Posts Tagged ‘business transformation’

The Improving Business and Investment Climate in Africa

Many foreign investors are having a hard time deciding whether to start a business in Africa or not. They doubt if investing in the world’s second largest continent should be a part of their business transformation. We can’t blame them because, aside from the fact that the fear closes their eyes from opportunities, the history of the business environment in Africa is somewhat impaired. Business doing is hard for many businessman because of what surrounds them. Business policies, cost, bureaucracy, people, these are the things that thwarts the entry of more investments inside the region.

And so, the African government is exerting intense effort to improve the business climate for their benefit and of course, the investors. And so far, they are doing a good job. The best proof is found on the improvements shown by over 17 African nations for the past decades. These countries enjoyed annual economic growth in excess of five percent since 1990s. Nine of them are near or above the seven percent growth rate threshold that is needed to sustain poverty. Before this result, during the past decade, there were only five countries seen casting progress on their economy. And the reason behind all of this? More trade and investments because of the better business environment.

Before anything else, the African government prioritized first the things that is needed to be changed on the way they do business. In fact, countries like Nigeria and Rwanda were mentioned by the World Bank and the International Finance Corporation as one of the safest place to do business in Africa and the whole world. Ghana, Rwanda, and Tanzania, are at the forefront of the trend within Africa to improve conditions for private companies, which in turn increases their economy’s ranking within the Doing Business report. And they are still working on it, little by little, they are making their area a haven for businesses. They working so hard to create good leadership, lessen the cost of business start-up fees, improve the very vital infrastructure, communication and business policies.

First thing that investors that were really doubt about is the infrastructure. But this was already aided, especially in Nigeria, Rwanda and Mauritius. This was initiated by many Chinese companies and now, the task of transporting goods or services is easier because of better access to transportation. Africa knows that this one, if not the most important, thing to consider when aiming for an expanded business environment.

In Ghana, the cost and time of business registration was improve. The method of taxation was also reduced. Tanzania did the same by adopting a risk-based customs inspection process, reduced the cost of registering a business, reduced property taxes by 3 percent, and revised its property law to improve investor protections. Nigeria cut the registration time from months to weeks. Kenya has replaced their paper-based custom administration with an electronic data interface system.

There are also many countries that showed remarkable improvements. Instead of going over all of them, why not make a plan and get your business started in Africa before it became too late for you. Opportunities are waiting for those who have the skills and possess admirable courage.