Doing Business Rankings - How does Ethiopia Fare?

I’ve often spoken about the challenges of working here. Of building something meaningful. However, not having been in a comparable position in another country, it’s tough to tell how balanced my impressions are. For most of us getting our hands dirty, it’s rare to get a 30,000 ft view for comparison. Thankfully the World Bank does this for us, comparing country-by-country on how places like Ethiopia fare in facilitating business.

When scanning country rankings looking for Ethiopia, I start at the bottom. I just realized this. It’s too bad really, but it’s generally likely to be quicker to start at the bottom and work up. In this case I started at the bottom (DR Congo) and began working up. Past Niger. Past Afghanistan and Haiti. Past Iraq and Senegal. I even stopped a couple times to check that I didn’t miss Ethiopia. Nope. They’re up there at 116th/181. Now this may not seem like much, but consider the significant recent challenges Ethiopia has faced in creating a business-friendly environment: large, subsistence farming population (doubled to 80 million since mid 80s), landlockedness, recent socialist dictatorship and being dead center of a highly unstable/unfriendly corner of the world. Yeah, at 116, they’re doing pretty damn good, higher than countries like Costa Rica (117), Russia (120), Brazil (125) and the Philippines (140). Nice work, Ethiopia.

It seems Ethiopia’s relatively good at providing a tax system (actually true, VAT system functions well and is growing), construction permits (must be, with a recent building boom) and enforcing contracts (tough for me to say, but the level of corruption seems to be low for Africa, and there is a general respect for the law). They rank poorly in property rights (there are none, the government owns all land and provides long term leases), trading partners (not surprising with their neighbours: Kenya - good, Djibouti - good but tiny, Eritrea - draconian enemy, Sudan - we all know Sudan, Somalia - a failed state), and getting credit (young banks, low GDP and a constant foreign currency crisis, I’m not surprised).

I feel this ranking, with some disappointing aspects but generally encouraging, mirrors my experience in making things happen here. We’ve been pleasantly surprised with the ease of common business aspects like registration, immigration, services, etc. The trend is mildly positive for foreign investors. There is abundant labour with ever-increasing skills. But we are also handcuffed by lack of infrastructure, impossible import tariffs (180+% import duty on a car?) and a shifting policy environment.

All in all, I’m a little proud of Ethiopia for ranking 116, and hopeful they can continue to rise up the table, bringing in new investment as they do.

B

Note, thanks to Steve Jackson in Cameroon for getting me thinking about this with this post of frustration.

       

Tagged as: business, ethiopia, world business rankings ethiopia