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Economic Climate in the 5 Most Dynamic African Nations

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Economic Climate in the 5 Most Dynamic African Nations

Ethiopia, Côte d’Ivoire, Senegal, Tanzania, and Ghana are among the countries with the fastest economic growth rates in Africa. This situation can be attributed, in part, to the quality of the business environment in these nations.

Business Environment in Ethiopia: An Overview

Ethiopia, a key player in Sub-Saharan Africa, stands out as the second most populous country on the continent, just after Nigeria. With an impressive population of 109 million people, representing 8.7 % of the global population.

In an economic context, the country exhibits a total production estimated at 126 billion USD in 2022, with a per capita GDP reaching 857 USD. Although the GDP growth rate slightly decreased from 5.6 % in 2021 to 5.3 % in 2022, Ethiopia maintains a robust economic momentum.

According to the World Bank’s « Doing Business » report, Ethiopia ranks 159th out of 190 countries, with a score of 48.0 out of 100, providing insight into the ease of doing business in the country.

The most promising indicator lies in the critical first step of any investment project: business startup. Ethiopia stands out with encouraging procedures, manageable time constraints, reasonable costs, and modest initial investment.

Indicators related to administrative procedures, such as construction permits and registrations, closely follow this initial phase. Infrastructures, notably electricity with a score of 60.1 out of 100, contribute to encouraging entrepreneurs.

Conducting Business in Senegal

Senegal emerges as a conducive environment for conducting business in West Africa, sharing borders with Mauritania, Mali, Guinea, and Guinea-Bissau, and having maritime borders with Cape Verde.

By the end of 2022, Senegal’s GDP reached 62 billion USD, ranking 19th in the region. Recording a growth of 4.2 % compared to 2021, Senegal exhibits one of the highest rates in Sub-Saharan Africa, significantly contributing with 12 % to global production.

Ranked 123rd out of 190 countries in the “Doing Business” index, Senegal scores 59.3 out of 100. Its most performing indicators include ease of starting investments, access to credit, international trade capacities, and investor protection. Infrastructures, a major asset in Senegal’s business climate, are reflected in a high score of 65.2 for electricity, with 64 % of the total population having access, surpassing the African average of 43 %. Compared to its neighbors, Senegal excels in various areas, illustrated by an outstanding score of 91.2/100 for ease of starting investments, surpassing the African average of 80.1 %.

Enhancing the Economic Framework in Ghana

Ghana, located in Sub-Saharan Africa, is home to a population of 30 million according to the latest census. Beyond its wealth in natural resources, the country enjoys comparative advantages in digital and technological fields, as evidenced by automobile exports. Economic diversification emerges as a major strength in the Ghanaian economy.

Ghana’s GDP stood at 72.84 billion USD in 2022, contributing 0.03 % to the global economy. Although GDP slightly decreased compared to 2021, where growth reached 5.4 %, production experienced a contraction of 3.3 % in 2022. Nevertheless, Ghana maintains its status among the most performing economies, consistently displaying a robust growth rate. This consistency reinforces Ghana’s reputation as a favorable business destination in Africa.

The business climate in Ghana provides a favorable environment for investors. According to the « Doing Business » report, Ghana ranks 118th with a score of 60.0. Particularly noteworthy in this report is that the variable with the highest score is « investor protection ». This variable is closely followed by ease of procedures to start a business, quality of infrastructure, access to credit, regulations and taxes, international trade with neighboring countries, and contract quality.

Doing Business in Côte d’Ivoire in 2024

Côte d’Ivoire, located in West Africa with a population of 25 million, shares its borders to the west with Liberia and Guinea, to the north with Mali and Burkina Faso, to the east with Ghana, and to the south with the Gulf of Guinea and the Atlantic Ocean.

The Ivorian economy relies mainly on the tertiary sector, contributing 56 % to the GDP. The primary and secondary sectors each contribute 22 %. In 2022, Côte d’Ivoire’s Gross Domestic Product (GDP) reached 70.02 billion USD, with a per capita GDP of 2,272 USD, significantly exceeding the Sub-Saharan African average of 1,690 USD for the same year. Despite the impacts of international events leading to an increase in inflation rates in Africa, Côte d’Ivoire’s GDP recorded a remarkable growth of 6.7 % in 2022, one of the highest rates on the continent.

According to the World Bank, public investment policies implemented by the government were the cornerstone of this economic performance. In the World Bank’s report, Côte d’Ivoire ranks 110th in terms of the business environment, with a score of 60.7.

Business Environment and Investments in Tanzania

Tanzania’s economy stands out as one of the most dynamic in Africa, maintaining an average growth rate of 7 %. The sustained commitment of the private sector constitutes a major pillar of this

growth. In 2022, Tanzania’s Gross Domestic Product (GDP) reached 75.71 billion USD, with an estimated growth of 5.4 % for the year 2023. Per capita GDP stands at 1,192 USD.

The business environment in Tanzania emphasizes job creation, innovation, and competitiveness. The Tanzanian private sector benefits from various sources of funding and expertise, supported by appropriate regulations. Employing approximately 70 % of young workers in Tanzania, the private sector ensures significant independence from public constraints.

In terms of the business climate, Tanzania has an average score of 54.5 and ranks 141st. The most performing indicators include ease of procedures to start a business in the country (74.4), infrastructure such as access to electricity (74.9), contract quality (61.7), and access to credit (65.0).

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