Mauritius is the highest-ranked sub-Saharan African economy overall followed by Rwanda, Kenya and South Africa respectively. Regulatory reforms in Togo and Nigeria have elevated those economies to be among the most improved in the World Bank’s rankings for ease of doing business. Nigeria, which vies with South Africa as the Continent’s biggest economy, rose to 131 from 146 after making improvements in 6 areas. Doing business measures getting a building permit, obtaining an electricity connection, transferring property, getting access to credit, protecting minority investors, paying taxes, engaging in international trade, enforcing contracts and resolving insolvency.
Although the EU is still Africa’s biggest investor and trade partner — its two-way commerce was $300bn in 2018 — it is a bloc of countries rather than an individual power. The 3 individual powers – China, the US and Russia – offer African nations investment opportunities but also pitfalls rooted in their business approaches. The Russian government staged its first-ever Russia-Africa Economic Forum in Sochi, in the hope of increasing its influence on the Continent and tapping into business and investment deals. The 2-day event, co-hosted by Russia and Egypt, aimed at fostering political, economic and cultural cooperation. President Putin pledged to double Africa-Russia trade over 5 years from $20 billion in 2018 and to expand its network of trade missions in Africa
Uganda is quietly mushrooming into a prime investment destination, receiving the most foreign direct investment (FDI) on the Continent in the last 3 years, according to UNCTAD’s World Investment Report. Top sectors for investment in Uganda include energy, construction, infrastructure, agriculture and tourism. The new AfCFTA is making Africa’s Portuguese-speaking countries a hotspot for investor interest. Additionally, new tools such as the Development Finance Compact for Lusophone Africa give investors and lenders more comfort to enter into these markets. The Portuguese speaking countries are determined to increase trade, both among themselves and within their regions, which include Africa’s largest economies. The countries are eyeing the 2019 Africa Investment Forum – the unique investment marketplace for regional investments, pioneered by the African Development Bank last year.
On the other hand, according to Trade20 Index by Standard Chartered, Côte d’Ivoire came first out of 66 countries for having the greatest potential for future growth, Kenya ranked third and Ghana thirteenth, based on metrics such as economic dynamism, trade readiness and export diversity. Researchers found that while existing trade powers like China and India continue rapidly to improve their trade potential, African countries such as Kenya and Côte d’Ivoire have cemented their positions as East and West African trading hubs from a relatively low starting point. Huge investments in infrastructure, ecommerce and ease of doing business have also started paying off in Côte d’Ivoire and Kenya where the business environment has seen a marked improvement.
Surveys by the Global Entrepreneurship Monitor show that decent jobs are so scarce in Africa that many people create their own. One in 3 working-age adults in sub-Saharan Africa either runs a new business or is trying to start one, compared with one in 6 Americans and one in 20 Germans. In Tanzania, informal firms created four-fifths of new non-farm jobs between 2002 and 2012. In my trip to Addis Ababa for the AfriLabs meeting (see below) the Ethiopian taxi app, ZayRide, employs young drivers who supplement their professional work as engineers, pharmacists, accountants, etc