Abstract

This report summarizes indicators of the ease of doing business compiled by the Doing Business project of the World Bank with especial focus on Africa. To evaluate the performance of Africa in a broader perspective, the indicators for the region are compared with those of two other developing regions—Latin America and East Asia. Comparison of the indicators for the regions reveals the difficulties involved in doing business in Africa. These include stringent bureaucratic hurdles for setting up and running a business, limited access to credit, inefficient business tax system, minimal protection to private sector participants, limited legal enforcement of business contracts, and generally less conducive environment for undertaking international trade. The region's performance is very low especially compared with East Asia and the Pacific region. The level of economic development and the type of legal system are among the factors that are usually held responsible for causing inter-country differences in the ease of doing business. In this regard, the ranking of countries on the basis of "ease of doing business" indicator shows that all of the five best performers in Africa in 2003 (in descending order: Mauritius, South Africa, Namibia, Botswana, and Tunisia) are middle income countries. While South Africa, Namibia, and Botswana adopted/adapted the British Common law, Tunisia's legal system is based on the French legal tradition. On the other hand, the legal tradition of Africa's best performer (Mauritius) is an amalgam of the British and French legal traditions. Analysis of the ease of doing business over three years (2003-2005) reveals that most of the countries in Africa did not have reforms aimed at improving the ease with which the type of businesses analyzed by the Doing Business project are undertaken.

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Citation

Dharmadhikari, Kartik. "Ease of Doing Business in Africa." Chazen Web Journal of International Business (2008). http://www.gsb.columbia.edu/chazen/journal.

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