Best Countries To Do Business in Africa: Africa has a great reputation as a continent filled with resources, human and natural. This has made it attractive to major investors over the years. One of the biggest factors responsible for economic and social development within a clime is the ease with which businesses can operate. Where the right factors are in place within a State, the likelihood of attracting investors becomes really high.
However, before major investors will commit their resources to a particular business venture, there are a number of factors that must be present. One of these major factors that is at the forefront of their consideration is the ease of doing business within the State where the business is to be carried out.
In Africa, there are different countries that have repeatedly be rated as business-friendly nations, on account of the policies in place, available workforce, security, ease of getting required raw materials, the available market, favourable government policies, legal frameworks, et cetera. This article gives an update on the best countries as at 2024 to carry on a business in Africa.
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Factors Making for Ease of Doing Business
There are some things which must be in place for it to be said that there is ease in doing business in a particular clime. Some of the indices investors consider closely before making major decisions on where to do what business include:
a. Social-Political stability: This is of utmost importance as no investor will want to invest his resources in a country where there is turmoil and conflicts. Once conflicts break out in a country, most businesses are affected and it becomes really difficult to meet with projections, financial and otherwise.
b. Favourable laws and regulatory policies: The government usually sets the pace for businesses and establishments within a State by virtue of the kind of laws and policies in place. For governments interested in attracting investors, it is key to pass favourable laws and policies. Laws allowing for tax exemption or reduction for investors, capital exportation, and general favourable regulatory frameworks are necessary to attract real investors.
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c. Availability of Workforce: Most businesses require a large amount of workforce to function. Such businesses are better sited in places where these workforce can be easily accessed. It is sometimes very difficult and really expensive to bring professionals from outside a country.
d. Market presence: A business ought to be established at a place where there is a readily available market. Thus, will be more profitable to establish a business that requires a very large number of market in a highly populated country than in a scarcely populated country.
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e. Judicial systems: It is natural for humans to encounter problems when dealing with each other. It is therefore imperative that there is a structured way of dealing with these problems when they arise. A country with a well structured and equitable judicial system is therefore favoured.
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Top 14 Best Countries To Start A Business In Africa 2024
1. Mauritius: This may come as a surprise to many, but this country is rated as the best place to do business in Africa and 13th place in the world, in the 2020 World Bank Ease of Doing Business Rankings.
This country ticks most of the requirements most investors will be in search for- sound social-political system, favourable tax laws, stable economy, peaceful country, et cetera. It is no doubt one of the best places investors consider in Africa.
2. Rwanda: The 2020 World Bank Ease of Doing Business Rankings place this country as the second-best place to conduct business on the continent. Rwanda occupies the 38th position in the world. The economy of Rwanda has grown at a startling 6% annually since 2000.
The country seems to have erased all bureaucracy involved in getting a business started and dealing with regulatory agencies. It has a very good economy and a very peaceful environment for business.
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3. Morocco: This country is ranked as the 3rd best place to conduct business in Africa by the 2020 World Bank Ease of Doing Business Rankings. Morocco has very strong financial institutions and legal frameworks, and in recent times, it is now one of the most favourable places for financiers to do business.
4. Kenya: The World Bank ratees Kenya as the world’s top performer in starting a business and getting credit. There are elaborate laws to allow for ease in starting up businesses and generating the finance required to keep these businesses afloat.
The country occupied the 4th position in Africa and the 56th position globally in the 2020 World Bank Ease of Doing Business Rankings. The economy of Kenya has witnessed enormous growth of up to about 6% in recent times. It is one of the major hubs for tech companies on the continent.
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5. Tunisia: According to the 2020 World Bank Ease of Doing Business Rankings, the country is placed 5th in Africa and 78th globally. The country boasts of a high literacy level which is over 80% of its population (one of the highest in the world).
Asides this, the majority of the country’s population falls within the age bracket 18-25. This means that there is a huge educated workforce available to be utilized in this country. As a result of these wonderful conditions, it occupies this position in Africa.
6. South Africa: It is no surprise that South Africa is on this list. It used to be high up the list, but in recent times, a few other countries have overtaken it. It is currently placed in 6th position in Africa and 84th in the world. The South African economy is the second largest in Africa, only second to that of Nigeria. This country is also one of the most industrialized in Africa.
The country has a favourable social-political condition, good laws and governmental policies. It has in place advanced financial and legal structure, making it a hub to major international organizations in Africa such as MTN, Shoprite, Multichoice, et cetera. Despite its position in these recent rankings, it is still one of the highly considered places to do business on the continent.
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7. Zambia: Currently occupying the 7th position in Africa and 85th position globally, the relatively stable economy and political situation in the country makes it an attractive place to do business in Africa.
The government has over the years, privatized major public corporations in a bid to attract investors and jack up the economic situation of the country. The mining sector, agricultural sector and financial sector are some of the booming sectors in the country.
8. Togo: Although it is a small French-speaking country, it occupies the 8th position in Africa and 97th in the world index. There have been various reforms in recent years to make the country more favourable for businesses. This has helped influenced its position in recent rankings.
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9. Seychelles: No. 9 in Africa and No. 100 in the world, this beautiful island nation seem to be on the rise. Its has a huge tourist industry, attracting tourists and businesses from all over the world.
10. Ivory Coast: This country occupies the 10th position in Africa and 110th position in the world. Its stable political environment and strong economy seem to be responsible for attracting investors from different parts of the world.
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11. Senegal: Senegal has gained attraction as a good place for both local and foreign investors to establish and do meaningful business with ease and profit. Since her independence in 1960, Senegal has enjoyed peaceful transitions of democratically elected presidents and a somewhat political and social stability. It’s economy has also witnessed a steady growth.
The country prides itself in its enabling business laws that facilitate a business friendly environment for small and medium business establishment and that has equally created appellation to large scale investors to settle down in the country. The country’s membership with major reputable African Organizations such as ECOWAS opens it to even more attraction to both African countries and Western Capitalists.
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12. Ethiopia: Ethiopia is an independent State with multi-ethnicity of over 80 ethnic groups. With it’s Capital and largest city as Addis Ababa, Ethiopia is the second largest populated State in Africa. Ethiopia is also a member and founding member of most international Social and Economic Organizations in both Africa and Europe.
The Capital of Ethiopia remains the Headquarter African Union, the Pan African Chamber of Commerce and Industry, the United Nations Economic Commission for Africa. With a fast growing economy and fastest growing non-oil economy according to IMF, Ethiopia remains a viable State for both local and foreign investors to establish and run a stable and profitable business in small and large scale.
The country is renowned for its agricultural sector which remains the largest sector and contributes over 36% of its GDP. These goes to show its political and economic stability, enabling business environment and viable business laws that nurture businesses in the State.
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13. Botswana: Botswana is one of the African countries with the lowest corruption rate. It used to be one of the poorest countries in the world in the late 60’s with a population of slightly over 1.2million people. Botswana has however transformed into one of the fastest growing economies in Africa with large concentration on mining, cattle and tourism.
It is the world’s biggest Diamond producer. This transformation has also reflected in it’s political and social structure thereby providing a business friendly environment for investors to thrive.
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14. Egypt: Egypt is a country renowned for its’ ancient cultural heritage and the most populous country in North Africa. Egypt boast of a stable economy reliant on agriculture, tourism, Oil and media. With a stable economy and social structure, Egypt remains one of the best countries to do business with ease and experience exponential growth per capita.
It is one of the world’s famous tourism center due to its ancient cultural heritage and artifacts that attracts tourist from all over the world and contribute to the country’s GDP. These opens Egypt as a viable market to continents and a stable environment for foreign investment.
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15. Namibia: The Namibian economy is tilted towards mining, tourism, agriculture and minimal manufacturing sector. This exposes it’s suitability for local and foreign investment in any of it’s existing economic sector. The country have had it’s share of political disruptions but currently enjoys a solemn political and economic stability as well as social structure.
It is indeed a good place to establish a viable business because it has a business friendly laws and structure with social security. It was rated as top emerging market in 2013 by Bloomberg, and 13th best in the world for places of doing business.
16. Eswantini: Eswantini pride itself as a member of the United Nations as well as the Commonwealth of Nations, and the African Union among others. With a parliamentary system of Government, it major economic occupation (though tied to the South African economy) is Agriculture, mining, textile and manufacturing.
It has a stable legal system and political structure that support business and social security to ensure a thriving economy.
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Conclusion
The above shows the countries that occupy the top 14 position with respect to ease of doing business in Africa. It is worthy to note however that aside these countries, there are other notable countries for doing business such as Nigeria, Ghana, Ethiopia and Egypt. They may have missed the top 10 cut, but they are no doubt great places to conduct business in Africa.
Edeh Samuel Chukwuemeka, ACMC, is a lawyer and a certified mediator/conciliator in Nigeria. He is also a developer with knowledge in various programming languages. Samuel is determined to leverage his skills in technology, SEO, and legal practice to revolutionize the legal profession worldwide by creating web and mobile applications that simplify legal research. Sam is also passionate about educating and providing valuable information to people.