Africa: Cannot be serious?

Africa: Cannot be serious?

Many African economies are among the best improvers in the World Bank’s latest Doing Business survey, but deeds do not seem to be aligned with words yet. The improvement of Nigeria’s ranking (131st) is strong and mainly driven by a global rank of 15 on the “getting credit” item. However, the access to credit is very poor in the economy and the recent easing of monetary policy did not translate into credit growth. This “getting credit” item also shows other surprising results, such as the 4th rank of Zambia, a country that is over-indebted (public debt should reach 87% of GDP next year). Obviously, some reforms have been implemented well, e.g. in Morocco which is now ranked 53rd. Yet, the growth impact has been quite low and insolvencies grew by +9% y/y in H1 2019 while, more generally, the payoff of reforms decreased, given the global trade recession observed in 2019. Togo’s improvement was strong (+40 ranks to 97th). The country is a good example of broad-based reforms and infrastructure building, which have been helping to create a trade hub.