African entrepreneurs are jack of all trades reveals new study; but can they be masters of all?

How many times have you met an entrepreneur from Nigeria, Ghana, Kenya or any other African country and had him tell you, “oh by the way, I also run a printing business” just after telling you about his electronics business? A new study by IMANI Research has put into print this social phenomenon of African entrepreneurs being jack of all trades, a phenomenon it calls “parallel entrepreneurship.”

According to IMANI, “the successful entrepreneurs it surveyed in Ghana, Nigeria and Kenya own, on average, six businesses each. One boasted more than 60!”

What causes this phenomenon?

One reason for it is simply the wealth of opportunity, says Cyril Allen II, a  businessman in Liberia’s capital, Monrovia. Cyril and his family farm cocoa and coffee, run a cleaning business, lease out property and manage logistics for international companies. According to him, once a firm has established a degree of trust among its customers, that can in turn spawn new businesses, particularly when many other firms are unreliable. “We work based on relationships, so if I have a good relationship with a client, they might ask for another service,” he said.

Another reason might be African entrepreneurs literally allowing necessity to be the mother of inventions. For example Prince Kofi Amoabeng founded UT Holdings in 1997 which granted loans in Ghana. However,  he soon found out that he needed to provide additional services to make the loans business work adding first a debt-collection company and then security firms. “We found existing companies wanting,” he said. He has since expanded his list of businesses to include a life-insurance arm.

Another reason seems to be the peculiar characteristics of many African economies. In most, resources are hard and access to funding is limited. As a result, it might make sense to start several companies, applying one’s managerial talent to each, managing scarce resources and iterating until some of them become successful.

Despite the adaptability of African entrepreneurs in juggling different ventures often in disparate fields, the worry is that though they are jack of all trades they quickly become master of none.

What are your thoughts on this? Is it more advisable to focus on one venture rather than simultaneously run several? Share your thoughts!

Post Author: CPAfrica.com

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