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came next, followed by Nigeria, Kenya, and Ghana. We were also interested in assessing the attractiveness of
doing business in Africa relative to other parts of the world. Participants were asked to compare Africa with growth regions such as Asia, Latin America, and the former Soviet Union. Nearly a third of respondents that did business in Africa indicated that this region was as or more attractive than both Asia and Latin America. More than half (52 percent) said that doing business in Africa was as or more attractive than the former Soviet Union.
Ide ntifying the Challenges Facing Multinationals
Given that a majority of respondents indicated that their companies do not operate in Africa, we wanted to know why. What prevented them from doing business there? What con- cerns did they have? Perhaps more importantly, we wondered what changes or improvements within African countries might increase their likelihood of doing business there. Companies that do not operate in Africa were concerned
about governance and regulatory frameworks. Within this group, 58 percent indicated that they were not considering doing business in Africa. Among companies that operate in Africa, three-quarters indicated that a more transparent local business culture was necessary in order for them to
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increase their business there. Approximately 70 percent said that more transparency into regulatory processes and better interaction with government offi cials were needed. Half of these respondents said they wanted more eff ective working relationships with local counterparties.
Cor ruption: The Infl uence of News and Africa’s Legacy
Corruption was considered to be a serious concern among many survey respondents. Eighty-six percent of those whose companies operate in Africa said they faced some risk associated with corruption. Nearly two-thirds based this risk on the general reputation of the continent, while more than half attributed it to credible accounts by others. Sixty percent of the respondents at companies that are not operat- ing in Africa based these risks on the continent’s general reputation. Only 10 percent attributed this concern to fi rst- hand knowledge. Regardless, concerns about corruption are clearly shaping companies’ decisions to invest in Africa. A quarter of all respondents said they avoided or ceased doing business there because of concerns about their ability to comply with anticorruption laws. A majority of respondents at these companies said that
more stringent regulatory enforcement by local govern- ments would reduce exposure to corruption. Respondents
SEPTEMBER/OCTOBER 2013 DIVERSITY & THE BAR®
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