The internationalization of African firms: Opportunities, challenges, and risks

• Author: Kevin Ibeh,Amon Chizema,Ifedapo Adeleye,Nathaniel Boso
• Date: 01 January 2019
• Published date: 01 January 2019
• DOI: http://doi.org/10.1002/tie.21977

INTRODUCTION

The internationalization of African firms: Opportunities,

challenges, and risks

Nathaniel Boso

1

| Ifedapo Adeleye

2

| Kevin Ibeh

3

| Amon Chizema

4

1

KNUST School of Business, College of

Humanities and Social Sciences, Kwame

Nkrumah University of Science and

Technology, Kumasi, Ghana

2

Haslam College of Business, University of

Tennessee, Knoxville, Tennessee

3

School of Business, Economics and

Informatics, Birkbeck, University of London,

London, UK

4

Birmingham Business School, University of

Birmingham, Birmingham, UK

Correspondence

Ifedapo Adeleye, Haslam College of Business,

University of Tennessee, 1000 Volunteer

Blvd, Knoxville, TN 37996.

Email: iadeleye@utk.edu

There has been a marked increase in the internationalization activities of African firms over the

last two decades or so, resulting in the emergence of regional challenger firms that are aggres-

sively competing with foreign multinationals in terrains historically dominated by the latter.

However, our understanding of this phenomenon is limited, as empirical research examining

the nature of internationalization of African firms is scarce, and research directly investigating

drivers, outcomes, and boundary conditions of the internationalization of African firms is lack-

ing. The goal of this special issue, therefore, is to contribute to the scholarly understanding of

the increasingly prevalent internationalization of African firms. This guest editorial provides a

summary of the six articles in this special issue, and highlights three broad thematic issues:

internationalization opportunities for African firms (accelerated private-sector development and

regional integration, and ability to overcome institutional voids); internationalization challenges

(global competitiveness challenges, limited management and cross-cultural capabilities, and

overcoming the liability of Africanness); and internationalization risks (losing focus on home

markets and over-internationalization).

KEYWORDS

Africa, Africa-to-Africa internationalization, emerging markets, exports, internationalization

strategy

1|INTRODUCTION

The internationalization activities of African firms have increased

remarkably in scale, scope, and sophistication over the past two

decades or so (Boso, Adeleye, & White, 2016; Ibeh, Wilson, & Chi-

zema, 2012). This rise in the number of nascent African multinationals

appears to have coincided with the “Africa Rising”era of the last

decade, when the region experienced phenomenal economic growth

(Ibeh, 2015). As a result of this growth, African firms are now emerg-

ing as serious challengers in their domestic and regional markets, on a

continent where formal economic activities have been historically

dominated by Western multinationals since the colonial era (Adeleye

et al., 2018). The sheer speed, scale, and scope of this international

expansion of African firms have been particularly interesting. For

example, within the last two decades, several South African compa-

nies have accelerated their international growth, with Telkom now

operating in 38, MTN in 24, Standard Bank in 20, and Shoprite in

17 countries. Other African players with broadly similar growth

patterns include Togo-based Ecobank (40 countries); Nigeria's UBA

(20) and Dangote (15); and Mali's Bank of Africa (18) (Boso et al.,

2016; Ibeh, 2015).

These internationalization activities cover virtually all key sectors

in the region, from financial services, energy and extractives to tech-

nology, aviation, communications, retail, pharmaceuticals, agriculture,

and manufacturing, with the firms leading this expansion operating in

virtually all the subregions of the continent. Although multinationals

from the two regional economic powerhouses—South Africa

(e.g., MTN, Shoprite, DSTV, Standard Bank, FNB, Aspen Pharmacare,

Bidvest, Sasol, Discovery, Anglo-American, Telkom, Dimensions Data,

Massmart, and Barloworld) and Nigeria (e.g., Dangote, UBA, GTBank,

FirstBank, Access Bank, Interswitch, Glo, and Oando)—lead the way,

players are also emerging from the rest of the continent. From Kenya,

the East African powerhouse, Equity Bank, KCB, and Kenolkobil are

rising; so are OCP, BMCE, and Attijariwafa Bank from Morocco, and

Groupe Sifca and Atlantic Group from Côte d'Ivoire. While many of

these firms have only internationalized within their subregion, several

DOI: 10.1002/tie.21977

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