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It is a challenge but ease of bussiness is improving

Clearing Agent Joburg
The port of Luanda was highlighted as showing the biggest improvement in productivity for developing countries.

It is becoming easier to do business in Africa – but the challenges that remain still make the effort and risks higher than those for other regions.

On the positive side, 35 of the 47 economies in Sub-Saharan Africa (74%) implemented at least one reform making it easier to do business in the past year. There were 69 reforms in total — up slightly from the annual average of 67 over the past five years, according to the World Bank Doing Business 2017 report.

Sub-Saharan Africa accounted for 14 of the 32 reforms globally in getting credit.

The region is home to five of the 10 top improvers in the 2017 report. These are Uganda, Kenya, Mauritania, Senegal, and Benin.

Seafreight costs are also down. According to the 2016 Review of Maritime Transport the cost of moving a 20-foot container from Shanghai to Durban dropped from US$1 495 in 2009 to US$693 in 2015.

The costs for shipping a container from Shanghai to Lagos reduced from US$2 247 to US$1 449 over the same period.

Involving the private sector in port operations is also paying off.

The Maritime Transport review lists the port of Luanda as showing the biggest improvement in productivity for developing countries at 52%, followed by Tanzania International Container Terminal (37%), DP World Maputo (21%), and the port of Cotonou in Benin (13%). All have private-sector operators.

Parastatal-operated Walvis Bay improved productivity by 6%.

On the negative side, the logistics measure of “Trading across Borders” ranks the region last.

An example cited in the Doing Business report is that completing border compliance procedures takes an African exporter 108 hours and costs US$542 on average, compared with a global average of 64 hours and US$389.

The finding is backed by the 2016 Review of Maritime Transport, which states that land-locked West African states are not benefiting from the competition between the ports of Benin, Côte d’Ivoire, Ghana, Nigeria and Togo.

“Inland transport is expensive, and inefficient border-crossing procedures combined with roadblocks make it difficult to expand the hinterland,” states the report.

These challenges are reflected in the average Ease of Doing Business ranking for Sub-Saharan Africa of 143 out 190, which puts most countries in the region in the bottom quartile.

Mauritius has the region’s highest ranking, at 32. Rwanda has its second highest (62), followed by Botswana (72) and South Africa (73).

Other large economies in the region and their rankings are Kenya (108), Nigeria (169), and Uganda (122)

Those with the region’s lowest rankings are Eritrea (189), South Sudan (187), and the Central African Republic (185).

For exporters and importers looking for reliable gateways the best-connected countries in Africa are Morocco, Egypt and South Africa in Africa, according to the 2016 Review of Maritime Transport.

South Africa’s score on the Liner Shipping Connectivity Index has, however, dropped from 41.41 in 2015 to 37.10 in 2016 – a trend followed by most African countries, with Kenya being an exception. Its score increased from 11.34 to 13.66.