Africa Upgrades Its Business Climate

This year’s edition of an annual report from the World Bank measuring how easy or hard it is to start and run a business around the world has good news for sub-Saharan Africa. In its 2012 Doing Business survey, the bank found that in 36 of 46 countries – 78 percent of the economies in the region – regulatory reforms were untangling more of the red tape and instituting more legal protection for investors and property owners.

The ability to start a business, however small, is an important step up the development process, allowing citizens to create wealth, provide jobs and move from the basic, often small-farming or local marketing ranks of the economy, to higher levels of production.

Where regulation is burdensome or lax, the bank noted, “Success depends more on whom you know than on what you can do.”

African entrepreneurs still face more obstacles than their counterparts in rich counties, the report said (, citing inadequate infrastructure, unqualified job applicants and persistent regulatory snags. Of 183 countries surveyed globally, only four African nations – Mauritius, South Africa, Rwanda and Tunisia – rank in the top 50 countries. For Rwanda, this is a remarkable feat. Less than two decades ago, a wrenching and destructive campaign of genocide and a civil war left the country in near ruins.

Merchants in Kano, Nigeria, selling fabric imported from China. A World Bank report says that conditions for doing business in sub-Saharan Africa are improving. PHOTO BY JOE PENNEY

Topping the list of most business friendly nations or territories are Singapore, in first place, followed by Hong Kong, New Zealand, the United States, Denmark, Norway, Britain, South Korea (in the top 10 for the first time), Ireland and Iceland. Morocco and Macedonia, along with South Korea, were among countries cited as having made the most progress among nations in the past year.

The hallmarks of high rankings among countries where doing business is easiest include access to reliable information on all kinds of regulations, from fee schedules to insolvency procedures – an important factor in times of economic and financial crises.

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