Should you open a business in Africa

Best and worst African countries who enforce business contracts you should learn before you open a business in Africa.

Considering opening a business in Africa? First take into account what would happen if a vendor on African soil decides not to pay you? International business good practices include efficient contract enforcement through the courts in Africa. Mauritius at 72.22% has the best enforcing contract rate while at 28.84% São Tomé and Principe has the worst enforcing contract rate.

Enforcing contracts in Africa looks at the regulatory environment, this is important for firms to operate. Imagine you are a small business and one of your customers decides not to pay you for your goods or service. Well you need that money because you have outstanding debts that you need to repay or maybe you were counting on that money to make your own purchases or investment.

After Colonialism, African Judges Still Wear Blonde Wigs
Judge in South Africa

One of the ways you have to recover that money is to go to the courts but this only makes sense if the courts are efficient and you are going to spend a little time through the court and not pay high costs. More business would be willing to invest more if they have greater confidence in the African court system to recoup money owed.  Efficient contract enforcement is linked with economic development when court systems are efficient and fair.

What is a contract? A contract is a legally enforceable binding document between two or more parties that ties each participant to a written and or verbal agreement creating a legal duty or responsibility. The party that did not breach the contract can ask the court to have the contract cancelled and then sue the breaching party for restitution. All businesses deal with contracts; even if they are unwritten, as with many transactions involving goods or services.

Electronic Business Contracts

In Africa, an enforacable contract is essential to productive economic development and sustained growth. Economic and social progress cannot be achieved without respect for the rule of law and effective protection of rights, both of which require well-functioning courts that resolves cases in a reasonable time and is predictable and accessible.

African economies with more efficient courts, in which courts can effectively enforce contractual obligations, are associated with more rapid growth and overall, enhancing the efficiency of the judicial system can improve the business climate, foster innovation, attract foreign direct investment and secure tax revenues for struggling African economies.

The three best and worst African countries who enforce business contracts.

Best Contract Enforcing Percent Enforced
Mauritius 72.22
Rwanda 69.11
Mauritania 65.98

Worst Contract Enforcing Percent Enforced
São Tomé and Principe 28.84
Central African Republic 31.39
Gabon 32.84

The enforcing business contracts score is calculated by three indicators:

Time to resolve the dispute.

How costly are the court costs including attorney fees.

Quality of the court system.

Complete table of Africa's 54 countries percentage of contract enforcement:

African Country Percent Contracts Enforced
Algeria 54.78
Benin 41.5
Botswana 49.99
Burkina Faso 41.05
Burundi 42.97
Cabo Verde 64.84
Cameroon 39.9
Central African Republic 31.39
Chad 45.51
Dem. Rep. Congo 33.28
Rep. Congo 43.99
Côte d'Ivoire 57.6
Djibouti 48.43
Egypt 39.97
Equatorial Guinea 56.17
Eritrea 55.93
Eswatini 36.72
Ethiopia 62.77
Gabon 32.84
The Gambia 50.88
Ghana 54
Guinea 53.87
Guinea-Bissau 38.61
Kenya 58.27
Lesotho 57.18
Liberia 35.22
Libya 48.41
Madagascar 50.04
Malawi 47.4
Mali 42.8
Mauritania 65.98
Mauritius 72.22
Morocco 63.7
Mozambique 39.78
Namibia 63.44
Niger 54.69
Nigeria 61.46
Rwanda 69.11
São Tomé and Principe 28.84
Senegal 50.61
Seychelles 51.25
Sierra Leone 55.92
South Africa 56.88
Somalia 54.58
South Sudan 58.99
Sudan 47.84
Tanzania 61.66
Togo 49.02
Tunisia 58.41
Uganda 60.6
Zimbabwe 39.6
Zambia 50.82
Chic African Culture and The African Gourmet=


Week’s Best African Culture Posts

African Chicken Fingers with Honey-Mustard Harissa Dipping Sauce

African Pizza: Spicy Chicken Pizza with Pumpkin Fufu Crust

Fat Ways: High Calorie Egusi Soup Recipe

Chia Seed Rolled Dates