The Cost of Starting a Business in Africa

Business Financing, a UK business finance and lending research and information website publisher, made an analysis of costs of starting a business in the various countries in the world with the aim of providing guidance to entrepreneurs looking to expand their business abroad.

The analysis is based on the elaboration of data extracted by the Doing Business 2020 report, the flagship publication of the World Bank that provides an assessment of the regulations that enhance business activity and those that constrain it, with quantitative indicators on business regulations and the protection of property rights across 190 economies in the world.

In Africa, results show that costs, on average, are quite high compared with other regions in the world, as the Continent is characterized by the biggest cost differences for starting a business, compared to the level of wages.

These fees, which include licenses, permits, approvals, inscriptions and other procedures needed for establishing a business, reach for instance 2,322 USD in Equatorial Guinea, the most expensive country in Africa where to start a business, while the most business-friendly country is Rwanda, where establishing a business is free, but only for 2 years.

The Republic of Congo is considered in the analysis as the least affordable country in the world, where starting a new business attracts fees for a total of 1,232 USD, while the monthly wage level is only 48 USD, leaving the affordability of starting a new business at 2,554%, meaning that start-up fees are out of reach for most of local entrepreneurs. A similar disparity exists in the Central African Republic, Chad, and Mali.