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AFRICAN ISSUES
scope of the World Bank’s ease of doing
business criteria.
Logistics of doing business
Businesses also face big shortcomings
in what Greg Nott, head of global law
firm Norton Rose Fulbright’s Africa
practice, terms the ‘logistics of doing
business’. Some would seem simple to
overcome, among them visa requirements
for business travel. “Visas represent a
very real constraint on doing business in
Africa,” he tells Strategic Marketing Africa.
Air travel connectivity within Africa is
also challenging. “It limits business travel
to usually no more than two countries a
week,” explains Engelbrecht.
At the heart of the problem is
protection of state-owned domestic
carriers. “There is a lack of political will
to work towards an open skies policy,”
according to Otto de Vries, CEO of
the Association of Southern African
Travel Agents.
Benefits of an African open skies
policy would be immense. Reflecting this
is a 2015 study by the International Air
Transport Association (IATA) covering 12
countries including Nigeria, Egypt, South
Africa, Angola, Ethiopia, Ghana and Kenya.
Liberalisation would, notes IATA,
lead to an 81% increase in traffic flows
between the 12 countries within two
to three years, generate an additional
US$1,3-billion in annual GDP and create
155 000 new jobs. Airfares between the
12 countries would fall by between 25%
and 37%. Ocean Marketing Association (IOMA).
Businesses operating in Africa also face
challenges on the ground. Among them,
says Nott, is traffic congestion in major
business centres such as Nairobi, Lagos
and Luanda. “There is a huge accessibility
problem,” he stresses. For example, it can
take up to four hours to travel the 14km
between Nairobi’s airport and its CBD.
Road and rail
Moving goods across Africa is also a
major business constraint. Other than
in Southern and North Africa, vastly
inadequate rail capacity has placed
the burden on a far from satisfactory
intercontinental road system.
22 strategicmarketingafrica Issue 4 2016
Airport in Dar es Salaam, Tanzania. An ‘open skies’ policy in
more African countries would improve ease of doing business
Africa is paying the price. According
to the African Development Bank Group,
transport costs in many parts of the
continent increase the prices of goods
by up to 75%.
Why Mauritius?
The question most African countries must
ask is: what makes Mauritius so successful?
Nott sums it up: “It is political will to the issue of building and land use permits,
make Mauritius a world class business-
friendly country. It has filtered down to the around property development schemes.
country’s citizens, who are determined to
keep that profile and improve on it.”
The island nation has already achieved
huge success in developing itself as an
international financial services hub. As a
measure of this success, the Mauritius
International Financial Services Centre is
one of only five in the world to be awarded
‘white list’ status by the Organisation for
Economic Cooperation and Development
(OECD) for achieving the highest
standards demanded.
Another big drawcard is a business-
friendly tax regime. “For individuals and
local companies the tax rate is a flat 15%,
while for global companies the tax rate
ranges from zero to 3%,” says Peter Searra,
owner of a distribution firm on the island.
Searra is also a director of the Indian
In Mauritius, the association’s aim is
to provide 60 000 small- and medium-
size businesses with marketing skills
needed to take them into export markets,
says Searra.
Business travel is
impacted by poor
air links in Africa
Mauritius’ government continues PHOTOS: ISTOCKPHOTO, GETTY/GALLO IMAGES
to forge ahead with policies aimed at
enhancing the country’s business-friendly
regulations. Among measures announced
in the 2016 national budget is accelerating
as well as the removal of constraints
The government is also implementing
an open skies policy for airlines.
Morocco looks abroad
However, Mauritius is not the only
African country striving to increase its
attractiveness to foreign investors. Among
countries pulling out the stops is Morocco
in North Africa.
The country’s efforts began in earnest
in 2006, when it signed an open skies
treaty with the European Union. Results
have been exceptional, with traffic
between Morocco and the EU growing
122% between 2005 and 2015, to a total
of 12-million passengers. This growth is
almost double the 66,8% rise in global
passenger traffic reported by IATA during
the same period.
Morocco’s Minister of Industry, Trade
and New Technologies, Abdelkader
Amara, has emphasised that the country is
aggressively positioning itself as an African