Every business, tech startups included, has four objectives: To make a profit, to expand, to provide a service and to survive. These objectives are not equal and the importance of each one varies from time to time depending on the circumstances that the business finds itself in.
Currently, owing to the liquidity crunch we are currently facing in this country, liquidity (which has a bearing on the business’s ability to survive for the foreseeable future) has taken a whole new meaning. But the question remains just how difficult it is currently to do business in Zimbabwe?
According to the Mo Ibrahim Index for 2014 which was recently published, Zimbabwe is the 46th easiest country to do business on the continent out of the 52 countries participating. Conversely Zimbabwe is the 7th hardest country to do business in on the continent. This is a minor improvement from last years rank of 47 out of 52.
The Index, which is published yearly by the Mo Ibrahim Foundation (which was founded in 2007 by the Sudanese tech Mogul Mo Ibrahim) bravely attempts to come up with a way to quantify the qualitative problems that face businesses in each country on the continent.
The Index measures Governance which is defined as the provision of the political, social and economic goods that a citizen has the right to expect from his or her state, and that a state has the responsibility to deliver to its citizens. In short it informs on the government’s role in supporting and regulating businesses.
Some of the Countries on the Index and their ranks
Meaning, Value and validity
The index looks at four things:
- Safety and Rule of law for which Zimbabwe: has a score of 37/100 and rank of 45/52 which is fair considering the amount of bribes we have to pay to local enforcement.
- Rule of Law- we are ranked 42.
- Accountability- we are ranked 44
- Personal Safety- we are ranked 48
- National Security- We are ranked 30
While it is undoubtedly true that it is easier to do business in, say, South Africa than Zimbabwe due to various reasons none of which is governance, one is left wondering how it is possible than Libya is ranked higher than Zimbabwe in all these areas despite the anarchy and chaos that is going on over there.
The Hodgepodge of data is not only a little vaguely defined but the according of rank itself is a little dubious despite the claim that it is obtained by combining over 100 variables from more than 30 independent African and global sources.
How can Egypt be ranked higher than us in terms of Security and Stability when they have just had a coup and change governments faster than we do our clothes?
In my opinion although the Mo Ibrahim Index is at times useful and helpful about the only validity it has is that it is backed by a billionaire. Tech start ups on the continent can use it to compare hardship stories on Facebook and Twitter and nothing else.
Technology businesses are mushrooming everywhere in Africa. May those in diaspora please shed some light on the issue: Which is the easiest country to do business in on the continent? If you had your pick where would you go to form your tech start up?
Image Credit: Starrfmonline
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