Africa’s economic narrative is often framed around its entrepreneurial spirit and vast potential. Yet, as The Economist’s recent special report aptly highlights, this narrative has an uncomfortable truth: the continent has too many businesses and too little business.

This paradox lies at the heart of Africa’s developmental challenges. The proliferation of small, subsistence-level enterprises, often celebrated as the backbone of African economies, may be doing more harm than good. If Africa is to unlock its economic potential, it must shift from a "hustle economy” to one built on sustainable, scalable businesses capable of generating stable, well-paying jobs.

The so-called hustle economy dominates Africa, characterised by microenterprises that provide just enough income for survival. While this ecosystem has provided a lifeline for many, it has not translated into the transformative growth needed to lift millions out of poverty.

According to The Economist, over 90 per cent of African businesses employ fewer than five people, and many operate informally, without access to credit, markets, or regulatory support. These businesses are reactive, driven by necessity rather than opportunity, and often lack the scale or sophistication to contribute meaningfully to economic development.

Contrast this with Germany, whose Mittelstand – a network of small to medium-sized enterprises (SMEs) – offers a blueprint for what Africa can aspire to. As explored in the excellent book "The Seven Secrets of Germany,” these SMEs are not small in ambition. They are highly specialised, globally competitive, and deeply integrated into the formal economy.

Germany’s Mittelstand firms are engines of innovation, job creation, and export growth, accounting for a significant share of the country’s gross domestic product (GDP). Crucially, they are supported by robust governance, vocational training systems, and access to capital – elements largely missing in Africa’s business ecosystem.

The comparison is not to suggest that Africa should replicate Germany’s model wholesale. Context matters. Africa’s diverse cultural, economic, and political landscapes require tailored solutions.

However, the principle of fostering fewer but more robust businesses – ones that are productive, scalable, and integrated into value chains – holds universal relevance. This shift from quantity to quality in business is what Africa urgently needs.

This is not to diminish the value of small-scale entrepreneurship. The hustle economy has its place as a safety net in economies where formal job opportunities are scarce.

However, it cannot be the foundation of a prosperous continent. Africa needs a paradigm shift: from celebrating the sheer number of businesses to building businesses that matter. Businesses that employ hundreds, not just one or two. Businesses that create products and services for local and global markets. Businesses that innovate, compete, and grow.

This transformation requires bold action and rethinking entrenched narratives about entrepreneurship in Africa. It also requires the global community to move beyond tokenistic support, offering instead meaningful investment, technology transfers, and capacity building. Africa does not need charity; it needs partners who recognise its potential and are willing to invest in its future.

As an economist, I see this as Africa’s defining challenge – and its greatest opportunity. By moving beyond the hustle economy, Africa can build a future where its youth have access to stable, dignified jobs, where its businesses compete on the global stage, and where its economies grow sustainably and inclusively. This is not just an African agenda; it is a global imperative. A prosperous Africa benefits everyone. Let this be the year we begin to make it a reality.

The author is an applied economist with a special interest in Africa.