SISAF 444 Africa Studies Seminar

1. Winter 2007 SISAF 444 Africa Studies Seminar Enterprise and Business

2. Top ten countries by GDP

3. Top ten countries by GDP Average for Sub-Saharan Africa

4. Top ten countries by population

5. Top ten countries by population Average for Sub-Saharan Africa

6. Source: Heritage Foundation

7. Doing Business • On average, it takes a business in a rich nation six procedures, 8 percent of income per capita, and 27 days to get started • In a poor or lower-middle-income economy, the same process takes 11 procedures, 122 percent of income per capita, and 59 days. • In more than a dozen poor countries, registering a new business takes more than 100 days World Bank, Doing Business 2005

13. Doing Business … in Africa (2006) World Bank http://www.doingbusiness.org/documents/2006-Sub_Saharan.pdf

14. Doing Business … in Africa

15. Doing Business … in Africa

16. Doing Business … in Africa

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19. Doing Business … in Africa

20. Doing Business … in Africa Ease of hiring, flexibility of working hours, ease of firing

21. Doing Business … in Africa

22. Doing Business … in Africa

23. Doing Business … in Africa

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25. Doing Business … in Africa

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27. Doing Business … in Africa

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29. Doing Business … in Africa

30. Doing Business … in Africa

31. Doing Business … in Africa

32. Doing Business … in Africa

33. Doing Business … in Africa

34. Doing Business … in Africa

35. “Improving the Investment Climate”

36. “Improving the Investment Climate”

37. Mbeki 2005:“The Fundamental Problem” “The enormous power imbalance between the political elite and key private-sector producers” “Structural powerlessness of producers and their inability to retain and control their savings”

38. Mbeki 2005:“What Africa Needs” • New financial institutions • The power of private ownership • Reduce rent-seeking and gvt. monopsony • Protecting the rights of private-sector producers (agriculture/industry/services)

39. Formal and informal sectors: three cases • Marginal informality • Widespread informality • Dominant informality

40. Formal and informal sectors: three cases • Marginal informality: In developed countries informal sector “free-rides” on a well-functioning and well-regulated market economy

41. Formal and informal sectors: three cases • Widespread informality: An ‘exclusive state’ limits enforcement of economic rights, low transaction costs for elite sectors and insiders, and high transaction costs for the informal sector

42. Formal and informal sectors: three cases • Dominant informality: Complete‘marketization of the state’, formal sector is marginalized or disappears, a ‘roadblock state’ means that long-term investments become impossible, the state approaches failure.

43. Dominant informality…and the ‘marketization of the state’ “Everything is for sale, everything is bought in our country. And in this traffic, holding any slice of public power constitutes a veritable exchange instrument, convertible into illicit acquisition of money or other goods” Joseph Mobutu, President of Zaire

44. Dominant informality…and state failure Stephen Ellis, The Roots of African Corruption(Current History, May 2006)

45. Formal and informal sectors: three cases • Marginal informality: Developed countries, informal sector “free-rides” of well-functioning and regulated market economy • Widespread informality: ‘exclusive state’ limits enforcement to elite sectors and insiders, high transaction costs for informal sector • Dominant informality: ‘marketization of the state’, formal sector is marginalized or disappears

46. Regulatory intent ≠ Regulatory power

47. Regulation and Civil Society

48. A Simple Model of Governance

49. Doing Business … in Africa