Africa’s best country for business

The Economist's Intelligence Unit has released its Business Environment Rankings, looking at which country is likely to be the most business-friendly in the world leading up to 2018.

June 18, 2014 1 Comments
Africa’s best country for business

The Economist’s Intelligence Unit has released its Business Environment Rankings, showing that South Africa is likely to be the most business-friendly country in Africa, leading up to 2018.

The IU’s business rankings model measures the quality or attractiveness of the business environment in 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports.

According to the Economist, it is designed to reflect the main criteria used by companies to formulate their global business strategies, and is based not only on historical conditions but also on expectations about conditions prevailing over the next five years.

Singapore has maintained the top spot in the rankings, having the best environment for businesses to operate, followed by Switzerland and Hong Kong, who also maintain second and third spot in the list.

Top 10 countries for business (scores out of 10)

Country 2009-2013 score
# 2014-2018 score #
Singapore 8.56 1 8.65 1
Switzerland 8.41 2 8.52 2
Hong Kong 8.34 3 8.39 3
Canada 8.15 7 8.30 4
Australia 8.18 5 8.29 5
Sweden 8.20 4 8.26 6
USA 8.02 8 8.25 7
New Zealand 7.99 11 8.18 8
Finland 8.16 6 8.18 8
Denmark 8.01 9 8.16 10

Different regions of the world have been impacted in various ways by the global economic climate since the prior ranking.

European countries are feeling the weight of the debt crisis, which has hit political and economic stability in the region, as well as the availability of finances.

Asia has had mixed fortunes with top-performing countries (Singapore, Hong Kong, Australia and New Zealand) balancing out the low performers (Bangladesh and Pakistan) in the rankings.

The Americas, however, with the USA as the world’s biggest economy, remains “an indispensable business destination”, The Economist said.

Looking at Africa, South Africa ranks as the best market for business – at 54th overall. However, this is down two places from the 2009-2013 report.

According to The Economist, South Africa’s rank slip reflects divisions within the ruling African National Congress, high crime rates (especially for violent crime), deep-seated inequality and strikes and rigid labour laws, it said.

“However, South Africa remains comfortably the best scoring country in SSA,” the group said.

Overall, The Economist Intelligence Unit placed the Middle East and Africa region in the bottom in seven of the ten business environment categories, noting that the region hosts three of the four lowest-ranking countries in the overall rankings: Libya, Iran and Angola.

“Two other Sub-Saharan countries—Kenya and Nigeria—also rank at the lower end of our rankings, held back by the ongoing problems of corruption, weak infrastructure, deteriorating security and, in the case of Nigeria, the absence of effective government institutions,” The Economist said.

Top African countries for business (scores out of 10)

Country 2009-2013 score
# 2014-2018 score
#
South Africa 5.87 52 6.23 54
Morocco 5.05 70 5.49 66
Tunisia 5.17 67 5.47 67
Egypt 5.40 62 5.38 68
Algeria 4.48 75 4.81 75
Nigeria 4.47 76 4.66 76
Kenya 4.23 78 4.63 77
Libya 4.04 80 4.58 79
Angola 3.65 82 4.11 80

Methodology

The ranking examines ten separate criteria or categories, covering over 91 indicators:

  • Political environment;
  • The macroeconomic environment;
  • Market opportunities;
  • Policy towards free enterprise and competition;
  • Policy towards foreign investment;,
  • Foreign trade and exchange controls;
  • Taxes;
  • Financing;
  • The labour market; and
  • Infrastructure.

According to the Economist, almost one-half of the indicators are based on quantitative data (eg GDP growth), and are mostly drawn from national and international statistical sources for the historical period (2009-13) and from Economist Intelligence Unit assessments for the forecast period (2014-18).

The other indicators are qualitative in nature (eg quality of the financial regulatory system), and are drawn from a range of data sources and business surveys adjusted by the Economist Intelligence Unit, for 2009-13, The Economist said.

More on South Africa

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Global investors show confidence in South Africa

South Africa’s massive wage gap

South Africa’s city of opportunity


BusinessTech's Staff Writer is directly plugged into the South African Internet backbone, and spits out press releases and other news as he receives it. He is believed to be close ...
Tags: Business Environment, Economist, Headline, rankings

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Join the Conversation ( 1 comment)
  • Wyzak

    So basically all the African countries improved, except for South Africa and Egypt and we know the crap that has been going on in Egypt…

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