During the colonial times, Africa was integrated into the world economy mainly as a supplier of cheap labor and raw materials. This caused a set back in the development of an entrepreneurial class. The consequence of this incorporation was the drainage of resources rather than using them for the continent’s development. Africa’s history of colonization may have had more far-reaching economic implications than we thought. In contrast, for European countries, this meant an infusion of wealth, manifesting in the form of investments. These investments further increased wealth through exports. These systems imposed by aristocratic powers discouraged the transformation of small entrepreneurial firms into large corporations in Africa.
The existing systems supported by foreign governments influenced many African leaders to forgo capitalism in favor of a more egalitarian system. To see this through, state protectionist policies were devised to promote accumulation of capital to finance local African entrepreneurship. However, in the post-colonial period, the rate of capital accumulation has not been sufficient to rebuild societies in the wake of imperialistic rule.
The paper Echoes and Reverberations of Entrepreneurship in West Africa: Any Missing Links provides insight on the need for an established governmental framework for, first, the economic success and next, the entrepreneurial activity of a country. Africa’s case demonstrates the detrimental effects of colonialism. The net effect of these circumstances is the installation of a dangerous cycle, in which economic decline and poor governance reinforce each other. Hence, Africa has become a diminishing component of the world’s economy and, thereby, marginalized.
In order to stimulate the entrepreneurial activity of the African subcontinent, the governments of the countries could set the pace and ensure that they provide economic policies that allow business growth, eliminate bureaucracy and create a free environment that allows businesses to flourish.
To learn more, please access the paper here.
Contributed by Suvena Yerneni.
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