Africa is rich in natural resources and versatile in the business. However, it also has a huge untapped potential in millions of highly educated and skilled young population. Also, the recent report by the World Bank reveals that the continent is now turning into a hub of growth. Thanks to the hard work of its governments as well as the people. Africa has now become the newest destination for emerging market investors.
The World Economic Forum opines that from the early 2000s, nearly half of the world’s fastest-growing nations are in Africa. In 2018, Ethiopia and Ghana showed exceptional real GDP growth of over eight percent. With youth as its theme, the continent is going through a demographic change. A high proportion of the population are teenagers or in their 30s. Furthermore, Africa also has the advantage of being relatively stable in terms of governance and security. The nations that witnessed severe unrest in the past decade are gradually recovering too.
Africa’s business environment and trade policies are increasing tremendously. The World Bank’s ease of doing business report is a testament to this progress. In the latest report, Mauritius, Rwanda, and Morocco were among the top-ranked countries in Africa in bringing reforms. The global lender assesses more than 190 nations based on key indicators, including electricity, access to credit cards, construction permits, and registering property or business.
10 Easiest Countries to Do Business in Africa 2020
Reading through the entire report may not be convenient for everyone. Therefore, we have a list of the top 10 easiest countries to do business in Africa in 2020.
Mauritius is one of the countries that has set the pace in ease of doing business. According to the latest report of the World Bank, it made a significant improvement and moved seven places to 13th out of 190. The nation has successfully transformed its economy amidst a fast-changing global business landscape. So, why invest in Mauritius? Well, here is an answer. For any global investor, the main concern remains political and social stability. Mauritius is ranked 21st most peaceful country across the world with one of the strongest democracies in Africa. Additionally, it has the fastest-growing economies in the region and has a very generous tax regime. Today, any investor can settle hassle-free in the country.
With its economic growth averaging six percent, it is among the best economic performers in the continent. In 2019, the country recorded the most economic reforms and ranked 38th in the World Banks’ global rankings. In its report, the Bank noted that Rwanda “carried out the most reforms since the inception of Doing Business 16 years ago. Moreover, the country is rich in natural resources, including minerals and agriculture. You will not have to worry about getting construction permits and registering the business as it is only second to New Zealand in this. Rwanda’s government has made significant progress in replacing its bureaucratic system with a digital one. Additionally, people here in the country are bilingual. So, you do not have to worry if you speak French, English, and Swahili. it turns out that they can speak all these languages.
Famous for its vibrant culture, an awe-inspiring landscape, and outstanding cuisine, Morocco is also ranked at the top of the easiest African countries to do business this year. We are sure that it will keep making progress and remain among the top economic performers. The government has turned its attention towards enhancing the operating environment. Thus, Morocco is on the road to becoming a financial hub. In the future, European countries will have access to African markets through this nation. Meanwhile, manufacturing and tourism remain the best performing industries and growth drivers in the country. The increasing foreign investment in the aeronautic and auto industry is also a key driver of economic expansion. So, what are you waiting for?
In 2020, Kenya joins the list of best cost-efficient countries in Africa for new business. The World Bank expects at least a five percent growth this year. Not only that the country has a pacified political environment but has favorable weather conditions. However, the best thing about Kenya is diversity and sustained expansion in consumer demand. Besides, it also benefits from the rising urbanization, improving infrastructure, and systematic reforms. The government’s will to improve the business environment in the country justifies the 31 spots jump in doing business ranking.
The global lender ranks Tunisia 78th economy in the world in terms of improvement in ease of doing business and fifth in Africa. Although the country has tackled some major security issues in recent years, its economy has continuously grown since 2011. The young nation has a whopping 80 percent literacy rate, and its average age is 18-25. It means that Tunisia has a large population of skilled young labor. In addition to improving security, the government has ensured business stability. In a bid to gain the trust of investors, the authorities reduced the tax to some 25-30 percent a few years ago. Most of the people in the country speak Arabic. So, no hassle for the Middle Eastern investors. For the people from Europe and America a large chunk of the population also speaks fluent French and English.
#6. South Africa
With a population of 55.9 million, South Africa remains the economy with a liquid financial market compared to other countries across Africa. Moreover, many global investors think of it as the springboard for investment. South Africa has also carried out some structural reforms including state-owned enterprises. If the authorities aggressively take on the reform agenda, the nation can easily take the number one spot back. So, what do you stand to gain by investing in South Africa? Well, you have a variety of industries that are growing exponentially, especially in retail, financial services, and real estate. Also, it has one of the best business environments in the developing world.
People who decide to do business in Zambia will find a relatively stable political environment complemented with positive economic growth in recent years. Lusaka, the capital of the country, has the most important commercial centers where the majority of Zambia’s urban population lives. In the past few years, the privatization of its mining sector has attracted global investors. It is the largest producer of copper-rich natural resources and has an evolving agriculture sector. The World Bank’s latest report suggests that the nation bagged the 85th spot out of 190 countries evaluated. Also, the bank acknowledged its improvement in various departments, including getting credit and paying taxes.
With a population of nearly 7.9 million people, Togo is a small West African country. It moved an impressive forty places from 137th in the list of top improvers this year. Togo’s top reforms, include an online portal for construction permits, reducing investors’ stress, and saving time of developers. The government now understands that it is critical to facilitate and incentivize the private sector for job creation. World Banks Press Release suggested, “Togo is on the list of top improvers for the second year in a row thanks to reforms lowering fees for construction permits and streamlining property registration procedures, among others.” This is the second consecutive year it ranked as the top performers in Africa in terms of improvement in doing business. If you are an entrepreneur, then it is high time that you look forward to investing in this country.
Nigeria has the biggest economy in Africa and one the best place for doing business in Africa in 2020. The smooth reelection of President Muhammad Buhari has worked hard to improve the economic situation in the country. The resilient people of Nigeria are doing their best to bring their economy back to track. Even though Nigeria lost one spot in the ease of doing business index, it was still among the forty-three economies that improved its overall ranking. The World Bank pointed out that the governments in the two most populous states, Lagos and Kano, have made opening and registering a new business easy.
Seychelles is nestled carefully in the center of the Indian ocean. Apart from the beauty of the country, it has recorded a significant surge in foreign investment. Most of it comes from offshore investors for whom it offers lots of incentives. One of the reasons why foreign investors are choosing to invest in the country is because of its advanced communication system. The government has spent time and money on placing optical fiber cables to connect it to other countries in Africa for business. Besides, Seychelles is now focusing on expanding its tourism sector. With its clean and breath-taking beaches, it continues to attract millions of tourists from across the world.
Did any country on the list surprise you? Does this list represent the reality in your country? Feel free to share your views in the comment box below.