Regulation in Africa Needs Help

I’m increasingly worried about the negative effects of regulation on startups in Africa.  Regulation is best done with a light touch, and laid out in a consistent framework.  While Africa is celebrated for it’s diversity, that shouldn’t extend to a diversity of regulation.  The continent will be much better placed to launch multi-billion dollar companies if those companies can offer their products across different countries without having to change the product or structure of their agreements in each country.  In order for a company in Africa to launch a product that could reach a market size equivalent to the size of America’s (300 million +), they would need regulatory approval in three different countries.  Those countries are Nigeria (173 million), Ethiopia (99 million), and Democratic Republic of Congo (77 million).  (Excluding Egypt, who doesn’t help much on regulation either).  None of those countries are particularly renowned for their ease of doing business, and none of them make it into the top 40% of countries that are welcoming to business.  The DRC is top ten worst, Nigeria 21st worst, and Ethiopia 31st worst.  It doesn’t get scarier than that. Startups don’t want to mess around with that quagmire.  If aid organizations are serious about developing African businesses and African’s skills, they should look to influence a better regulatory framework across the continent.  It will have a much bigger impact than any other program.

 

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