10 Best Countries to Do Business in Africa

 

10 best Countries to Do Business in Africa


Gone are the days when executives and investors could travel anywhere on the African continent to look for growth. Understanding the unique circumstances of each market is now critical to success. 

Based on the World Bank Ease of Doing Business report, key political developments and macroeconomic factors in each country, we have identified ten countries that managers and investors should consider in their Africa strategies.

 

• Rwanda

10 best Countries to Do Business in Africa


Rwanda is one of Africa's fastest growing economies, with average growth of over 6% per year since the turn of the century. Last year, the country saw the most entrepreneurship reforms in the region. The World Bank says "the business has undergone the biggest reform since its launch 16 years ago".

The ease of doing business in Rwanda is a key area for improvement identified in the World Bank's Doing Business 2019. Bureaucratic structures have been replaced by electronic systems. Last year, it replaced the stifling VAT invoicing system with free software, allowing taxpayers to issue VAT invoices from any printer. 

In addition, New Zealand is the second country in the world where registering property is easy.

 

• Kenya

10 best Countries to Do Business in Africa


According to the World Bank, our country has one of the best indicators in the world for obtaining credit and starting a business. In just two years, our country climbed 31 places in the general rating of Doing Business. 

An important reform initiated by the government was the introduction of new laws to facilitate access to credit for businesses.

The Kenyan government has also partnered with IBM to develop technology solutions for institutions, leading to the introduction of an online system for paying taxes and obtaining digital certificates, simplifying asset registration.

Kenya's economy is expected to continue growing at 6.1% as estimated by the International Monetary Fund (IMF) and 5.9% as estimated by the World Bank. It is clear that the country will remain East Africa's leading regional hub for information and communication technology, finance and transport services.

 

• Ghana

10 best Countries to Do Business in Africa


Since the smooth transition to the Nana Akufo-Addo government in 2016, the government has pushed for private sector growth to revitalize the non-oil and non-agricultural sectors. Commodities including oil, gold and cocoa have been central to Ghana's $47 billion economy. The country's rapid economic growth in recent years has been closely linked to oil since it became an oil producer in 2010.

Ghana has been under IMF supervision since a $918 million loan deal was agreed in 2015. The current program runs until the end of 2018. The government tells the IIMF it is working hard to build a stable and strong economy to avoid a bailout.

According to the World Bank's Doing Business report, Ghana has further simplified import procedures. Our country now has a paperless customs clearance system. The country climbed six places in the overall index.

 

• Ivory Coast

10 best Countries to Do Business in Africa


The world's largest exporter of cocoa beans has benefited from a stable political environment and made significant progress in its business environment in recent years. The country ranks among the top 10 in the world for "ease of doing business."

In the last two years, the building permit period has been shortened and an electronic tax payment system and a credit rating agency have been introduced. According to the World Bank, an online reporting system for corporate tax and value added tax was introduced last year.

The agriculture-based economy is expected to maintain a steady growth rate of over 7% next year. With its relatively developed road network and the second largest port in West Africa, it is well placed to attract investment.

 

• Ethiopia

10 best Countries to Do Business in Africa


The landlocked country of more than 100 million inhabitants in the Horn of Africa is turning into Africa's manufacturing hub. The Ethiopian government is attracting investment with tax breaks, infrastructure investment and cheap labor. 

The construction of industrial complexes is also part of the national plan. There are already six industrial parks and nine more are expected to be added across the country in the next few years.

Ethiopia has also seen historic political changes after new Prime Minister Abiy Ahmed took office last April. He sought to open the economy to private investment. It has announced plans to sell minority stakes in state-owned monopolies such as Ethiopian Telecom, Ethiopian Airlines Corporation, the continent's largest airline, and Ethiopian Shipping Logistics Service Corporation to domestic and foreign investors. 

The IMF predicts that Ethiopia will become Africa's fastest-growing economy in 2019, with a growth rate of 8.5%.

The Ethiopian Investment Commission (EIC) launched iGuide, an online investment guide, in December 2018. Supported by the United Nations Economic Commission for Africa (ECA) and the United Nations Conference on Trade and Development (UNCTAD), the platform helps investors understand the country's opportunities, costs of doing business, key procedures and disclosure laws.

 

• Mauritius

10 best Countries to Do Business in Africa


This small island nation has one of the smallest market sizes on the continent, meaning it is overlooked by some investors. However, the country consistently ranks higher than other African countries in terms of ease of doing business. 

It currently ranks 20th in the World Bank's Ease of Doing Business Index. Mauritius' stable political system, liberal financial sector and low taxes that favor business creation make it an ideal environment for investors looking for a business-friendly and low-risk investment environment.

Mauritius last year signed a comprehensive free trade agreement (FTA) with China, Africa's first formal free trade agreement, and has expressed interest in becoming a shipping and financial hub on the Silk Road maritime trade route of China. 

Mauritius already has formal trade agreements with three African trading blocs: The Common Market for Eastern and Southern Africa, the Southern African Development Community and the East African Community.

 

• Morocco

10 best Countries to Do Business in Africa


Morocco is known for its vibrant culture, excellent cuisine and stunning scenery, as well as its friendly business environment. The significantly improved operating environment has positioned Morocco as a financial center and platform for European countries to access African markets. Between 2011 and 2019, Morocco rose from 114 to 60 in the business climate ranking, indicating an improvement in the business environment.

The Central Bank of the Kingdom of Morocco has predicted a growth rate of 3.1% in 2019. Tourism and manufacturing are expected to be the main growth drivers of the economy. The manufacturing sector is also expected to benefit from significant foreign investment in the automotive and aerospace industries.

 

• Nigeria

10 best Countries to Do Business in Africa


Africa's largest economy may not be attractive for near-term investment due to low economic growth and high political risks. Much is at stake in the 2019 election, when a vote in mid-February will be between President Muhammadu Buhari, who is trying to boost the economy after the 2016 recession, and former Vice President Atiku Abubakar, who is posing as an expert. -Company/Alternative.

We expect investors to take a wait-and-see approach before attempting to enter the market. Nigeria ranked first in the Ease of Doing Business Index, but was one of 46 economies worldwide that improved in three or more categories analyzed by the World Bank.

Two states in particular, Lagos and Kano, have made it easier to start a business by reducing the time it takes to register a company with the Corporate Affairs Commission and by introducing an online platform for paying stamp duty.

 

• South Africa

10 best Countries to Do Business in Africa


Boasting Africa's second largest economy, its complex legal and financial structures make it one of the easiest places to do business on the continent. But Africa's most industrialized economy struggled to grow before slipping into recession in the second quarter of 2018.

The euphoria surrounding Ramaphosa's announcement of ambitious reforms to revive the economy has since faded. Prime Minister Ramaphosa has outlined a "stimulus and recovery plan", but his plans could be disrupted by next year's general election.

The ruling African National Congress (ANC), facing corruption charges against former president Jacob Zuma, could face a major test of credibility and popularity in May's elections. 

The country, which grew by just 0.8% in 2018, is also facing difficulties with state-owned enterprises such as power utility Eskom and South African Airways (SAA).

 

• Egypt

10 best Countries to Do Business in Africa


Egypt has overtaken South Africa to top the 2018 Investment Attractiveness Index from Rand Merchant Bank, one of Africa's leading diversified financial services providers. 

As North Africa's largest economy recovers from the Arab Spring, the country has embarked on an economic reform program that secured $12 billion (Dh44 billion) in loans from the IMF.

In under the program, new taxes and a currency were introduced to the country to restore the economy, increase investor confidence and restore stability to the capital markets. South Korea dropped six places in the World Bank's Doing Business report, but was quick to issue several policy statements in the weeks following its publication.

These reforms helped the country rank eighth in the 2019 report. The World Bank said Egypt implemented five business reforms in 2017, the most in a single year in the country over the past decade. 

Among the changes, the time required to start a business was shortened from 16 days to 11 days. Strengthening corporate transparency to protect the rights of minority investors.

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