Top 20 best African countries to start a business.
Everyone wants wealth and riches and it has been well established that this can’t be gotten by white-collar jobs or salary earning.
That’s why business is considered the most reliable source of income.
If you are looking for the best African countries to do business, then keep on reading
Business mostly deals with the buying and selling of goods or provision of service and we all know that people are always in need of a particular good or service every day.
Taking Africa as a case study, there are tons of businesses that are highly lucrative and profitable that we can venture to and in my subsequent post about business, I always lay much emphasis on the advantages of venturing into business not with the mindset of making money but the mindset of solving people’s problem.
Knowing what your environment, state, country, continent, and world needs will help you to know the kind of business that you can venture into. let’s say in your community, people do travel to a very long distance before they could get foodstuffs and provision, then the opportunity has come to you.
All you have to do is get capital and start shopping the goods from that far distance to your community and people who need the provision so badly will have no choice but to come to you.
In this article, I will be discussing the Top 20 best African countries to start a business considering the following criteria;
-Their currency values
-Their economic structure.
This tiny island country has one of the smallest market sizes on the continent, which means some investors tend to ignore it.
However, the state has consistently ranked higher than other African countries in ease of doing business.
It currently ranks 20th in the world bank’s ease of doing business index.
Mauritius’ stable political system, liberal financial sector, and low taxes which encourage business formation have made it an ideal environment for investors who prefer a business-friendly and less risky investment environment.
Mauritius signed a full free trade agreement (FTA) with China last year – Africa’s first formal FTA with China – and has expressed an interest in becoming a transshipment and financial hub on China’s Maritime Silk Road trade route. Mauritius has already agreed on a formal trade agreement with three African trade blocs — Common Market for Eastern and Southern Africa, Southern African Development Community, and the East African Community.
Rwanda is one of Africa’s fastest-growing economies with growth averaging more than 6 percent every year since the turn of the century.
Last year, it recorded the most business reforms in the region. The world bank says it has “carried out the most reforms since the inception of Doing Business 16 years ago.”
One major point of improvement pointed out in the world bank’s Doing Business 2019 is the ease of starting a business in Rwanda.
It has replaced its bureaucratic structures with an electronic system. Last year, it replaced its stifling special billing machine system for value-added tax invoices with free software that allows taxpayers to issue value-added tax invoices from any printer.
Also, the country is only second to New Zealand in the ease of property registration in the world.
Morocco is not only famous for its vibrant culture, superb cuisine, and awe-inspiring landscape but also its friendly business environment.
The greatly enhanced operating environment has served Morocco well to become a favorable position as a financial hub and platform from which European countries can access the African market.
Between 2011 and 2019, Morocco climbed from 114th place to 60th place in the Ease of Doing Business ranking, indicating sustained improvements to the business climate.
The country was one of the world’s best performers in the areas of Getting Credit and Starting a Business, according to the world bank.
In just two years, the country has moved 31 spots in the overall Doing Business ranking.
One major reform the government initiated was the introduction of a new law that improved the ease of accessing credit for businesses.
The Kenyan government has also been collaborating with IBM to develop technological solutions for its agencies that have since resulted in making registration of property easier by introducing an online system to pay fees and obtain digital certificates
5. South Africa
Africa’s second-largest economy is one of the easiest places to do business on the continent with advanced legal and financial structures.
However, Africa’s most industrialized economy has been struggling to grow until it eventually plunged into a recession in the second quarter of 2018.
The euphoria from Ramaphosa’s ambitious statements on reforms to rescue the economy has since cleared off.
This landlocked country of over 100 million people in the Horn of Africa is transforming itself into Africa’s manufacturing hub.
The Ethiopian government is luring investments with tax incentives, infrastructure investment, and cheap labor.
Industrial parks construction is also part of the government’s plan.
It already has six industrial parks and still looks to set up nine more across the country in the coming years.
Since the smooth transition to the Nana Akufo-Addo government in 2016, the government has promoted private sector-led growth to revive the non-oil and non-agricultural sectors.
Commodities including oil, gold, and cocoa have been the mainstay of Ghana’s $47 billion economy.
The rapid economic growth it has also enjoyed over the last few years have been closely linked to oil since it became a producer in 2010.
Ghana has been under the watchful eye of the IMF since the $918 million credit deal agreed in 2015.
The current program is to end in 2018. The government says it’s working hard to build a resilient and robust economy to avoid a return to the IMF for a financial bailout.
The world bank’s doing business report says Ghana had further simplified the process of importing.
It now has a paperless customs clearance processing system.
Botswana is one of the best-performing economies of Africa.
It does not have foreign exchange controls and it is a low tax regime. These are strong general reasons motivating investors to invest in Botswana.
It is borders South Africa, a channel or conduit to do business with the rest of Southern Africa.
Botswana is a regional hub. Botswana is a regional financial services center.
Botswana Government lays emphasis on export promotion.
These are strong marketing reasons to invest in Botswana.
Botswana has a tradition to welcome foreigners and foreign investment. Besides Botswana is politically a very stable country.
Botswana’s investor friendliness and political stability attract investors to live peacefully in Botswana.
Botswana Innovation Hub, power generation, transnational transport corridor network, tourism sector, and consulting / professional services sector offers good opportunities to invest in Botswana.
Biotechnology, Energy and Environment, Information and Communication Technology, and Mining Technologies are four sectors currently receiving the greatest focus from Botswana Innovation Hub.
Food processing, Leather products manufacturing, Container glass, and other silica-related industries, Pharmaceuticals, Vegetable production using greenhouses and hydroponics, Dairy farming, Hatchery, Livestock production, and feedlots, infrastructure development, development of commercial, industrial, and hotel property – these sectors provide great investment opportunities.
Togo stands out from the crowd in the latest “Doing Business“ ranking. For the second year in a row, the country is among the ten economies that improved the most.
Moving up from rank 156 (2018) to rank 97 (2020), Togo became the best-performing West African country.
The country implemented reforms making it easier to start a business and access credit and electricity.
It also lowered fees for construction permits and streamlined property registration procedures.
Nigeria was also among the top ten business climate improvers, notably thanks to improved contract enforcement. Chad, Mauritania, Niger, Senegal, and Togo improved access to credit information.
Since it gained independence in 1976, the country’s economy has steadily grown, making it one of the major financial hubs of Africa. It has now become one of the most popular places for offshore incorporation.
Incorporating your business in another country can have a number of benefits. In Seychelles, the financial services sector is the pillar of the economy, offering offshore banking services, offshore companies registration, registration of investment funds and insurance companies, and more.
Since 2002, Namibia has been rated according to the World Economic Forum (WEF), the Swiss-based membership organization funded by 1,000 of the world’s largest companies, as part of its influential World Competitiveness Report. Countries are rated according to the Global Competitiveness Index (GCI) based on a wide range of indicators.
Namibia now finds itself ranked 90th out of 148 countries. In Sub-Saharan Africa, the WEF now ranks Namibia sixth below Mauritius (45th), South Africa (53rd), Rwanda (66th), Botswana (74th).
Malawi is one of the countries which is ranked high by the world bank doing business index.
It is easy to register and start a business in Malawi for both citizens and foreign investors.
The business environment is good because among other reasons Malawi is one of the most peaceful countries in the world.
There is more freedom for people to do business in this country.
13. Ivory coast
Ivory Coast, which has one of the fastest-growing economies on the continent, has been named the top destination for investment in West Africa.
Ivory Coast economy is mainly dependent on agriculture. It is the world’s largest producer and exporter of cocoa beans and a significant producer and exporter of coffee and palm oil.
It is also one of the three bigger producers and exporters of cashew.
Agriculture is estimated to contribute about 20% of GDP and employs about 48% of the country’s workforce.
Ivory Coast is also rich in mineral resources with abundant deposits of hydrocarbons, ore (gold, copper, iron, manganese, bauxite).
There have been increased activities in the oil sector recently and some mining activities, particularly of precious minerals, such as gold and diamonds, but also others like nickel.
Real GDP expanded 6.8% & 6.9% in 2018 & 2019 resp having recorded 8.1% compounded annual GDP growth in the past 5 years. Ivory Coast growth prospects remain positive.
Djibouti is a small African Country located in the Horn of Africa.
It is in a very strategic position, between the Indian Ocean and the Red Sea.
It seems very small on the map, but it is not a micro-state like Vatican City. The area of Djibouti is similar to Macedonia or Israel ones, and the coasts are 300km long
The population is about 900.000 inhabitants, and 70% of them are located in Djibouti City (the capital).
The 2019 Index of Economic Freedom ranked Uganda, the 8th freest economy out of the 47 Sub-Saharan African countries with a score of 59.7.
The business operating environment allows the full repatriation of profits after the mandatory taxes have been paid, as well as 100% foreign ownership of private investments.
The incentive regime is structurally embedded in the country’s tax laws making them non-discriminatory and accessible to both domestic and foreign investment depending on the sector and level of investment.
Uganda’s labor is highly trainable, English speaking, and the cost compares favorably in Africa.
Senegal’s prospects are relatively positive, and its economic policy is moving towards liberalization and privatization.
Government and foreign donors are working hard to achieve the goals of sustainable growth and poverty reduction.
Lesotho is a small, mountainous, and landlocked country, surrounded by its much larger neighbor, South Africa. It has a population of about 2.1 million, and a nominal gross domestic product (GDP) per capita of $1,118.
The World Bank classifies Lesotho as a lower-middle-income country. It is mostly highlands, with its lowest point being 1,400 meters above sea level.
Swaziland is ranked 121 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings.
The rank of Swaziland deteriorated to 121 in 2019 from 117 in 2018.
Tunisia is at the crossroads of Europe, the Middle East, and Africa.
By its central Mediterranean position, its competitiveness and growth, and its preferential treaties with numerous partner countries, Tunisia offers access to numerous markets for companies that desire to develop their activities.
Investment is free for nationals and foreigners in many economic sectors.
A foreign investor can hold up to 100% of project equity without prior authorization in most sectors.
Some non-exporting services must be authorized when foreigners hold the majority of shares.
Foreigners investing in agriculture can hold up to 66% of companies’ capital. Agricultural land can be farmed under long-term leases.
Though still a developing country, Zambia is one of the African nations that have a fast-growing economy that is very friendly with a vast number of businesses.
To further enhance the country’s development, the government of Zambia has stipulated very entrepreneur-friendly policies.
This is to encourage entrepreneurs and investors to explore the various business sectors in the country.
If you have plans of starting a business in any African country, then you can consider the above countries.