Rethinking Institutional Frameworks in Sub-Saharan African Economies: Integrating the Self-Reliance Perspective

It is appreciated that the socio-economic outcomes of an economy can be predicated upon its formal and informal structures because they define interactions and exchanges among the various social agents and economic actors. In developing economies like those in Sub-Sahara Africa (SSA), institutional framework is less adaptable due to the high levels of informality, which has resulted in the failure of formal institutions to provide supportive ambience for businesses to thrive. Thus, self-reliance theory emerges as an alternative approach, emphasising firms’ innovation and survival through their own generated resources. While institutional theory outlines the structures for entrepreneurship and innovation, self-reliance theory highlights the spontaneous responses firms adopt in addressing the challenge. These theories, although complementary, present distinct approaches to understanding the entrepreneurial development and innovation in SSA’s informal economy. As the economies of SSA contend with weak institutional frameworks, self-reliance becomes essential for business survival, particularly for small- and medium-scale enterprises (SMEs).