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 Algeria Burkina Faso Congo Cote d’Ivoire Egypt Ethiopia Gabon Ghana Guinea Kenya Lesotho Mali Mauritius Namibia Niger Nigeria Tanzania Uganda South Africa Swaziland Zambia

Conduciveness of Policies to Investment and Growth PolicyIncentive/AdequateInadequate/Disincentive Fiscal policy Monetary policy Income/Wage policy Trade policy Education and skills development policy % of Respondents

Conduciveness of Policy Environment to Industrialisation and SMEs % of Respondents

Tax Rates Tax Range (%)% of Respondents Personal Income TaxCorporate Income Tax Minimum Rate less or equal to more than Maximum Rate 15 to more than

Special Corporate Tax Rate Examples of activities/sectors: Farming Mining EPZ Manufacturing Global Business (Offshore) % of Respondents

Access to Credit % of Respondents

Interest on Loans % of Respondents

Central Bank and Inflation Rates Rate (%)% of Respondents Central Bank RateInflation Rate Less or equal to to more than 1030

Incentives for Domestic Enterprises to Invest NoneLowModerateHigh In the economy In specific sectors In SMEs % of Respondents

Incentives for Foreign Direct Investment % of Respondents

Incentives for Exports NoneLowModerateHigh To African countries To other countries % of Respondents

Regional Groupings CEEAC CEDEAO CEMAC COMESA EAC ECOWAS IOR-ARC IGAD SADC SACU 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 AdequateInadequate Roads Energy Communications50.0 % of Respondents

Is Bureaucracy a Constraint to Business? % of Respondents

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