Before expanding into African markets, global businesses must conduct detailed research to determine which markets offer the most favourable conditions that match their expansion objectives. And for most international companies, the relative ease of doing business in Africa is a powerful instrument for assessing which country will serve as their next best global frontier.
Thus, gathering data from the World Bank’s 2020 Doing Business Report, we will review what makes Africa’s most business-friendly countries attractive for international expansion.
Ease of Doing Business In Africa – Market #5: Tunisia
Although Tunisia – often regarded as the birthplace of the Arab Spring – has witnessed episodes of political instability in recent years, it still ranks high as a destination of choice for global expansion. Tunisia ranks #5 in terms of Ease of Doing Business in Africa, and it’s not difficult to see why.
Starting a business in Tunisia has become easier following the country’s move to reduce business fees while merging more services into a one-stop-shop.
Businesses that require property registration will find their business set-up to have become faster since Tunisia streamlined the internal processes for transferring property. But that’s not all; there has also been an increase in the transparency of land administration after the government started publishing statistics tracking property transactions at its Land Registry.
Thus, it is not only getting easier to do business in Tunisia; you also get a sense of confidence knowing that the government seems propped to easing business operations in the country. And that support is especially crucial for global businesses seeking a new destination.
Ease of Doing Business In Africa – Market #4: Kenya
Kenya has recently been making waves for being one of the top three countries leading the fintech scene in Africa – a testament to the abundant talent (amongst other strengths) that the country of 53 million people boasts. But there are other reasons why Kenya deserves all of the attention it’s getting.
The World Bank report notes that Kenya strengthened minority investor protections by requiring shareholders to approve the election and dismissal of an external auditor. The country also eased paying taxes by implementing an online filing and payment system for social security contributions.
But there’s more, Kenya has made resolving insolvency easier by improving the continuation of a debtor’s business during insolvency proceedings. In addition, the country improved the reliability of electricity supply by modernizing its existing infrastructure and by inaugurating a new substation in the capital, Nairobi.
These well-executed policies by the Kenyan government are why Kenya leads the continent in protecting minority investors and providing credit to start a business. Moreover, in resolving insolvency, the country only ranks second behind Mauritius. These factors thus, make Kenya a premier location for global expansion.
Good Read: Top Reasons You Must Offshore to Africa
Ease of Doing Business In Africa – Market #3: Morocco
Morocco claims the #3 spot on the Ease of Doing Business ranking in Africa. Morocco is also the highest-ranking North-African country in the World Bank Report, improving seven places since 2018. So, it’s easy to understand why global businesses are attracted to the country.
Morocco made trading across borders faster by introducing e-payment of port fees, streamlining paperless customs clearance, and extending port hours of operation. The country also made paying taxes less costly by reducing the corporate income tax rate.
Morocco also made getting electricity easier by generalizing online applications for new connections and expanding prebuilt transformers. In addition, dealing with construction permits has also become easier since the country improved its online platform and further streamlined the process, making it possible to apply for and obtain certificates of conformity online.
With all these, it’s no wonder that Morocco is genuinely a top contender and a preferred choice for international business expansion.
Ease of Doing Business In Africa – Market #2: Rwanda
Compared to other African markets, Rwanda leads across the board for registering property and getting credit and is second only to Mauritius in enforcing contracts. These are amongst the many factors that make Rwanda another destination of choice for international businesses.
The World Bank Doing Business report notes that the country now exempts newly formed small and medium-size enterprises from paying the trading license tax within their first two years of operation. This is a boon as it gives more room for new businesses to break even before worrying about another government overhead.
Access to electricity is now more stable than ever since Rwanda improved the reliability of power supply by upgrading its power grid infrastructure. In addition, businesses requiring water for their operations now have faster access to this raw material since the country reduced the time it takes to obtain a water and sewage connection.
This, in turn, has made dealing with construction permits faster in Rwanda.
Ease of Doing Business In Africa – Market #1: Mauritius
Mauritius ranks #13 globally in the Ease of Doing Business report by the World Bank. And this is particularly impressive considering it ranks above more developed countries like France, China, Australia, Germany, Canada, Spain, Japan, Russia, etc.
The country cliches the top spot for Ease of Doing business in Africa, and its giant strides over the years testify to why it is most deserving of this.
Recently, Mauritius’ dedication to easing business within its borders has seen it make property registration faster by making it easier to check for encumbrances. The country has also improved the quality of its land administration system by publishing official service standards and court statistics on land disputes.
Mauritius – which leads Africa in enforcing contracts – made enforcing contracts easier by publishing performance measurement reports for the commercial division of its Supreme Court. The country, also #1 in Africa for resolving insolvency, improved the continuation of a debtor’s business during insolvency proceedings.
Simplify Your Global Expansion with an Experienced Partner
When it comes to the ease of doing business in Africa, Tunisia, Kenya, Morocco, Rwanda and Mauritius outpace other African markets and are thus the top business-friendly Markets for global companies seeking a new international frontier.
However, no matter how business-friendly these countries maybe, expanding into new African markets is a complex task, requiring the necessary local market expertise to help you hit the ground running.
Leverage African Ally’s expertise and experience to help you navigate the African business terrain without the associated newcomer risks; so you can focus on more strategic functions and activities.
African Ally’s market entry services can help you establish a presence in these top African markets in as little as 48 hours. With capabilities in 19+ African countries and a suite of African expansion services to assist you each step of the way, African Ally can help ensure your first step in widening your African footprint is a steady one.
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