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Working Paper - 219 - Impact of the business Environment on Output and Productivity in Africa
Africa is by far the poorest part of the world. Although several African countries have recently experienced positive economic development outcomes, it is clear that there has been a failure to develop sound policies in many African countries. In particular, African countries rank poorly in most dimensions of business environment that are essential to long-term business success. Table 1 compares different indicators of the business environment from the World Bank Enterprise Surveys (ES) for the OECD and Sub-Saharan Africa (SSA).1 It is clear that firms in SSA are highly constrained compared with their counterparts in the OECD. For example, on average, 45.6% of firms in SSA identify access to finance as a major constraint while the corresponding number for the OECD sample is 14.6%. In addition, 50.3% of firms in SSA identify electricity availability as a major constraint while the corresponding number for the OECD sample is 16.4%.