Challenges affecting the success of private businesses in Africa

Entrepreneurship, and for that matter, private sector development, has been identified as an effective way of enhancing economic development and growth on the African continent.

To this end, governments of various countries on the continent have thought it necessary to encourage citizens, both home and abroad, to take advantage of the investment opportunities available in their respective countries to make valuable contributions to national development and growth.

Challenges

In spite of this clarion call, the development of businesses in Africa is saddled with a number of challenges. For instance, policies of governments in many African countries, including Eritrea, Somalia, Libya, South Sudan, Angola, and others, are not private sector friendly. Ever-changing government regulations, use of multiple currencies, as witnessed in Zimbabwe in recent years, and protectionist policies render the costs of imports high on the continent.

Also, the absence of scientific market research data makes the assessment of the retail environment, consumer behaviour and consumer needs pretty difficult. In addition to the foregoing, businesses in Africa are fraught with technology and communication challenges. With the exception of Mauritius with highly sophisticated technological systems, the other economies in Africa are still grappling with improved and effective technology and communication systems delivery. This affects the extent of business development and growth in the implicated economies. Collection of scientific data for analysis is compounded by diversity of African markets and consumers.

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