.
Johannesburg GrietjieVerhoef
May2017
Reference
Amatori F (2015) State and enterprise: the case of SOEs in Europe in the 20th
century.RivistadiPoliticaEconomica3,July/September2015:13–19
Contents
1 TheHistoryofBusinessinAfrica:Introduction. . . . . . . . . . . . . . . . 1
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2 AfricaandAfricas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1 Conclusion. . .. . . . . . . . . . . .. . . . . . . . . . . .. . . . . . . . . . . .. . 22
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3 NetworksofExchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.1 BusinessUnitofOperation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.2 MerchantsandTradeintheEast. . . . . . . . . . . . . . . . . . . . . . . . . 45
3.3 IndianBusinessinAfrica:MiaandDockratFamilyBusiness. . . . 48
3.4 Conclusion. . .. . . . . . . . . . . .. . . . . . . . . . . .. . . . . . . . . . . .. . 51
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4 BusinessinNewMarketsUnderNewMasters. . . . . . . . . . . . . . . . . 55
4.1 EscalatingCostofCompetitionMandatedDiplomacy. . . . . . . . . 57
4.2 Strategy:CharteredCompanies. . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.3 AfricanEntrepreneursinSouthAfrica:Exceptionalism
andSimilarity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
4.4 ConcludingOverview:TheRoleofCreditandBanking. . . . . . . . 76
4.5 Conclusion. . .. . . . . . . . . . . .. . . . . . . . . . . .. . . . . . . . . . . .. . 81
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
5 BusinessinIndependentAfrica. . . . .. . . . .. . . . . .. . . . . .. . . . . .. 87
5.1 Ideology,PolicyandBusiness. . . . . . . . . . . . . . . . . . . . . . . . . . . 89
5.2 Power,BusinessandthePeople:Ghana. . . . . . . . . . . . . . . . . . . . 92
5.3 Power,BusinessandthePeople:Nigeria. . . . . . . . . . . . . . . . . . . 94
5.4 PowerandBusiness:FrenchWestAfrica. . . . . . . . . . . . . . . . . . . 99
5.5 StatismandBusiness:EastAfrica. . . . . . . . . . . . . . . . . . . . . . . . 101
5.6 TheState,PowerandBusiness:CentralAfrica. . . . . . . . . . . . . . . 108
5.7 OutlierSouthAfrica. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
5.8 Conclusion:AfricanBusinessattheEndofthe1980s. . . . . . . . . 115
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
ix
x Contents
6 EntertheMarket:AfricanEntrepreneurialRebirthAfter1980. . . . 119
6.1 ContextualOverhaul. . . . . . .. . . . . . . . . . . .. . . . . . . . . . . . .. . 119
6.2 Privatisation:EntersAfricanEntrepreneurs. . . . . . . . . . . . . . . . . 122
6.3 NewGenerationEntrepreneurialInnovation. . . . . . .. . . . . . . . .. 126
6.4 TransformingHumbleTradingintoaCorporateEmpire. . . . . . . . 133
6.5 TransformingSocialismintoaMarket. . . . . . . . . . . . . . . . . . . . . 137
6.6 MuslimMaghreb. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
6.7 Banking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
6.8 BlackBusinessandOpenMarketsinSouthAfrica. . . . . . . . . . . . 154
6.9 Conclusion:TheJourneyHasJustBegun. .. . . .. . . .. . . .. . . .. 160
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
7 IntotheGlobal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
7.1 BigandPowerful. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
7.2 TheNewGlobalAfricanBusiness:Entrepreneurs
andBillionaires. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189
7.3 Conclusion. . .. . . . . . . . . . . .. . . . . . . . . . . .. . . . . . . . . . . .. . 201
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203
8 Conclusion:TheBeginningofAfricanBusinessHistory. . . . . . . . . . 207
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215