International Business Machines

A.) Business Climate

South Africa
Recently, South Africa has seen rapid increases in both inbound and outbound Foreign Direct Investment (FDI). The
United States is the largest portfolio investor in South Africa and the second largest source of foreign direct
investment (FDI) in South Africa, after the U.K. (Total U.S. FDI is $5.7 billion with total portfolio investment in South
Africa at the end of 2008 amounting to $41 billion.)
Ghana
The Government of Ghana recognizes that attracting foreign direct investment requires an enabling legal
environment. The Government passed laws to encourage foreign investment and replaced regulations perceived as
unfriendly to investors. The Ghana Investment Promotion Center (GIPC) Act, 1994 (Act 478), governs investment in
all sectors of the economy except minerals and mining, oil and gas, and the free zones. Sector-specific laws further
regulate banking, non-banking financial institutions, insurance, fishing, securities, telecommunications, energy, and
real estate. Foreign investors are required to satisfy the provisions of the investment act as well as the provisions of
sector-specific laws. In general, the GIPC has streamlined procedures and reduced delays.

Nigeria
Nigeria is Africa's most populous nation with an estimated population of over 150 million. It offers investors abundant
natural resources, a low-cost labor pool, and potentially the largest domestic market in sub-Saharan Africa. Despite
these advantages, much of that market potential remains unrealized. Impediments to investment include delays in the
passage of announced legislative reforms and the drafting of related implementing regulations, an inefficient property
registration system, restrictive trade policies, inadequate infrastructure, arbitrary policy changes, an inconsistent
regulatory environment, a slow and ineffective judicial system, unreliable dispute resolution mechanisms, and
corruption.

Kenya
Kenya has enjoyed a long history of economic leadership in East Africa as the largest and most advanced economy
in the region. However, ethnically-charged post-election violence in January-February 2008, which left 1,200 dead
and 500,000 displaced, put an abrupt halt to robust growth and raised security concerns about Kenyas investment
climate. The tourism industry was especially hard hit by the violence, falling 33 percent in arrivals and 19 percent in
earnings, while agriculture suffered a $300 million loss in assets due to wanton destruction of farms and dairies. Both
tourism and agriculture have rebounded, with tourism growing at its highest level ever and expectations of more than
 1.8 million arrivals in 2010. The peaceful and historic August 2010 referendum, which approved a new constitution by
a two-thirds majority, breathes hope into Kenya's future prospects.
Morocco
Morocco actively encourages foreign investment and has sought to facilitate it through macro- economic policies,
trade liberalization, and structural reforms. The U.S. Free Trade Agreement (FTA) and the Association Agreement
with the EU have led Morocco to reduce its tariffs on imports from the U.S. and EU. Morocco has also signed a
quadrilateral FTA with Tunisia, Egypt and Jordan, and a bilateral FTA with Turkey. Additionally, it is seeking trade and
investment accords with other African, Asian and Latin American countries.
Egypt
The Egyptian government has made increasing foreign investment a major economic goal. Egypt has embarked on
an extensive reform program aimed at bringing the country in line with international investment standards and tripling
the annual amount of foreign investment it attracts over the next three years. The government hopes to position
Egypt as one of the most attractive investment destinations among emerging market economies.
Tunisia
The Tunisian Government actively encourages and places a priority on attracting foreign direct investment (FDI) in
key industry sectors, such as call centers, electronics manufacturing, aerospace and aeronautics, automotive parts,
and textile manufacturing. The government encourages export-oriented FDI and screens any potential FDI to
minimize the impact of the investment on domestic competitors and employment.
Algeria
Algeria, with its population of nearly 36 million, its energy wealth, and growing demand for modern infrastructure and
consumer products, has begun attracting interest from companies around the world. Despite the international
financial crisis, U.S. firms continue to consider Algeria as an emerging export market that is expected to grow in 2011.
However, the climate for U.S. firms considering direct investments in Algeria has worsened, particularly in the wake of
a series of restrictive foreign investment rules enacted in 2009 and 2010. Algeria's inability to move forward with WTO
accession or modernize its banking sector has prevented significant foreign investment outside the energy sector.
Angola
Angola offers both high returns and great risks to investors and exporters. The oil and diamond industries and
intensive infrastructure rebuilding following the end of civil war in 2002 create business opportunities, and future
opportunities may develop in new areas such as agriculture. From 2004 to 2008, the Angolan economy had double
digit growth rates, but the global financial crisis slowed the economy to near-zero growth in 2009, and an estimated
2.5 percent in 2010. The IMF forecasts an increase to 7.5 percent growth in 2011. The business environment remains
one of the most difficult in the world. Investors must factor in pervasive corruption, an underdeveloped financial
system, poor infrastructure and extremely high on-the-ground costs. Surface transportation inside the country is slow
and expensive, while bureaucracy and port inefficiencies complicate imports and raise costs.
Senegal
Senegal offers investors a relatively stable political environment, democratic institutions, two-day business
registration, a relatively robust telecommunications infrastructure, an advantageous geographic location, a major sea
port, non-stop flights from the U.S., a bilateral investment treaty with the United States, a stable regional currency
(pegged to the Euro), easy repatriation of capital and income, and abundant semi-skilled and unskilled human
resources. Despite these obvious strengths, overly rigid and demanding labor laws, high factor costs, lack of clear
title to property outside the greater Dakar area, an inefficient and inconsistent judiciary, and constraints in obtaining
long-term credits from commercial banks have restrained private foreign and domestic investment. Judicial, tax,
customs, and regulatory decisions are frequently slow to be issued, influenced by political considerations, and non-
transparent.

Weight
Weigh Ratin ed
ts g Score
Opportunities:
1.) Continued geographic expansion 0.02 2 0.04
2.) Lower overhead costs 0.02 3 0.06
3.) Lower labor costs 0.1 4 0.4
4.) Low cost of land 0.03 4 0.12
5.) Digital transformation/Diversified computer industry 0.13 4 0.52
6.) African trade barriers are falling and intra-African trade
holds enormous potential 0.09 3 0.27
7.) Harnessing solar technology 0.07 3 0.21

Weight Ratin Weighted

s g Score
Threats:
1.) Inadequate macroeconomic frameworks and
irrelevant approaches to structural adjustment. 0.05 2 0.1
2.) Inadequate infrastructural and human capital 0.04 4 0.16
3.) Deteriorating economic and social conditions 0.08 2 0.16
4.) Lack of political stability 0.06 1 0.06
5.) Low rates of return on investment 0.07 3 0.21
6.) Chronic shortage of foreign exchange 0.02 1 0.02
7.) Domestic and external debt burden 0.03 2 0.06
8.) Inefficient financial sectors 0.08 3 0.24
9.) Inefficient domestic resource mobilization 0.11 2 0.22
Total 1 2.85
 Fiscal
Political Freedo business
Stability m Freedom Rankin
(40%) (30%) (30%) Total g

Sout
h
Afric
a 9 3 8 6.9 2

Ghan
a 10 6 5 7.3 1

Niger
ia 1 8 2 3.4 10

Keny
a 4 5 3 4 9

Moro
cco 5 2 9 5.3 7

Egyp
t 2 10 6 5.6 5

Tunis
ia 6 4 10 6.6 3

Alger
ia 3 7 7 5.4 6

Ango
la 7 9 1 5.8 4

Sene
gal 8 1 4 4.7 8
Sources:

http://www.africaneconomicoutlook.org/en/countries

https://www.africanexponent.com/post/8081-best-countries-to-do-business-in-africa-
2017

http://www.theglobaleconomy.com/rankings/wb_political_stability/

https://www.state.gov/e/eb/rls/othr/ics/2011/157283.htm

http://www.heritage.org/Index/pdf/2011/Index2011_Full.pdf

https://www.state.gov/e/eb/rls/othr/ics/2011/