10 African Countries Where It’s Really Hard to be an Entrepreneur

Africa, a continent rich with diversity and potential, has a pulsating entrepreneurial spirit. However, this spirit meets some web of challenges in several African countries. These challenges are tides of political unrest, economic instability, and formidable business landscapes. The journey of an entrepreneur in such territories might be marked by resilience as they navigate through uncharted waters of stringent regulations and scarce resources. 

The potential for innovation and growth in these nations is immense, yet shackled by the prevailing constraints. This article will highlight some African countries with challenges that make it hard for entrepreneurs to strive.

Eritrea

Eritrea’s entrepreneurs face a daunting array of challenges, grappling with the scarcity of hard currency and frequent electricity interruptions that disrupt essential operations. Beyond these economic and infrastructural obstacles, a pivotal challenge is the nation’s political climate. Eritrea’s authoritarian government and stringent policies cast shadows over entrepreneurial endeavors, earning it a ranking among the world’s worst for political freedom and human rights. 

The confluence of economic hardship and political constraints creates a turbulent terrain for Eritrean entrepreneurs, who continue their arduous journey with resilience, aspiring to usher in innovation and growth in unyielding circumstances.

Somalia

In Somalia, a land marred by decades of conflict and clan warfare following the government’s collapse in 1991, the journey of entrepreneurship is exceptionally tumultuous. Despite the persistent instability, the Federal Government of Somalia (FGS) is ardently welcoming foreign direct investment, presenting myriad opportunities, particularly in the domains of natural resources and agriculture. 

However, the issues of a fractured government and protracted conflict render Somalia a challenging environment for conducting business. Entrepreneurs here face the formidable task of navigating through lingering unrest and instability, endeavoring to leverage the available opportunities to catalyze development and progress.

South Sudan

South Sudan, an African nation steeped in civil conflict and marked by infrastructural deficiencies, poses a formidable environment for business endeavors. While the government openly welcomes foreign investment, entrepreneurs, and investors, they tread carefully and are mindful of the reputational, economic, and legal risks linked to associations with government officials.

Widespread corruption, lack of transparency, poor financial management, and precarious security conditions further intensify the complexities of conducting business in this region. In this daunting landscape, individuals and enterprises strive to forge ahead, wary of the intricate nexus of challenges that pervade the business ecosystem in South Sudan.

Libya

In Libya, the endeavor to conduct business as an entrepreneur is met with profound uncertainty due to the unavailability of crucial financial information and an unpredictable legal system. These elements combine to create an intricate and challenging business landscape, that entrepreneurs find exceedingly difficult to navigate. This unpredictability and lack of transparency severely impede the ability to make informed decisions and assessments, casting a shadow over entrepreneurial aspirations and endeavors in the country.

Burundi

Burundi’s business climate is tough due to its agriculture-based economy with negative growth. The absence of basic infrastructure and a largely poor, rural population make things even harder. Starting a new business here is expensive, and there are too many administrative and legal requirements. All these, mixed with political unrest, make starting and running a business in Burundi very challenging and almost prohibitive for many entrepreneurs.

The economic activity in Burundi continues to be delicate and susceptible to unexpected events. It is predicted that the GDP will see an upward movement, reaching 2.9% growth in 2023, an improvement from 1.8% in 2022. 

Chad

As one of the African countries, Chad presents the epitome of high-risk business climates. The absence of accessible financial information and an erratic legal system make establishing and operating a business in this country a daunting venture. For aspiring entrepreneurs, the inherent challenges and unpredictabilities within the legal and financial landscapes pose severe impediments, rendering entrepreneurial pursuits in Chad extremely intricate and risky.

Sudan

As an African country in North Africa, Sudan has a lot of land good for farming and is close to rich countries around the Persian Gulf. It could be a great place for growing food for the region. However, doing business there is tough. People who want to start businesses face many problems like getting credit, finding supplies, and using old farming methods. These problems make it hard for an entrepreneur in Sudan to use its land to its full potential and make business difficult.

Zimbabwe

Zimbabwe has been making some progress in becoming a better place for business. It ranked 140 out of 190 in the World Bank Ease of Doing Business report in 2020, which is better than its rank of 155 in 2019. However, it’s still facing a lot of challenges. It is 124th out of 137 in the Global Competitiveness Index, even falling below the average for Sub-Saharan Africa. So, while there are improvements, starting a business there is still pretty tough.

Central African Republic

The Central African Republic is a tough place to do business. The absence of reliable financial information and an unstable legal system make starting and running a business here extremely difficult for an average entrepreneur. These challenges create an environment of uncertainty, making it hard for entrepreneurs to establish and operate businesses effectively in the country.

Democratic Republic of the Congo (DRC)

As one of the African Countries, the business environment in the Democratic Republic of the Congo (DRC) is fraught with substantial challenges, reflecting decades of hardship. An average entrepreneur here confronts poor infrastructure, a taxing system that seems more predatory than supportive, and pervasive corruption. 

These long-standing issues, including widespread corruption and inadequate electricity coverage, create a daunting landscape for businesses, making the act of establishing and maintaining a venture in the DRC a continuous uphill battle.