Worst African Countries To Do Business

Somalia, Eritrea, Libya, South Sudan, and the Central African Republic are the top five worst African countries to do business, according to the World Bank.

And those who have been following political development in these countries may not be surprised considering the fact that the crisis is peculiar to at least four of them.

In the World Bank Group’s Doing Business Report, WBG based its ranking on property registration, how easy it is to get credit, tax policy, foreign direct investment policy and its implementation, and electricity among other indicators that aid the running and management of business.

Popularly known as Ease of Doing Business, 190 economies around the World were accessed based on the implementation of business regulations, while New Zealand was the best country do set up business in the global ranking, Somalia occupied the bottom of the list in the World.

Unlike Mauritius which is No. 1 and top 20 countries to setup business in Africa (which is available at: https://infomediang.com/best-african-countries-to-do-business), Somalia remains the worst environment for business activities on the African continent, a spot it has occupied for three years.

In the West Africa sub-region for instance, Ghana attracts more foreign investors than Nigeria in recent times because of worsening security plus undemocratic tendencies of the most populated countries on the continent.

In the case of Nigeria, some of the businesses that closed shops and set up a new offices in Ghana instead of Nigeria cited several reasons that were mostly outside World Bank indexes.

Worst Ease of Doing Business In Africa 2021

1. Somalia
2. Eritrea
3. Libya
4. South Sudan
5. Central African Republic
6. Congo
7. Chad
8. Republic of Congo
9. Editorial Guinea
10. Angola
11. Liberia
12. Guinea Bissau
13. Sudan
14. Sao Tome and Principe
15. Gabon
16. Cameroon
17. Burundi
18. Sierra Leone
19. Madagascar
20. Comoros

Somalia

With several untapped natural resources that include iron, uranium, copper and iron ore among others, Somalia isn’t only dangerous to do business, it houses one of the most dreaded terrorist groups on the continent, Al-Shabab, causing humanitarian crises.

The country sits on the bottom of the 190 economies ranked by the World Bank Group, a position it has occupied since 2018.

Although Australian and Chinese companies were granted licences to explore some of the natural resources, the insecurity caused by the Al-Shabab extremist group is limiting operations.

Eritrea

Eritrea isn’t friendly for business, its Northeast African country with its unimpressive 1.3% internet users (according to World Bank 2017), also shares borders with other countries that have poor ease of doing business, they include Sudan, Ethiopia, and Djibouti

The country is ranked 189 globally and the second-worst country to set up business in Africa.

Libya

After the revolt that oust and killed its long-time leader Muammar al-Qaddafi on October 20, 2011, Libya has been in turmoil, the weapons in the hands of NTC fighters are being used to commit crimes across the country.

One would have expected the natural gas and gypsum-rich country to be the worst, but it managed to occupy the 186th position among 190 economies in the ease of doing business,.

As we write, there are reports of government officials breaking into foreigners’ homes and throwing them into jail.

South Sudan

Since its breakaway from Sudan in July 9, 2011, political instability has been one of issues affecting economic activities in the East/central African country.

Ranked 185 in the world, South Sudan is the 4th worst country to do business in Africa, the position it has maintained since 2018.

Central African Republic

As the fifth unfriendly country for investment, the Central African Republic is ranked 184 among 190 economies globally.

The crisis which led to Civil War involving the government, rebels from the Séléka coalition, and anti-balaka militias is one of the reasons the country remains unsafe and therefore makes location of industry in the country riskier venture

Other unfriendly investment-destination countries in Africa and their world ranking are:

Wrapping Up

One calamity thing about the data is that Sudan and its brother South Sudan are both not good places to do business. This attests to the political instability in both countries.

Leaders in African countries need to do more in creating an enabling environment for their citizens and foreign investors in order to reduce the level of poverty. Poverty fuels crime.

Paul Biya, the Cameroonian leader, for instance, who has been in power for more than four decades, isn’t doing enough rather than hold unto power while insecurity continues to worsen in the Southern part of the country.