Some smaller African nations are becoming more business-friendly

By Conrad Onyango, bird story agency

Smaller African nations are racing to develop business-friendly policies and economic reforms to bolster their investor attractiveness.

Smaller African economies have begun flaunting their colours, particularly in the form of economic reforms and business-friendly policies as they vie for a greater share of inbound investment.

A new global index, shows seven low and lower-middle-income countries in the continent are among 10 with the most improved investment climates in the world – climbing the index by as much as 21 positions.

“The 10 countries that gained the most positions are all low-income and lower-middle-income countries from sub-Saharan Africa and Latin America,” according to the index.

Among the seven African countries, Burkina Faso, improved the most in rankings, from position 143 in 2021 to its current 122, according to Milken Institute’s Global Opportunity Index 2022: White Paper.

Burkina Faso had its best scores in Institutional Frameworks – supporting business activities (109), conforming to international standards and policy (112) and positive economic fundamentals including workforce talent and potential for future innovation and development.

Malawi (103), Lesotho (105), Angola (125) and Chad (126) – all improved their ranks with each climbing 19 positions in 2022.

Angola and Burkina Faso defied the pandemic to record improvements in the economic performance metric by 0.47 and 0.34 respectively.

It was not clear what impact a recent coup in Burkina Faso might have on the index rankings.

“Of all the subcategories in the index, Economic Performance is the most suited to reflect the immediate effects of the pandemic, as it includes measures of unemployment, interest rates, and GDP growth,” says the authors of the index.

Both Mali (123) and Mauritania (124) also showed their attractiveness to investors, rising 16 positions in the global ranking.

Mauritius (36), South Africa (52) and Rwanda (72) remained the most attractive investment destinations in Africa.

Rwanda also recorded the biggest improvement in the Business Perception element of the index, rising by 20 positions to 52, thanks to a significant improvement in the ease of solving business disputes.

South Africa made a significant jump in Economic Fundamentals – the measure of macroeconomic outlook, workforce talent and potential for future innovation and development.

/bird story agency