Africa's Private Sector: What's Wrong with the Business Environment and What to Do About It

Manju Kedia Shah
March 20, 2009

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An essential read for all struggling with the challenge of stimulating private sector–led growth in Africa. Vijaya Ramachandran and her co-authors provide the right big picture for the donor community, with a sharp focus on the most important constraints to growth and the right solutions.
Jeri Jensen, Managing Director for Private Sector Initiatives, U.S. Millennium Challenge Corp.

This book is a breath of fresh air that should be read by all development economists and policymakers.
Guy Pfeffermann, former Chief Economist, International Finance Corp. (World Bank)

Why is the private sector yet to take off in much of sub-Saharan Africa? Drawing on a unique set of enterprise surveys, Vijaya Ramachandran and her co-authors identify the biggest obstacles: inadequate infrastructure (especially unreliable electricity and crumbling roads) and burdensome regulations. They then show how ethnic minorities dominate the private sector in many countries, inhibiting competition and demands for a better business environment, and thus impeding the emergence of an entrepreneurial middle class.

Based on this careful diagnosis, the authors suggest investing in infrastructure and reforming regulations to lower the cost of doing business, and increasing the access to education for would-be entrepreneurs to help foster the emergence of a broader-based business class that crosses ethnic divides.

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