Today in Africa, some economies are struggling to adjust to a changing global economic landscape or appear more focused on internal political battles than a few years ago. Investors have taken note, and as a result, we are seeing more caution.
Yet below the surface are encouraging trends that demonstrate that African policymakers haven’t lost their focus on making Africa economies more attractive for business to spur more rapid growth and development.
Africa at frontier of global change for investorsThe World Bank Group released its flagship Doing Business 2018 report that shows a second straight record year for reforms in sub-Saharan Africa.
Eighty-three reforms implemented last year are making it easier to do business in 36 (three quarters) of the region’s economies. No region has ever reported as many changes in a single year with sub-Saharan Africa accounting for nearly a third of all reforms globally.
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The region is well represented in this year’s global top 10 improvers, based on reforms undertaken, with Malawi; Nigeria; and Zambia. But they are hardly alone. Along with Nigeria, Benin, Cabo Verde, the Democratic Republic of Congo, Gabon, Ghana, Niger, and the Seychelles increased the transparency of dealing with construction permits by publishing regulations related to construction online.
Angola also made dealing with construction permits easier and less time-consuming by improving its system for building permit applications.
Kenya implemented the most reforms in the region in the past year, with six. Four other economies – Mauritania, Nigeria, Rwanda and Senegal – implemented five reforms each during the past year.
Mauritius, already the region’s top-ranked economy at 25th globally, carried out four reforms. Mauritius is followed by Rwanda (41), and Kenya (80) as the region’s top ranked economies.
The results reported last week add to several years of progress that are producing tangible long-term improvements to the region’s business climate. In 2003, for example, it took 61 days on average to start a business in the region. Today, it takes 24 days, compared with a global average of 20 days.
Reform expertise and commitment is gaining momentum that show in this year’s Doing Business. Rwanda and Zambia have become the second easiest places in the world to register property, while it is easier to get credit in only five countries compared with Malawi.
Mauritius leads in other areas, and is now among the top ten countries globally which deals with construction permits and paying taxes.
Africa is becoming quite good at reforming.
Enabling Africa’s expansion
The efforts mustn’t stop. Africa is facing daunting challenges that can be opportunities for investors if the conditions are right. Africa accounts for less than one per cent of the world’s industrial production, while 650 million Africans do not have access to electricity, 350 million lack clean water, and less than one per cent have access to broadband service.
Africa has the largest bank of uncultivated land in the world, yet it imports $35 billion of food each year.
The theme for this year’s Doing Business is timely: Reforming to Create Jobs. With the world’s youngest and fastest growing population, more than ever, Africa requires vibrant businesses that globally account for 90 per cent of job creation. Fair, efficient, and transparent rules for businesses make it possible for the best managed companies to thrive.
With its unique financial and technological capacity and ability to innovate, the private sector is often best placed to address development challenges and create jobs and other opportunities in Africa.
Continued reform momentum indicates that Africa's policymakers continue to recognise the need to encourage private capital. the World Groupis also adjusting to recognise the enormous need to mobilise capital on a new scale fr development.
Working across the world bank group and with private partners,IFC is focused on mobilising finance for development to help countries fund more projects.
"We are pursuing private sector solutions where they can help achieve development goals, and working together with other development finance institutions to ensure that scarce public finance is deployed where it is needed most."
Today's Doing Business results demonstrates the growing consensus for mobilising private capital on a much greater scale for Africa's development.
The continued momentum for making it easier to do business in Africa is worth celebrating.
The writer is the IFC Regional Director for the sub-Saharan