Wednesday, June 06, 2012

Can We Measure The Best Place to Start a Business in Sub Saharan Africa?

Can We Measure The Best Place to Start a Business in Sub Saharan Africa?

The GlobalPost does a nice job taking the data from the World Bank's 2011 survey on the easiest and most difficult countries to do business and putting it into an easily viewed and searched interactive infographic.

According to the data, Mauritius holds the rights to say it is the best place for an entrepreneur to do business in Sub Saharan Africa. The bottom of the list is composed of some of the usual suspects who it seems are often found at the bottom of SSA rank lists: Chad, the Central African Republic and the Democratic Republic of Congo.

On a quick glance of the rankings by category, the fact that trading across borders does not seem to really matter is quite striking. Mauritius has a #1 ranking in this category, but the next three on the overall rank list are in the twenties or higher on the measure. Getting electricity is another one where some with a high rank still make it to the top while others with a better rank in the category do not score as well overall. Naturally, all is not going to be equal, but I would have expected access to electricity and neighboring markets to be pretty important. It is possible that the range is rather close when looking at the actual measured data and the rank does not show the proximity of some nations. This is where inforgraphics tend to fall short.

As is the case with any rank list, one has to ask if it is possible to adequately measure how friendly a given country is to entrepreneurs.

In this case, the focus of the data on cities and established business makes it a bit hard to make the full leap to saying anything with absolute certainty. Even if accepted at face value, the World Bank data tells us the best place to be a middle sized business in an African city. Being that cities do not have a monopoly on entrepreneurship, there are some examples that will be missed in the data. Further, smaller business that can eventually develop into the middle sized group that would make the survey in future years are entirely neglected.

Understandably it is hard to measure these businesses on the scale that is necessary for comparison and it becomes tricky when determining what businesses make the cut, but it would be interesting to see some rough data on start-ups in general. They will face an entirely different set of challenges, (for example accessing capital) that will have a greater or lesser impact as compared to medium and large businesses.

With all that said, the data presented in the link above is worth checking out.

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