“Africa has too many small businesses, and too little business.”
When The Economist dropped this line a few months ago, it wasn’t just a throwaway quote, it lit a fuse.
Across boardrooms, co-working spaces, social media and think tanks, the sentiment rang uncomfortably true. The continent is buzzing with entrepreneurial energy. Side hustles, mobile ventures, micro-startups. But despite the noise, something’s missing: scale, substance and sustainability.
So what’s holding Africa back from building billion-dollar businesses instead of breeding billions of business cards?
The Illusion of Hustle: Why Africa’s Business Boom Isn’t Scaling
Sheena Raikundalia, Chief Growth Officer at Kenya’s Kuza One, cuts right to the point:
“Africa is the only continent with no company on the Forbes Global 2000. We have just 60% of the large firms you’d expect, given the size of our economies. Why? Are we less talented? Less ambitious?”
Her answer? A clear no — but structural blockages run deep.
Want to start a business? You’ll need collateral, and be prepared to face 20%+ interest rates.
Manage to grow? Hope your clients pay you before the quarter ends. Even those who navigate this initial hurdle face the precarious reality of protracted payment cycles, often stretching beyond 90 days. This liquidity crunch can cripple even the most promising ventures.
Meanwhile, Kenyan banks like KCB Bank Group are thriving, reporting around KSh 61.8B ($460 million) in profit. FirstRand Ltd, a major South African lender, also reported a 10% rise in first-half earnings, reaching 20.9 billion rand ($1.14 billion) by December 31, 2024. The contradiction is glaring: there’s no shortage of capital, just a mismatch in capital allocation.
“We have money — just not for businesses that create jobs and value,” Sheena Raikundalia asserts. This potent assertion exposes a financial system that appears to prioritize established interests and consumption over the long-term growth and industrialization that the continent so desperately needs.
Fragmented Markets, Expensive Movement and Dollar Drain
Try moving goods from Nairobi to Kampala and you’ll often find it’s faster and cheaper to import from Dubai or Guangzhou.
“Flights within Africa cost $400–$1000. Cheaper to fly to Dubai or Europe. It’s easier to ship goods from China to Kenya or Uganda than between our own countries. 54 countries = 54 licenses. One continent, but no real single market. Even our trade payments go through the US dollar, costing us $5B every year,” says Sheena.
The ease with which goods can be shipped from China to Africa, compared to the logistical nightmares and bureaucratic hurdles of inter-African trade, further underscores this market dysfunction. The existence of 54 countries, each with its own set of regulations and licensing requirements, effectively suffocates the potential for a truly continental market. Even basic financial transactions are hampered by the reliance on the US dollar, costing the continent billions annually in intermediary fees.
What’s the cost of this dysfunction? Lost time, higher friction and an entrepreneurship ecosystem designed to reward survival not scale.
Liz Neke, founder of Navy and Gold Growth Partners, calls it out:
“Every entrepreneur is forced to be a lone warrior, re-solving the same problems across 54 borders. That’s not innovation — that’s inefficiency disguised as hustle.” She delves into the psychological and structural toll of the current environment. “ In romanticizing the solo founder, we underestimate the psychological tax of fragmentation,” she argues.
The Missing Giants: From Local Hustlers to Regional Builders
Ngan Niba, CEO of Agrotek in Cameroon, takes it further:
“Small businesses are important — but they can’t transform a continent. Africa needs fewer hustlers and more builders. Fewer ‘local champions’ and more regional giants.”
He’s right. The average African business is small, undercapitalized, and confined to one or two markets. In contrast, companies like India’s Reliance Industries or Brazil’s JBS have scaled across sectors and continents. Why not Africa?
The truth? We’ve built ecosystems that reward short-termism and personal brand-building instead of long-term economic value. It’s easier to launch a boutique consulting firm than to break ground on a regional logistics platform. Capital, regulation and policy reinforce this bias.
“Not just donors—but doers,” encapsulates the need to move beyond a proliferation of micro-enterprises towards the creation of larger, more impactful businesses with the capacity for significant job creation and economic transformation. The emphasis on “doers” over “donors” speaks to a growing desire for self-reliance and a move away from dependence on external aid.
Are We Misallocating Capital?
Liz Neke doesn’t mince words:
“Another thing, we often say ‘there’s no capital,’ but the real issue may be misallocated capital. Banks fund consumption, not production. Governments reward proximity, not performance. So, it’s not that we lack ambition or ideas, we’ve just never designed ecosystems that reward long-term builders.”
This hits home. African financial systems are heavily geared toward government securities and consumer credit, not enterprise lending. In most African countries commercial banks prefer lending to the state, safe, guaranteed over risky but impactful business ventures.
This powerful critique suggests that the fundamental design of African economies may be inadvertently hindering the growth of long-term, value-creating enterprises. As Kevin Okwako Ochima of Jacob’s Ladder Africa puts it, “Governments crowding out local businesses through government securities needs to be controlled. It’s particularly concerning when the same loans don’t translate to development.”
His concern points to a potential misallocation of capital, where state borrowing may stifle private sector access to funding without necessarily translating into meaningful development. Kevin’s assertion that “we are not truly one” in terms of market integration highlights the lack of prioritization given to the fundamental elements of trade: “Ease of movement and payments across borders doesn’t seem like a priority—yet this is the definition of trade in its essence.” His concluding call for “more actions (not words) from our governments” resonates with a growing impatience for concrete steps to address systemic challenges.
Tools That Exist — But Aren’t Activated
Africa doesn’t lack frameworks. It lacks activation.
We already have:
- AfCFTA – a continental free trade agreement covering 54 countries.
- SAATM – a single African air transport market.
- PAPSS – a Pan-African payment and settlement system.
But their impact remains limited by weak implementation and political inertia.
Morrocco’s Oussama Laroussi, founder of Davlar Capital, is blunt:
“Activating AfCFTA, SAATM, and PAPSS isn’t just a policy choice — it’s an economic survival strategy. Until we reduce the friction of doing business within Africa, we’ll keep exporting opportunity and importing dependency,” he reflects.
The Politics of Business: A Structural Reckoning
Mariadas Rajendran Head of Strategic Engineering at Dangote Industries Limited in Nigeria points to deeper currents:
“How does the reliance on expatriate expertise in key sectors affect the growth of local enterprises and the development of indigenous talent? In what ways do religious affiliations and political structures across African nations impact business operations and investor confidence?. How do tribal and ethnic identities influence market access, business partnerships, and regional economic integration? What role does foreign investor lobbying play in shaping economic policies, and how might this affect the prioritization of local versus international business interests?” he asks.
These aren’t abstract questions, they underscore the urgent need to translate continental frameworks into tangible realities . They cut into the very core of Africa’s business architecture. If regulations are being written for multinationals and elections are won with patronage, where does that leave the real builders?
Time for a New Ethos: Less Romance, More Results
Africa’s entrepreneurship culture is rich with optimism. But maybe it’s time to trade some of that optimism for accountability and hard metrics.
“We need fewer ‘business cards’ and more balance sheets,” says Oussama Laroussi.
“Let’s stop romanticizing entrepreneurship and start financing enterprise.”
That means supporting companies with scale potential, not just pitch decks. It means investing in logistics, manufacturing, agri-tech, and infrastructure not just the next delivery app. It means rewarding execution, not just exposure.
And most importantly, it means shifting from solo heroism to ecosystem thinking.
What Now? A Call to Realign and Rise
The Economist was right but only for now.
Africa’s future doesn’t lie in more “founder stories.” It lies in systems that work, markets that connect, capital that flows where it matters and governments that stop crowding out value creators.
Kevin Ochima is clear: “We need more action (not words) from our governments. Unless we address systemic challenges, we’ll be pushing rocks uphill.”
Sheena Raikundalia, ever hopeful yet hard-nosed, closes with this:
“Individually, we are weak. But collectively, Africa is strong. Can we drop the ego, build trust, and prove The Economist wrong again?”
This isn’t about rejecting hustle — it’s about graduating from it. Africa has ambition. It has capital. It has markets. It even has blueprints. Now it’s time to do the hardest thing: build real businesses that last. And if we fail? We’ll remain a continent of potential not power. But if we succeed? The next time The Economist writes about Africa, it might be forced to say: “This continent doesn’t just hustle. It scales.”
