Investors, both local and international, prefer to invest in productive economies where they ultimately would have good returns for their money. A productive economy (competitive, if you like) which guarantees safe investments and promises good returns has some basic requirements that are inherent in the system of operation in those countries. Most times, the people have a say in who and how they are governed (Democracy).

1. THE MOST PROBLEMATIC
FACTORS FOR DOING BUSINESS
IN AFRICA

2. Investors, both local and international, prefer to invest in productive economies where
they ultimately would have good returns for their money. A productive economy
(competitive, if you like) which guarantees safe investments and promises good returns
has some basic requirements that are inherent in the system of operation in those
countries. Most times, the people have a say in who and how they are governed
(Democracy).
Public office holders are accountable to the people with severe repercussion if they
fondle with public funds. As a results, monies that are allocated for infrastructural
development are rightly deployed for their proper use. These countries have sound
education systems, producing bright minds that eventually develop, discover or invent
commercially viable products and services – which generates returns to their host
countries.
The reverse described above is true for countries that could be regarded as non-competitive.
In simple terms, investors face serious problems – both from the people
and their governments – doing business in such countries. This study looks at the most
problematic factors for doing business in Africa as compiled from the Global
Competitive Index report of 2009-2010 up to the latest report of 2014-2015 (6 reports).

3. THE MOST PROBLEMATIC FACTORS FOR DOING BUSINESS
The World Economic Forum yearly report – Global Competitive Index (GCI) – contain a
section that collects the perspective of CEOs and top executives from around the world on
the main bottlenecks to doing business in their countries. Specifically, they are asked to rank
the most problematic factors that they face in doing business in their country out of 15
possible factors. The results were then tabulated and weighted according to the ranking
assigned by respondents.
The lists “The Most Problematic
Factors for Doing Business” in each
African country were compiled
from GCI reports of 2009-2010 up
to 2014-2015, which gives a
comprehensive list of problematic
factors for a period of 6years.
Till date, a total of 40 African
countries have been reported in
the GCI report.

4. LIST OF PROBLEMATIC FACTORS
No. The most problematic factors for doing business
1 ACCESS TO FINANCING
2 CORRUPTION
3 CRIME AND THEFT
4 FOREIGN CURRENCY REGULATIONS
5 GOVERNMENT INSTABILITY/COUPS
6 INADEQUATE SUPPLY OF INFRASTRUCTURE
7 INADEQUATELY EDUCATED WORKFORCE
8 INEFFICIENT GOVERNMENT BUREAUCRACY
9 INFLATION
10 INSUFFICIENT CAPACITY TO INNOVATE
11 POLICY INSTABILITY
12 POOR PUBLIC HEALTH
13 POOR WORK ETHIC IN NATIONAL LABOR FORCE
14 RESTRICTIVE LABOR REGULATIONS
15 TAX RATES
16 TAX REGULATIONS
The list of
problematic
factors for doing
business in Africa,
gathered from 40
African countries
over a period of
6years.

5. PROBLEMATIC FACTORS & LIKELY PILLARS
No. The most problematic factors for doing business PILLARS
1 ACCESS TO FINANCING FINANCIAL MARKET DEVELOPMENT
2 TAX RATES GOODS MARKET EFFICIENCY
3 POOR PUBLIC HEALTH HEALTH AND PRIMARY EDUCATION
4 INADEQUATE SUPPLY OF INFRASTRUCTURE INFRASTRUCTURE
5 INSUFFICIENT CAPACITY TO INNOVATE INNOVATION
6 CORRUPTION
7 CRIME AND THEFT
8 GOVERNMENT INSTABILITY/COUPS
INSTITUTIONS
9 INEFFICIENT GOVERNMENT BUREAUCRACY
10 POLICY INSTABILITY
11 TAX REGULATIONS
12 INADEQUATELY EDUCATED WORKFORCE HIGHER EDUCATION AND TRAINING
13 POOR WORK ETHIC IN NATIONAL LABOR FORCE
LABOR MARKET EFFICIENCY
14 RESTRICTIVE LABOR REGULATIONS
15 INFLATION MACROECONOMIC ENVIRONMENT
16 FOREIGN CURRENCY REGULATIONS MARKET SIZE

6. We may be able to prematurely
conclude that a Nation that
gets its INSTITUTIONS right,
would have succeeded in
solving a whole lots of
PROBLEMS OF DOING BUSINESS

7. PROBLEM - 1: ACCESS TO FINANCING
According to respondents; Tunisia, Lesotho,
and Nigeria are the most affected by Access
to Financing. However, Nigeria seems to be
the most affected as they consistently
obtained high rating from respondents.
Mozambique, Angola, and Algeria are least affected by the LACK OF
ACCESS TO FINANCING.
THE LACK OF “ACCESS TO FINANCING”,
COUNTRY % OF RESPONDENT
TUNISIA 28.2
LESOTHO 24.8
NIGERIA 24.6
LIMITS THE RANGE OF EXECUTABLE
OPPORTUNITIES AVAILABLE TO
INVESTORS AND ENTREPRENEURS.

8. ACCESS TO FINANCING
Access to finance refers to the possibility that individuals or enterprises can
access financial services, including credit, deposit, payment, insurance, and
other risk management services. Those who involuntarily have no or only
limited access to financial services are referred to as the unbanked or
underbanked, respectively
Accumulated evidence has shown that financial access promotes growth for
enterprises through the provision of credit to both new and existing businesses.
It benefits the economy in general by accelerating economic growth,
intensifying competition, as well as boosting demand for labor.
The lack of financial access limits the range of services and credits for household
and enterprises. Poor individuals and small enterprises need to rely on their
personal wealth or internal resources to invest in their education and
businesses, which limits their full potential and leading to the cycle of persistent
inequality and diminished growth. https://en.wikipedia.org/wiki/Access_to_finance

9. PROBLEM - 2: INADEQUATE SUPPLY OF
INFRASTRUCTURE
Nigeria, Lesotho, and Tunisia are the most
affected by Inadequate Supply of
Infrastructure. Nigeria and Kenya are most
affected as they consistently obtained high
rating from respondents.
Inadequate Supply of Infrastructure is directly related to; Quality of roads,
railroad infrastructure, port infrastructure, air transport infrastructure,
electricity supply, and telephone lines/subscriptions.
INADEQUATE SUPPLY OF INFRASTRUCTURE LIMITS
COUNTRY % OF RESPONDENT
NIGERIA 26.1
LESOTHO 24.9
TUNISIA 24.6
PRODUCTION, COMMUNICATION AND
TRANSPORTATION.

10. INADEQUATE SUPPLY OF INFRASTRUCTURE
“As the backbone for greater economic activity, efficiency and competitiveness,
infrastructure, such as transport, information and communication technology,
electricity and water, are crucial as an enabler of the private sector to achieve
higher production levels and wealth in economies,” says Edinger.
She points out that the absence of good and sufficient regional and cross-border
infrastructure between sub-Saharan African countries constricts their
economic potential. This has limited output across a number of sectors on the
continent.
The report states that it is accepted that insufficient investment in, and
maintenance of, Africa’s core infrastructure has, to a large extent, impeded
economic development because of the high costs of doing business in and
between markets on the continent.
http://www.miningweekly.com/article/inadequate-infrastructure-restrains-development-in-africa-2009-11-06-1

11. PROBLEM - 3: POLICY INSTABILITY
COUNTRY % OF RESPONDENT
TUNISIA 29.2
LESOTHO 24.6
TANZANIA 20.9
Tunisia, Lesotho, and Tanzania are the
most affected by Policy Instability.
Policy Instability is directly related to; Burden of government regulation,
Efficiency of legal framework in settling disputes, Efficiency of legal
framework in challenging regulations, and Transparency of government
policymaking.
ONE OF THE WAYS TO RECOGNIZE
WEAK INSTITUTIONS IS THROUGH
POLICY INSTABILITY.

12. POLICY INSTABILITY
Policy instability is defined here as a policy which is contradictory to policy
positions that political leaders have committed to during elections and formed
coalitions on their basis.
QUANDARY AND POLITICAL
COMPETITION INCREASE THE
LIKELIHOOD FOR RADICAL POLICY
INSTABILITY.
http://www.academia.edu/3653358/Policy_Instability_as_a_Purposeful_Choice

13. PROBLEM - 4: CORRUPTION
Tunisia, Lesotho, and Mali are the most
affected by Corruption. Nigeria and Kenya
are most affected as they consistently
obtained high rating from respondents.
Corruption is directly related to; Diversion of public funds, Public trust of
politicians, Irregular payments and bribes, Favoritism in decisions of
government officials, and Wastefulness of government spending.
CORRUPTION THRIVES WHERE THE RULE
COUNTRY % OF RESPONDENT
TUNISIA 25.3
LESOTHO 25
MALI 21.9
OF LAW IS WEAK OR NON-EXISTENCE
AND THERE IS NO ENFORCEMENT OF THE
“LAW OF CAUSE AND EFFECT”.

14. CORRUPTION
In philosophical, theological, or moral discussions, corruption is spiritual or
moral impurity or deviation from an ideal. Corruption may include many
activities including bribery and embezzlement. Government, or 'political',
corruption occurs when an office-holder or other governmental employee acts
in an official capacity for personal gain
https://en.wikipedia.org/wiki/Corruption
Political corruption is the use of powers by government officials for illegitimate
private gain. An illegal act by an officeholder constitutes political corruption only
if the act is directly related to their official duties, is done under color of law or
involves trading in influence.
Corruption may facilitate criminal enterprise such as drug trafficking, money
laundering, and human trafficking, though is not restricted to these activities. Misuse of
government power for other purposes, such as repression of political opponents and
general police brutality, is not considered political corruption. Neither are illegal acts by
private persons or corporations not directly involved with the government.
https://en.wikipedia.org/wiki/Political_corruption

15. PROBLEM - 5: CRIME AND THEFT
COUNTRY % OF RESPONDENT
LESOTHO 28.1
TUNISIA 26.9
MALI 21.0
Lesotho, Tunisia, and Mali are the
most affected by Crime ands
Theft.
Crime and Theft is directly related to; Business costs of crime and violence,
Organized crime, Reliability of police services.
CRIME AND THEFT PREVAILS WHEN THE
ORGAN OF GOVERNMENT THAT EFFECT LAW
AND ORDER HAS FAILED – AGAIN IT IS THE
RESULT OF WEAK INSTITUTIONS.

16. CRIME AND THEFT
In common usage, theft is the taking of another person's property without that
person's permission or consent with the intent to deprive the rightful owner of
it.
The word is also used as an informal shorthand term for some crimes against
property, such as burglary, embezzlement, larceny, looting, robbery, shoplifting,
library theft, and fraud. In some jurisdictions, theft is considered to be
synonymous with larceny; in others, theft has replaced larceny. Someone who
carries out an act of or makes a career of theft is known as a thief. The act of
theft is known by terms such as stealing, thieving, wicksing, and filching.
https://en.wikipedia.org/wiki/Theft
One proposed definition is that a crime, also called an offence or a criminal offence, is
an act harmful not only to some individual, but also to the community or the state (a
public wrong). Such acts are forbidden and punishable by law.
https://en.wikipedia.org/wiki/Crime

17. PROBLEM - 6: INEFFICIENT GOVERNMENT BUREAUCRACY
COUNTRY % OF RESPONDENT
TUNISIA 27.3
LESOTHO 24.8
MALI 23.3
Tunisia, Lesotho, and Mali are the
most affected by Inefficient
government bureaucracy.
Inefficient government bureaucracy is directly related to; Favoritism in
decisions of government officials and Transparency of government
policymaking.
INEFFICIENT GOVERNMENT
BUREAUCRACY ATTEST TO WEAK
INSTITUTIONS.

18. INEFFICIENT GOVERNMENT BUREAUCRACY
A bureaucracy is a complex organization that usually contains hundreds or even
thousands of employees, each with different duties and responsibilities.
Bureaucracies exist in all types of organizations -- private, public, government,
business, charities, corporations, even households. The study of public choice
indicates that government bureaucracies are one source of government
inefficiency.
GOVERNMENT BUREAUCRACIES
http://www.amosweb.com/
Public bureaucracies are less efficient than private organizations in many of their
activities. This is generally attributed to the absence of competition and of the profit
motive, and to the particular constraints of public bureaucracies with regards to
transparency and the weaker governance of the political market.
Why are Government Bureaucracies Inefficient? A Prospective Approach
Secor Consulting, May 12, 2012.

19. PROBLEM - 7: FOREIGN CURRENCY REGULATIONS
COUNTRY % OF RESPONDENT
UGANDA 32.3
LESOTHO 24.8
TUNISIA 24.3
Uganda, Lesotho, and Tunisia are the
most affected by Foreign Currency
Regulations.
Foreign Currency Regulations is related to; Regulation of securities
exchanges

20. PROBLEM - 8: TAX REGULATIONS
COUNTRY % OF RESPONDENT
MALI 26.0
TUNISIA 24.8
LESOTHO 24.5
Mali, Tunisia, and Lesotho are the
most affected by Tax Regulations.
Tax Regulations is directly related to; Extent and effect of taxation, Effect
of taxation on incentives to work.

21. TAX REGULATIONS
Tax law is an area of legal study dealing with the statutory, regulatory,
constitutional, and common-law rules that constitute the law applicable to
taxation, which is the method by which the government levies on economic
transactions.
https://en.wikipedia.org/wiki/Tax_law
A tax (from the Latin taxo; "rate") is a financial charge or other levy imposed
upon a taxpayer (an individual or legal entity) by a state or the functional
equivalent of a state such that failure to pay, or evasion of or resistance to
collection, is punishable by law. Taxes are also imposed by many administrative
divisions. Taxes consist of direct or indirect taxes and may be paid in money or
as its labour equivalent.
https://en.wikipedia.org/wiki/Tax

22. PROBLEM - 9: INADEQUATELY EDUCATED WORKFORCE
COUNTRY % OF RESPONDENT
LESOTHO 25.9
TUNISIA 24.5
MALI 23.6
Lesotho, Tunisia, and Mali are the most
affected by Inadequately educated
workforce.
Inadequately educated workforce is directly related to; Quality of the
educational system, Extent of staff training, Brain drain, Country capacity
to retain talent, Country capacity to attract talent.
PROBLEM - 10: POOR WORK ETHIC IN NATIONAL LABOR FORCE
COUNTRY % OF RESPONDENT
LESOTHO 25.4
TUNISIA 24.6
TANZANIA 20.2
Lesotho, Tunisia, and Tanzania are the most
affected by Poor work ethic in national
labor force.
Poor work ethic in national labor force is directly related to; Hiring and firing
practices, Pay and productivity, Country capacity to retain talent, Country
capacity to attract talent, Cooperation in labor-employer relations.

23. PROBLEM - 11: GOVERNMENT INSTABILITY/COUPS
COUNTRY % OF RESPONDENT
TUNISIA 28.6
LESOTHO 22.1
MALI 21.3
Tunisia, Lesotho, and Mali are the most
affected by Government instability/coups.
Government instability/coups is directly related to; Favoritism in decisions
of government officials, Judicial independence.
PROBLEM - 12: TAX RATES
COUNTRY % OF RESPONDENT
LESOTHO 26.2
TUNISIA 24.7
MALI 23.8
Lesotho, Tunisia, and Mali are the most
affected by Tax Rates.
Tax Rates is directly related to; Extent and effect of taxation, Effect of
taxation on incentives to work.

24. PROBLEM - 13: INFLATION
COUNTRY % OF RESPONDENT
TUNISIA 25.0
LESOTHO 23.5
MALI 20.9
Tunisia, Lesotho, and Mali are the
most affected by Inflation.
Inflation is directly related to; National savings rate, % GDP, Inflation %
change, Interest rate spread, Government debt, % GDP.
PROBLEM - 14: POOR PUBLIC HEALTH
COUNTRY % OF RESPONDENT
TUNISIA 26.9
LESOTHO 24.4
MALI 21.0
Tunisia, Lesotho, and Mali are the
most affected by Poor public health.
Poor public health is directly related to; Business impact of malaria, Malaria cases, Business
impact of tuberculosis, Tuberculosis incidence, Business impact of HIV/AIDS, HIV prevalence,
Infant mortality, Life expectancy.

25. PROBLEM - 15: RESTRICTIVE LABOR REGULATIONS
COUNTRY % OF RESPONDENT
TUNISIA 23.4
LESOTHO 22.7
MALI 20.7
Tunisia, Lesotho, and Mali are the
most affected by Restrictive labor
regulations.
Restrictive labor regulations is directly related to; Hiring and firing practices, Pay and
productivity, Country capacity to retain talent, Country capacity to attract talent,
Cooperation in labor-employer relations.
PROBLEM - 16: INSUFFICIENT CAPACITY TO INNOVATE
COUNTRY % OF RESPONDENT
TANZANIA 20.5
KENYA 19.0
SOUTH A. 18.1
Tanzania, Kenya, and South Africa are
the most affected by Insufficient
capacity to innovate.
Insufficient capacity to innovate is directly related to; Capacity for innovation, Quality of scientific research
institutions, Company spending on R&D, University-industry collaboration in R&D, Gov’t procurement of advanced
tech products, Availability of scientists and engineers, Utility patents per million population.

26. THE MOST PROBLEMATIC FACTOR
FOR DOING BUSINESS IN AFRICA
IS?

27. ACCESS TO
FINANCING

28. FACTORS TOTAL
ACCESS TO FINANCING 1187.9
INADEQUATE SUPPLY OF INFRASTRUCTURE 1154.5
POLICY INSTABILITY 1136.2
CORRUPTION 1119.6
CRIME AND THEFT 1097.3
INEFFICIENT GOVERNMENT BUREAUCRACY 1096.4
FOREIGN CURRENCY REGULATIONS 1092
TAX REGULATIONS 1087.9
INADEQUATELY EDUCATED WORKFORCE 1085.4
POOR WORK ETHIC IN NATIONAL LABOR FORCE 1081.3
GOVERNMENT INSTABILITY/COUPS 1074.5
TAX RATES 1066.4
INFLATION 1064.2
POOR PUBLIC HEALTH 1058.4
RESTRICTIVE LABOR REGULATIONS 1022
INSUFFICIENT CAPACITY TO INNOVATE 474.4

29. Data Source:
- The Global Competitiveness Report 2009-2010 to 2014–2015
Analysis by: Wale Micaiah
e: walegate@yahoo.com
m: 08078001800
w: www.walemicaiah.com
w: www.statisense.com
Freely share, freely use and freely acknowledge the source – © Wale Micaiah