Family-owned businesses in Africa: successorship issues and suggestions

Abstract: Worldwide, most Small and Micro-Enterprises (SMEs) are family-owned. Analytically, therefore, Family-Owned Businesses (FOBs) are a type of SME, as this paper will demonstrate. Africa and most developing economies are known for FOBs, most of which are less formal or institutionalised than their counterparts in the developed economies. As a result, FOBs in Africa are short-lived and have life spans that rarely transcend those of their original founders. This chapter surveyed four FOBs in Nigeria and found that several reasons account for their non-succession or unsustainability beyond their original founders. The chapter argues that, for Africa to bolster its productive economic capacity, in order to effectively address its domestic challenges and become a more relevant player in the global economy, FOBs must become more institutionalised and, hence, more sustainable beyond the life span of their original founders. The chapter proposes a sustainability model for FOBs in Africa and discusses its implementation and policy implications. The chapter concludes that sustainable FOBs play very vital roles in enhancing the productive capacities of individuals and societies, and are a critical part of the foundation for a viable economy in Africa.