investment, export and growth in africa findings from a survey of african employers’ organisations
TRANSCRIPT
Investment, Export and Growth in Africa
Findings from a Survey of African Employers’ Organisations
ABOUT THE SURVEY
Assessment of the conduciveness of policies and business conditions for the promotion of investment, export and growth in Africa
Survey of Business Africa member organisations
Responses from 21 countries
Conducted between September and November 2012
Survey Respondents
AlgeriaBurkina FasoCongoCote d’IvoireEgyptEthiopiaGabonGhanaGuinea KenyaLesotho
MaliMauritiusNamibiaNigerNigeriaTanzaniaUgandaSouth AfricaSwazilandZambia
Conduciveness of Policies to Investment and Growth
Policy Incentive/Adequate Inadequate/Disincentive
Fiscal policy 55.0 45.0
Monetary policy 70.0 30.0
Income/Wage policy 65.0 35.0
Trade policy 47.4 52.6
Education and skills development policy 15.0 85.0
% of Respondents
Conduciveness of Policy Environment to Industrialisation and SMEs
% of Respondents
Yes No0
10
20
30
40
50
60
40
60
45
55
Industrialisation SME development
%
Tax Rates
Tax Range (%) % of Respondents
Personal Income Tax Corporate Income Tax
Minimum Rate
less or equal to15 72.2 38.9
more than 15 27.8 61.1
Maximum Rate
15 to 25 29.4 26.7
more than 25 70.6 73.3
Special Corporate Tax Rate
Examples of activities/sectors: Farming Mining EPZ Manufacturing Global Business (Offshore)
% of Respondents
60%40%
Yes No
Access to Credit
% of Respondents
Easy
Difficult
Very Difficult
0 10 20 30 40 50 60
20
60
20
%
Interest on Loans
% of Respondents
Low
Reasonable
High
Very high
0 10 20 30 40 50 60 70
5.3
21.1
68.4
5.3
%
Central Bank and Inflation Rates
Rate (%) % of Respondents
Central Bank Rate Inflation Rate
Less or equal to 5 35 30
6 to 10 35 40
more than 10 30 30
Incentives for Domestic Enterprises to Invest
None Low Moderate High
In the economy 5.0 30.0 60.0 5.0
In specific sectors - 15.0 65.0 20.0
In SMEs 15.0 30.0 45.0 10.0
% of Respondents
Incentives for Foreign Direct Investment
% of Respondents
None
Low
Moderate
High
0 10 20 30 40 50 60 70 80
5
5
75
15
%
Incentives for Exports
None Low Moderate High
To African countries 15.0 45.0 25.0 15.0
To other countries 15.8 36.8 26.3 21.1
% of Respondents
Regional GroupingsCEEAC
CEDEAOCEMAC
COMESAEAC
ECOWASIOR-ARC
IGADSADCSACU
UEMOA
Main African Export• Food & Live Animals
– Agricultural products– Tea– Coffee– Cocoa– Sugar– Tobacco– Cattle– Fish and fish preparations– Wine– Canned fruits– Water
• Manufactured Goods– Textile, articles of apparel and clothing
accessories– Industrial goods
• Crude Materials, Chemicals & Metals– Timber– Rubber– Cotton– Gold– Copper– Platinum– Uranium– Diamond– Cobalt– Gas– Minerals– Hides/skin– Petroleum– Oil– Building materials
Constraints to Export• Erosion of trade preferences• Distance from main markets - transport cost• Lack of skilled labour• Competition from low cost producers• High cost of labour• Low productivity• Exchange rate fluctuations• Delays at ports/customs clearances• Lack of appropriate infrastructures• Market knowledge and information
Constraints to Export• Lack of export promotion policies• High taxes/tariffs• Administrative constraints• Government regulations• Absence of market knowledge/information• Supply side constraints/ low productive capacity• Lack of business opportunity• Lack of export finance• Lack of value added and quality products• Rules of origin• Certification and standards
Constraints to Intra-African Trade• Tariff & Non-tariff barriers• Customs regulation and procedures• Inadequate Trade related infrastructures• Poor quality products/standards• Poor logistics• Lack of conducive institutional framework and
business environment• Lack of proper legal/regulatory frameworks• Inadequate trade and investment policies• Lack of openness to movement of goods, capital
and people
Constraints to Intra-African Trade• Lack of trade finance and export credit• Financial constraints• Low financial sector development• Low productive capacity and competiveness• Lack of supply incentives• Convertibility of currency• Competition from China and India• Lack of skills • Lack of export/investment promotions• Similarity of products/lack of product
diversification
Investment in Infrastructure
Adequate Inadequate
Roads 45.0 55.0
Energy 25.0 75.0
Communications 50.0 50.0
% of Respondents
Is Bureaucracy a Constraint to Business?
% of Respondents
45%
55%
Important Very important
Other Major Constraints to Business ( % of Respondents)
Access to finance 63.2
Cost of finance 57.9
Lack of skilled labour 47.4
Customs and trade procedures/regulations 42.1
Cost of IT and telecommunication services 36.8
Tax administration and regulations 36.8
Poor ethics in the labour force 31.6
Tax rates 31.6
Legal environment 31.6
Labour regulations 31.6
Public infrastructure 26.3
Practices of competitors in the informal sector 21.1
Business licensing and permits 21.1
Conclusion
• Macroeconomic management in many African economies has improved over the past decade
• But deeper reforms are required to– improve the business environment– stimulate, investment and trade– enhance productivity and competitiveness– sustain growth and development