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Last Updated: Monday, 13 February 2006, 13:52 GMT
How easy is it to do business?
business woman
According to the World Bank, African nations make it harder for entrepreneurs to succeed than other parts of the world, so why is it so difficult to start a business in Africa?

For example if you want to start a business in Mozambique, it takes 153 days to register a business, with a total of 14 separate steps.

But it isn't always so long-winded. Rwanda was singled out as among the biggest reformers in the past year.

Are you trying to start a business? What problems are you currently facing? How do you maintain a successful business? Is it more difficult if you are a woman?

Please send your business queries using the form. The African trading specialist, Luyton Driman will answer them in a special African business Q&A web feature.

This debate is now closed. Thank you for your comments.


Your comments:

If you are part of the government or if you support the government it is very easy to make business and become rich with in a short period of time.
Yonas, Addis Ababa, Ethiopia

I had to bribe several people to speed up the process.
Osengo Kapita, Kinshasa

In the Congo, people from the Congolese diaspora are willing to go back to setup businesses but bureaucracy and corruption is stopping them. M I went back to Kinshasa to register a company; it took me about three months to succeed. I had to bribe several people to speed up the process. To get a single piece of paper can take a week and you need around 16 of them. I'm not even talking about the money I spent... How can we expect to develop our country, our continent in these conditions?.
Osengo Kapita, Kinshasa, DR Congo

The Nigerian government is really kill entrepreneurship. They are not encouraging them, but they discourage it with all forms of taxes. In Port Harcourt, regardless of the size of a business the owner pays not less than fifteen different forms of direct taxes, which end up in the private pockets of individuals.
Pascal Maduekwe, Bournemouth, UK

It would be easy to make business on the African continent if not for the nepotism, corruption and bribery which make it hard to make any development projects
Michael Kayongo, Brisbane, Australia

Means of communication in Africa is still primitive. Doing business without easy access to telephone, internet could be daunting. In Ghana one has to wait for more than a year before being connected to a telephone line. It is therefore not easy to use credit cards or transact business by phone.
Gideon CWECU, Reading, UK

Nigeria has the highest return on investments in the world
Tony, USA
While agreeing with all points made, may I say that Nigeria remains a very attractive and fertile investment for the daring. It has been proven that Nigeria has the highest return on investments in the world. Everywhere you look in Nigeria, you see countless business opportunities. Why do you think the Indians, Lebanese, Chinese, and other nationals are settling in the thousands in Nigeria? They have certainly seen something which we as Nigerians have refused to see either due to our short-sightedness, lack of imagination or get-rich-quick attitude.
Tony, New Brunswick, NJ, USA

Dealing with competition is natural, anywhere. In RSA, it has been made very easy to start a business with the view of fostering more self employment. Access to money is key, hence the importance for micro-lending and orientation on how to go about things like tax filing, name registration etc. Its actually very easy in SA and anyone will tell you, the doors are wide open to anyone with an idea and a will to make it happen!
Brian Joubert, Pretoria, South Africa

Business owners are forced to declare false turnover and earnings bringing about corruption
Israel Ambe Ayongwa, Bamenda

Crippling taxes in Cameroon do not favour business to take place effectively. Perpetual tax hikes are a stumbling block to business growth and with this, business owners are forced to declare false turnover and earnings bringing about corruption.
Israel Ambe Ayongwa, Bamenda, Cameroon

It is very difficult in Zambia to do business because the government have not put in place incentives to promote small entrepreneurs such as loans.
Lifuna, Lusaka, Zambia

There are two major problems with business in Africa: Money and money! You can't get money to start and when you do start, your customers can't get money to pay you!
Ambrose Nwadike, Amsterdam, Holland

Entrepreneurs face the most hurdles in Africa for a simple reason: The regulator (or government official) asks the same question: What's in it for me (not for the nation)?
Edward Kutsoati, Ghana

Turnover is slow since the existing businessmen are trying to meet the exuberant taxes by increasing prices
Clive, Cameroon

Starting or doing business in most African countries is almost similar to going to hell or even developing high blood pressure. There are not good areas for investment. Most African countries like Cameroon levy high taxes on business, as a result rendering the atmosphere very unfavourable for business take off. It is hell to think of doing business in Cameroon. Turnover is slow since the existing businessmen are trying to meet the exuberant taxes by increasing prices. It is harder to succeed in clean business in Africa. In effect black marketing is seriously in existence.
Clive Ayumbi Wankah, Buea, Cameroon

Here in Malawi, it is very difficult to register a business due to cumbersome procedures, you move from one office to another, moreover once you register you have a punishment of paying heavy taxes. So here we prefer to operate without registration.
Allanie Njateni, Dowa, Malawi

Trying to create a successful business in East Africa is a daunting task
James Boorman, Nairobi
Trying to create a successful business in East Africa is a daunting task. I launched a company in Nairobi three years ago and have faced many obstacles including competitors using corrupt methods to try and destroy my business. However, while these corrupt opportunities to destroy other people's lives are available in Kenya I have also discovered that it is possible to seek and receive justice without having to resort to corrupt practices. If justice is possible investments will eventually thrive
James Boorman, Nairobi, Kenya

The biggest hindrance to investing in Africa is luck of security. You can have all the infrastructure and necessary equipment in place but as you can enjoy the your investments .The lack of basic infrastructure can be tolerated and investors are willing to improve these as their business grows, after all there is always no big competition when you invest in Africa, which always guarantees maximum profits.
WS, London, UK

I have been trying to do business in Nigeria for the past three years, and it is impossible. The government says one thing and the civil servants say a different thing. The system does not have any physical structures in place to follow-up on procedures, policies, regulations and laws. African countries also need to train and re-train civil servants and policy makers. There is abject ignorance in the civil service and its structure. Finally, African population must be political and economical aware of their communities so that their leaders can be held accountable.
Ovie Mukoro Okpodu, Vancouver, Canada

Trying to open a business in Nigeria? Talk about an elephant passing through the eye of a needle. Corrupt government officials and insecurity is the order of the day. Maybe the present government will turn things around, only time will tell.
Ieanyi Ede, Maryland, USA

I think Ethiopia must be the best and the easiest place to start a business today. Yes it used to be very hard to start a business in Ethiopia. I was in Ethiopia last year and I was pleasantly surprised how quickly they processed my application for registration. It took me only a day. I know some people will be unhappy by my comment. I think regardless what we think of the current government, we must be honest enough to give credit when a credit is due.
Bedellu, Australia

NGOs and a good number of donors have offered generous assistance to southern Sudanese who want to start running businesses in the their young nation, southern Sudan, but infrastructure is the biggest problem because there are no roads, electricity, running water and many other basic needs. Landmines are also still a big problem.
Peter Tuach, Minnesota, USA

The most serious of all is whether you can share the vision with your employees and partners
George Ochieng, Kenya/UK

The biggest problem are corruption, bureaucratic bottlenecks. But the most serious of all is whether you can share the vision with your employees and partners. In some countries starting a business means you have money to spare and therefore everybody will want their share of the capital. Of the profits, you'll be lucky if you get there!
George Ochieng, Kenya/UK

In a country like Cameroon where business is the main occupation for many people even graduates. We foreigners found corruption as a passport to allow us to do business, but big businesses dealers are suffering.
Arnaud Ntirenganya, Rwanda/Cameroon

In general, I think it is very hard to do business in Africa because of how corrupted and unstable most African countries are, and I don't blame people for not investing in Africa. The people that I blame the government, all they care about is their own selfish interest. Politicians in Africa are into power for one reason, that is for themselves.
Anonymous, Lagos, Nigeria

Kenya and several other African countries have made great strides in simplifying their business registration processes. This is commendable against the backdrop of massive bureaucracy and the general lack of coordinated inter-departmental communication. Unfortunately, many government processes are still exercises in 'paper pushing'. Only heavy investment in ICT will allow for African governments to streamline, coordinate and thus simplify their processes. Rwanda and South Africa are great examples of this.
Mullei, Atlanta, USA

I am in the process of investing and setting up a new business in Nigeria, I am in total agreement of the previous comment. However one have to take a strategic market entry and operation decisions, based on the business vision and the risk assessment of the operating environment. If we don't have confidence in ourselves or our market, how do we then encourage foreign investment? The foreign investors are interested in capital projects, the SME (Small to Medium Enterprise) have to be developed by the indigenes business people.
Adams Dauda, London, UK

As a small import business owner I am experiencing the gap that exists between the Western world and the way us Africans do business. The lack of understanding of Trade Fairs, AGOA regulations, Fair trade and the importance of advertising one's business before making a trip for Trade Shows is extremely important. Again it goes back to educating the business owners in various African countries and showing the gap that exists and needs to be bridged. Which cost a lot of money and I hope foundations will fund it besides USAID
Wossene, Bloomfield, NJ/Ethiopia

It is an uphill battle trying to start a business in Africa
Omorodion Osula, USA

It is an uphill battle trying to start a business in Africa. The policies and procedures are just too cumbersome. You will spend almost half of your capital to bribe officials in order to get the necessary documentation. Getting a loan from the bank is another chapter entirely. Their interest rate and collateral are way too much. It is time for African governments to review their requirements in order to make it easier for prospective business entrepreneurs set up businesses. The bureaucracy should be reduced.
Omorodion Osula, Boston, USA

In a country like Cameroon, besides the complicated administrative bottlenecks, the fiscal policy makes it even more difficult. Taxes are on a steady increase and the cost of living too, without a corresponding increase in revenues. The price of basic goods and services are almost unaffordable to the majority who live below the poverty line, and the turn-over in business is relative slow. Most people do business today not because they make profits but because they want to keep themselves busy.
Julius Atia, Yaounde, Cameroon

Nigerians in the diaspora wishing to invest in Nigeria are discouraged by several factors. First there is the self preservation factor. No investor wants to lose their life to armed robbers. Then, bureaucratic bottlenecks in Lagos and Abuja makes it difficult to get the relevant licences. Consider the epileptic power supply and other dilapidated or non existent infrastructures, and finally the corruption factor. Politicians and Civil Servants are more interested in what they can extort from you rather than what you are trying to do for your country.
Anthony Okosun, Baltimore,USA.

While this might be a little off "doing business" and more about just investment (as mentioned by Anthony Okosun) I would advice that people dispel the myths they hold. Investment in Nigeria might not be as easy as giving buy-sell directives to your stockbroker by email, but the Nigerian Stock Exchange is modern enough and a quick internet search would provide you with stockbrokers that allow online trading on the NSE. No Nigerian abroad has an excuse for not investing on the stock market.
Sijuwade Salami, Montreal, Canada

As much as I appreciate Sijuwade Salami's very brilliant rejoinder to my comment, may I alert by way of an addendum that anyone advising would be investors in the Nigeria Stock Exchange Market to link up with stock traders on the internet must also add a caveat: Watch against the antics, tricks and electronic dummy sales of Nigerian internet fraudsters, popularly known as 419ers.(419 is the section of the Nigeria Criminal Code applicable in the southern states of Nigeria as amended in the various states that defines and punishes the offence of obtaining money and or goods under false pretences.)
Anthony Okosun, Baltimore, USA

Starting a business in Nigeria is bedevilled with the twin problems of infrastructural decay and corruption. The lack of basic infrastructure means that the entrepreneur needs a lot of working capital to buy and run an electricity generator, sink a borehole for water, hire private security, and sometimes repair roads. In spite of all these, he is expected to pay all kinds of obnoxious taxes.
Kingsley Ezenekwe, Lagos Nigeria





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