For Rwanda to remain in the league of favourite countries to do business in Africa, it will have to increase the pace for youth employment.
Ashish J. Thakkar Global Entrepreneurship Index report 2016, has ranked Rwanda, Botswana and South Africa among the African countries that have fallen in entrepreneurial environments.
The Global Entrepreneurship Index assessed 85 countries based on 5 pillars; – Policy, Infrastructure, Education, Entrepreneurial Environment and Finance.
Despite the fall, Rwanda still scored high in Policy and Finance Pillars.
According to the rankings, Namibia is 42nd, Rwanda 43rd, Botswana 44th and South Africa 46th – all performed well on the ‘Policy’ pillar but need to improve on infrastructure and education.
Zambia, South Africa and Rwanda, the top 3 countries in Africa scored 72%, 66% and 65% on the Finance pillar respectively.
“Rwanda’s high score on policy and finance pillars is driven by government initiatives that increase the ease of doing business. Credit is easily available and business transparency is high,” the report reads in part.
The report also says that unlike other parts of the world, Africa’s youth population is growing. There are already around 200 million youths aged between 15 to 24 years.
However, unemployment rate among youth in Rwanda is the lowest with 4% compared to other regional countries like Kenya which is close to 20% and Uganda 10%. South Africa and Egypt retain the highest rate; above 40 percent.
Rwanda is creating more jobs for its youth through the National Employment Programme (NEP) which for the past two years has created over 80,000 jobs through skills development and bankable project funding.
The World Bank doing business (DB) report ranked Rwanda among the top countries globally moving three points up in 2016 to claim the 59th position (68.63 points) and expected to hit position 56 in DB 2017.
“Zambia scores particularly well on the finance pillar (72), primarily because of the availability of credit and a low total tax rate,” the report reads.
“This places Zambia in the top 10 of all countries globally on the finance pillar, just behind the USA (78).”
Of the top three African countries in the Index, Namibia and Botswana are stronger on the education pillar because of comparatively higher levels of literacy and quality in education. Both countries have made education central to their development.
The President of African Development Bank, Akinwumi Adesina said that while Africa is poised to become the next center for entrepreneurship, there is more work to be done especially on youth entrepreneurship to reach that goal.
“We must provide Africa’s youth with the required skills and create an environment that will enable them to become the business leaders of tomorrow,” Adesina said in a statement.
Mo Ibrahim, the Chair of the Mo Ibrahim Foundation said; “Entrepreneurs are a great engine for development. In Africa, you need to encourage and create the right environment for their success.”
The Ashish J Thakkar Global Entrepreneurship Index of 85 countries ranks Singapore with the best environment for entrepreneurs worldwide.
The index was created to provide solid policy recommendations to guide discussions and improve entrepreneurial environments globally.