151. Different skills required.
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BUSINESS conditions , *RED tape , *ENTREPRENEURSHIP , *ECONOMIC development , *ECONOMIC activity , *COMMERCE ,ECONOMIC conditions in developing countries - Abstract
The article discusses the business climate in Africa. According to the World Bank's annual "Doing Business" report, sub-Saharan Africa is, on average, the most difficult place to do business in the world when it comes to red tape. As a result, over 40% of the region's economy is informal. Big foreign investors are said often to negotiate special deals while small local entrepreneurs are left to cope with business-unfriendly rules that make it hard for them to survive. And firms of all sorts must contend with the severe problems of political upheaval, war, corruption and an HIV/AIDS pandemic. Cumbersome logistics, poor infrastructure, abundant red tape, a shortage of skilled workers and HIV/AIDS remain real challenges. Local entrepreneurs face other problems as well, such as lack of capital--despite the rapid growth of micro-finance in some parts of Africa. Yet, outside troubled countries such as Sudan and Zimbabwe, there is healthy economic growth to exploit. GDP in each of 14 sub-Saharan African countries has grown by at least 5% a year since the mid-1990s. Botswana and South Africa have long topped "best African business environment" charts, but other countries are making quiet progress. Since Uganda started to improve its business environment in the early 1990s, private investment as a share of GDP has more than doubled. Some foreign investors point to a drop in petty corruption and better courts in important countries such as Nigeria. Many businesses in the continent now talk of doing their bit to improve "brand Africa". After consultations for the "Commission for Africa" report, prepared with the G8 summit in mind, a group of big multinationals including De Beers, Nestle and Standard Chartered has formed Business Action for Africa (BAA), which will be launched at next week's business summit.
- Published
- 2005