Who Are Africa’S Entrepreneurs? Comparative Evidence From Ghana And Uganda

Contemporary national development policy in many parts of the world is focused on the promotion of entrepreneurship. This is because policy makers see entrepreneurship as an important driver of economic development. Drawing on in-depth research in Ghana and Uganda, this paper provides a comparative analysis of the characteristics of entrepreneurs and their enterprises, their motives for choosing self-employment and the constraints to their businesses in Ghana and Uganda. Using a sample of over 1,000 micro and small entrepreneurs in each country, we found that Ghanaian entrepreneurs are much more motivated by necessity-driven motives while Ugandans are motivated by a combination of opportunity- and necessity-driven motives. Specifically, the factor analysis indicated that whereas Ghanaian entrepreneurs are significantly motived by “Work-family consideration” and “Low opportunity,” entrepreneurs in Uganda rated “Career consideration” and “Survival consideration” as their main motives for engaging in self-employment activities. On success, a much higher fraction of Ugandan entrepreneurs are found to be more successful than their Ghanaian counterparts. Comparatively, we found that Ghanaian businesses are significantly challenged with access to finance or credit; however, their counterparts in Uganda significantly face problems related to institutional weaknesses. Thus, from the factor analysis, “Financial problem” and “Institutional problem” were found to be significantly higher for Ghana and Uganda respectively. Hence, among others, Ghanaian policy makers can stimulate entrepreneurship by taking steps to reduce the level of financial constraints facing its entrepreneurs while in Uganda, much effort should be geared toward improving the business institutional environment.