Should you open a business in Africa

Best and worst African countries who enforce business contracts you should learn before you open a business in Africa.

Considering opening a business in Africa? First take into account what would happen if a vendor on African soil decides not to pay you? International business good practices include efficient contract enforcement through the courts in Africa. Mauritius at 72.22% has the best enforcing contract rate while at 28.84% São Tomé and Principe has the worst enforcing contract rate.

Enforcing contracts in Africa looks at the regulatory environment, this is important for firms to operate. Imagine you are a small business and one of your customers decides not to pay you for your goods or service. Well you need that money because you have outstanding debts that you need to repay or maybe you were counting on that money to make your own purchases or investment.

Judge in South Africa

One of the ways you have to recover that money is to go to the courts but this only makes sense if the courts are efficient and you are going to spend a little time through the court and not pay high costs. More business would be willing to invest more if they have greater confidence in the African court system to recoup money owed.  Efficient contract enforcement is linked with economic development when court systems are efficient and fair.

What is a contract? A contract is a legally enforceable binding document between two or more parties that ties each participant to a written and or verbal agreement creating a legal duty or responsibility. The party that did not breach the contract can ask the court to have the contract cancelled and then sue the breaching party for restitution. All businesses deal with contracts; even if they are unwritten, as with many transactions involving goods or services.

In Africa, an enforacable contract is essential to productive economic development and sustained growth. Economic and social progress cannot be achieved without respect for the rule of law and effective protection of rights, both of which require well-functioning courts that resolves cases in a reasonable time and is predictable and accessible.

African economies with more efficient courts, in which courts can effectively enforce contractual obligations, are associated with more rapid growth and overall, enhancing the efficiency of the judicial system can improve the business climate, foster innovation, attract foreign direct investment and secure tax revenues for struggling African economies.

The three best and worst African countries who enforce business contracts.

Best Contract Enforcing	Percent Enforced
Mauritius	72.22
Rwanda	69.11
Mauritania	65.98

Worst Contract Enforcing	Percent Enforced
São Tomé and Principe	28.84
Central African Republic	31.39
Gabon	32.84

The enforcing business contracts score is calculated by three indicators:

Time to resolve the dispute.

How costly are the court costs including attorney fees.

Quality of the court system.

Complete table of Africa's 54 countries percentage of contract enforcement:

African Country	Percent Contracts Enforced
Algeria	54.78
Benin	41.5
Botswana	49.99
Burkina Faso	41.05
Burundi	42.97
Cabo Verde	64.84
Cameroon	39.9
Central African Republic	31.39
Chad	45.51
Dem. Rep. Congo	33.28
Rep. Congo	43.99
Côte d'Ivoire	57.6
Djibouti	48.43
Egypt	39.97
Equatorial Guinea	56.17
Eritrea	55.93
Eswatini	36.72
Ethiopia	62.77
Gabon	32.84
The Gambia	50.88
Ghana	54
Guinea	53.87
Guinea-Bissau	38.61
Kenya	58.27
Lesotho	57.18
Liberia	35.22
Libya	48.41
Madagascar	50.04
Malawi	47.4
Mali	42.8
Mauritania	65.98
Mauritius	72.22
Morocco	63.7
Mozambique	39.78
Namibia	63.44
Niger	54.69
Nigeria	61.46
Rwanda	69.11
São Tomé and Principe	28.84
Senegal	50.61
Seychelles	51.25
Sierra Leone	55.92
South Africa	56.88
Somalia	54.58
South Sudan	58.99
Sudan	47.84
Tanzania	61.66
Togo	49.02
Tunisia	58.41
Uganda	60.6
Zimbabwe	39.6
Zambia	50.82