Africa’s 10 Most Business-Friendly Countries

The World Bank released its 2013 Doing Business report this week. The document ranks all the world’s nations on how hospitable they are to starting and running a business.

Ranking criteria include everything from construction permits to taxation to the accessibility of credit.

Let’s count down the top ten easiest African countries to do business and list some of the recent reforms they’ve undertaken that make them favorites of African entrepreneurs and CEOs.

10. Kenya (Global Rank #121)
  • Enhanced electronic filing systems which eased the process of paying taxes, reducing the average time required to file taxes from 393 hours to 340 hours.
  • Made contract enforcement easier by introducing a new case management system for the resolution of commercial disputes.
  • Reduced the amount of red tape involved in registering a new business. As a result, the start-up process is two days shorter than it was in 2010.
 9. Uganda (Global Rank #120)

Photo by Wayan Vota

  • Clarified mortgage rules which reduced the risks involved in lending (and borrowing) to homeowners.
  • Established a private credit bureau. The agency now maintains credit information on 3.7% of Ugandan adults from 0% just three years ago.
  • Streamlined its court system, shortening the amount of time to resolve a case by an average of 20 days since 2010.
8. Zambia (Global Rank #94)
  • Eliminated the minimum capital requirement for starting a business, encouraging potential entrepreneurs.
  • Consolidated its border post with Zimbabwe to ease the flow of goods and allowed customs declarations to be submitted online, reducing the average time to import and export goods by roughly 15% since 2010.
  • Brought its court system into the cyber-age, allowing electronic reference of cases, laws, and records.
7. Namibia (Global Rank #87)
  • Reduced the time and expense required to connect to the electrical grid. On average, it now takes 38 days. Last year it took 55.
  • Adopted new legislation that clarifies the procedures for liquidation.
  • Computerized the system for registering a new business, slashing registration times.
6. Seychelles (Global Rank #74)
  • Over the past five years, eliminated the social security tax and reduced labor and corporate income taxes. The three cuts resulted in the effective tax rate dropping from 48.4% in 2008 to 25.7% today.
5. Ghana (Global Rank #64)
  • Granted an operating license to a private credit bureau, providing credit info on nearly 6% of the adult population. The country now ranks 23rd in the world in access to credit.
  • Drastically reduced the amount of time it takes to launch a new business. It now takes just 12 days compared to 42 in 2008. Moreover, the minimum capital requirement has been lowered considerably and now equates to just 4.3% of per capita income. It was more than 20% of per capita income five years ago.
4. Botswana (Global Rank #59)
  • Upgrades at the country’s busiest border post with South Africa have slashed the length of time for import and export of goods by nearly a week.
  • Streamlined business start-up procedures; reducing the length of time to get a business rolling by over 40% (47 days since 2008).
  • Technology upgrades in the Botswana court system have sped up the resolution of commercial disputes, reducing the average court case from 987 days in 2008 to 625 days presently.
 3. Rwanda (Global Rank #52)
  • Now one of the easiest places in the world to start a business (Global Rank #8), entrepreneurs can be up and running in just three days time and registration fees are negligible.
  • A private credit bureau boasts very deep credit information on over 7% of the adult population. Consumers have the right to inspect their own credit reports.
  • Shortened the length of time required for connection to the electricity grid from 55 days in 2011 to 30 days today.
2. South Africa (Global Rank #39)
  • The best place in the world to obtain credit. Credit rating agencies have access to a wealth of data and legal protection for lender and borrower is unparalleled.
  • Instituted a customs modernization program that reduced export times from 30 days in 2008 to 16 days now and import times from 35 to 23 days.
  • Simplified the tax code to reduce tax prep times from 350 hours per year five years ago to 200 hours per in 2012. Also reduced the effective tax rate from 37.1% to 33.3%.
1. Mauritius (Global Rank #19)
  • Eased property transfers by implementing an electronic record-keeping system and by statutorily limiting the length of time it takes to receive land title. It now takes just 15 days to register property in Mauritius. Five years ago, it took 210 days.
  • Instituted a wide-ranging and deep public credit registry. Credit info is now available for the majority (56%) of the adult population.
  • Recruited more judges and added more court rooms to reduce judicial backlog, shortening the average court case by more than 100 days.
What Do You Think?

So there you have it.  Africa’s best homes for business. Do the results surprise you? Let us know why or why not in the comments!

Comments

  1. Dark.iNiTro says:

    Very interesting information! Of cause results are surprise because Russia is only #112 place! Very sad for us!

  2. Francis Masawi says:

    I wonder which is the worst country to do business in Africa?

  3. Does this necessarily mean they are easy to operate in effectively? I find regulations and laws controlling business in S.A. are very restrictive. Too many laws.

    • I believe they are trying to rank overall ease of doing business – regulatory environment included. So, relative to the rest of Africa, the World Bank believes South Africa continues to do very well.

  4. Great article. I wish that the report used can incorporate digital-technology related criteria in the future – including ease of access, cost and speed of bandwidth. It would be interesting to see how changes the order, if at all.

  5. Well, all has been said based on generic terms. I would rather do business in a country that isn’t corrupt and that supports production and manufacturing. Where people don’t strike, are conscious of their work, and take their work seriously, instead of a country where people strike for a salary increase everyday. People are not skilled or educated, but they want high wages. People are very lazy and do not want to work at all. This does not support production and manufacturing.

  6. Mike Matanda says:

    The list appears to be made up largely of Anglophone countries! Well done, though. Has language (read English) got anything to do with ease of business?

    • I don’t believe the World Bank included English-usage as one of its criteria when ranking global business environments. It’s an interesting question, though. For what it’s worth, Mauritius, Rwanda, and the Seychelles are all French-speaking, but they have rapidly adopted English as the language of business.

  7. Interesting and encouraging, obviously more work needs to be done but it’s helpful that some progress has not gone unnoticed.

  8. onyinye obi says:

    You didn’t rank Nigeria as one of them, why? I am a Nigerian and would like to know what our crime is that we are not pure and fair in our business dealings as the world ranks it. Thanks.

    • Hi Onyinye,
      I understand your concern, and let me first clarify that these rankings are actually compiled by the World Bank, not me. With that said, the good news is that Nigeria actually improved slightly over the previous year’s ranking. It ranks 131 out of all countries surveyed. Last year it ranked 133. Nigeria’s improvements in the past year came in the form of improved access to credit. Unfortunately, the difficulty of obtaining electricity, registering property, and paying taxes make running a business in Nigeria very difficult compared to these other African countries.

      I see lots of reform happening in Nigeria, though, so perhaps the 2014 report will show Nigeria rising up the table!

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