Doing Business in Africa
African Development Bank Group
International Economic Forum of the
Americas (June 7-10, 2010)
Nkosana Moyo, Vice President & COO
AfDB
Outline
1.
The Context: Africa’s Economic Performance
2. Doing Business in Africa
3. Challenges to Doing Business in Africa
4. Africa’s Infrastructure and Energy Opportunities
5. Inga 1: Status Update
1
1. Africa’s Economic Performance
 2001-2008: Buoyant growth (5.6% a year).
 End 2008-Early 2009: Sharp decline (2.9% a year).
 End 2009-2010: Resumed growth (4.5% a year).
 Anticipated increase in aid by 11% (between 2008
and 2010).
2
2.1 Doing Business in Africa
 Political Governance: 33 countries with at least 2
successive elections.
 Telecommunications: mobile subscriber base at 280.7
million people in 2008-to reach 561 million by 2012 .
 Diaspora: Approximately $12 billion remittances to
Sub-Sahara Africa alone in 2007.
 Solid progress in Business environment reforms.
 Mineral Reserves: 30% of the world’s share: Gold
(40%), Cobalt (60%) and PGM(90%).
2.2 Lessons from Africa’s Mobile Phone Usage
• Low income earners prepared to incur high
costs to access mobile phone facilities.
• A huge medium for extending scarce financial
services to rural areas (e.g. Kenya’s M-PESA).
• Government’s play a critical role in
dismantling artificial barriers (e.g. Tanzania).
• A potential avenue for knowledge
management: ‘m-learning’.
2.3 Country Examples of Reforms
• 67 regulatory reforms registered in 29 of the 49 sub-Saharan
African countries.
• Rwanda ranked as the world’s top reformer.
• Liberia, Ethiopia, Ghana and Togo: streamlining of inspection
processes.
• Uganda, Sudan: improved customs processes.
• Cape Verde: improved access to credit information.
• Cameroon: eliminated licence tax for new businesses.
3. Challenges to Doing Business in Africa
• Progress in ‘overall’ ease of Doing Business Rankings remains
slow.
• Power outages among the highest in the World.
• Inland transportation costs higher than other regions.
• Attracting FDI into diversified and higher value-added sectors
still a challenge.
• African firms are some of the most highly taxed in the world.
4. Infrastructure and Energy Opportunities
• Bridging of Africa’s infrastructure gap estimated at
$93 billion a year: with high returns.
• Oil reserves of 117.481 billion barrels in 2007: (9.49
% of the world's total).
• Natural gas reserves of 14.58 trillion cubic metres,
(8.22% of the world total).
• 17 countries in Africa have the largest potential for
solar, wind, hydro, and geothermal energy.
5. Status Update on Inga 1 Project
• Hydropower project co-financed with the World Bank: situated
in the DRC.
• Components: a) Generation; b) Transmission; c) Distribution; d)
Capacity Building and Governance.
• AfDB Grant support totals UA 35.7 Million.
• Rehabilitation of project delayed due to efforts to link
components of Inga 1 and 2.
• Procurement processes currently underway to finalize selection
of companies.
Thank you/Merci