Much of the growth in Sub-Saharan Africa in the past decade has come from extractive industries,
rather than from private, entrepreneurial activity. Furthermore, non-extractive activity in the private
sector is often dominated by firms owned by ethnic minorities. This paper analyzes the
characteristics of the formal private sector in five countries in sub-Saharan Africa, with a particular
emphasis on Black African-owned (indigenous) firms. We find that indigenous firms start smaller
and grow more slowly; however their rate of growth is positively influenced by whether the ownerentrepreneur
has a university degree. We do not find overwhelming evidence that credit is the
binding constraint but we do find that indigenous firms get less access to trade credit than firms
owned by minority entrepreneurs. Finally, we discuss policy solutions that might enable a larger
number of indigenous entrepreneurs to enter and survive in a vibrant, multi-ethnic private sector.