Business News of Saturday, 6 May 2017
Source: citifmonline.com
2017-05-06
Most governments from 2016 are reported to have increased taxes as a source of raising revenue
The Africa Competitiveness Report 2017, released by the World Economic Forum on Thursday, has identified corruption and lack of access to funding as major problematic factors for doing business in Africa for the 5th consecutive year.
The report also noted that, high tax rates and inefficient government bureaucracy, were among the top problems associated with doing business on the continent.
The report was gathered from an Executive Opinion Survey that took responses from business leaders around the world, to rate the factors they consider most problematic for doing business in the continent.
A study of the data shows that, although high taxes have not been much a problem for business owners in the past, it featured prominently in 2016.
This suggests that, most governments from 2016, increased taxes as a source of raising revenue.
In Ghana for instance, the government introduced taxes including, a 5% tax on real estate sale, which negatively affected many businesses and among other challenges caused the shutdown of some businesses.
According to the African Competitiveness Report, “African competitiveness is still lower than in other regions and convergence has stagnated.
The insufficient progress made by African countries on needed structural reforms during the past decades of sustained growth has put Africa on a weaker footing, less able to respond to a less positive economic outlook going forward and less well-equipped to take advantage of the demographic shifts that will increase the shares of the continent’s young population.”
It indicated that “over the past decades, employment in Africa has not kept up with output expansions.
Now that the continent’s growth prospects have shrunk, many African economies are struggling to provide sufficient job opportunities to meet the needs of the burgeoning workforce.”
While urging leaders of African countries to create sound institutions, adequate infrastructure, and a healthy and educated workforce, the report emphasized the need for African countries to adopt technology.
Meanwhile, Rwanda has been named as the country with Africa’s best performing institutions. It identified Ghana as the country with the 12th best-performing institutions out of the 32 countries assessed.
While the continent’s instructions have generally seen an improvement in service delivery, they are still caught up in widespread cases of corruption.
This has led to a generally slow, expensive and inefficient service delivery.
