How Do African Countries Compare To Other Emerging Markets?

April 29, 2015

Are African countries doing enough to improve their business and regulatory environments as they compete with other emerging markets?

Neither China, India nor Brazil are in the World Bank’s top 50 easiest countries to do business, out of 189 countries ranked, according to a report in HowWeMadeItInAfrica by Kate Douglas.

Three African countries made the top 50, according to World Bank’s 2015 Doing Business index. By contrast, African countries made up 66 percent of the bottom 50.

Many African countries, especially Rwanda, are moving in the right direction but generally, can do a lot more to improve their overall investment climate, Douglas reported.

Cross-border trade, ease of transporting goods and free trade agreements will all help improve the Africa’s chances of attracting foreign investment.

DRC, Côte d’Ivoire, Senegal, and Togo were among the 10 most improved worldwide, improving business regulations the most in the previous year among the 189 economies covered, according to Doing Business 2015, released in October.

Since 2005, all countries in sub-Saharan Africa improved their business regulatory environment for small and medium-size businesses, with Rwanda implementing the most reforms, followed by Mauritius and Sierra Leone, World Bank reports.

Over the past five years, 11 different Sub-Saharan African countries appeared on the annual list of the 10 global top improvers. Some did so multiple times, such as Burundi, Cabo Verde, Côte d’Ivoire, and Rwanda.

Population growth is one of continental Africa’s strongest differentiators compared to other emerging regions including China, India and Brazil, according to HowWeMadeItInAfrica.

Although Africa’s population is similar in size to India and China, it’s also youthful, setting its growth rate apart. By 2050, an estimated one in four of the world’s workers will be African and the continent will be home to more than 2 billion people, bypassing China and India, according to Standard Bank research. By comparison, one in eight will be Chinese.

“If you can capture that population, particularly from an investment perspective, at a stage where you can educate and guide the right aspirations, then you potentially have a population that could drive a lot of innovation and support a lot of business investment,” said Mark Barnes, emerging markets leader at KPMG, one of the world’s “big four” auditors, along with Deloitte, EY and PwC.

To do this, African governments will need to focus on implementing the right supportive policies and infrastructure around education, healthcare, investment and employment, HowWeMadeItInAfrica reports.

Source: AFK Insider

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