DOING BUSINESS IN

AFRICA IN
ETHIOPIA, KENYA, SUDAN
ANTON DOKUCHAEV

CONDITIONS
Saudi businessman
Wants to open business in agricultural sphere
Proximity to Saudi Arabia (wants to export
goods there)
Arabic/English are preferable
Established economic ties with Saudi Arabia
Islam plays a role, but secondary

DOING BUSINESS
(AFRICA)

GLOBAL COMPETITIVENESS INDEX

(2014-15) IN AFRICA

ETHIOPIA

ETHIOPIA
GOVERNMENT: Federal Parliamentary Republic
CAPITAL: Addis Ababa
POPULATION: 88.9 million
ISLAM: 33,9%
CURRENCY: Ethiopian birr (1 dollar = 20 birrs)
LANGUAGES: Amharic + Arabic, Somali, Tigrinya, etc. (English is widely
used in business)
LITERACY: 43%
GDP (PPP): $121.4 billion; 9.7% growth; $1,366 per capita
UNEMPLOYMENT: 5,7%
FDI Inflow: $953 million

ECONOMY
ECONOMY:
Industries (5%): Food proccesing, beverages, textiles, chemicals;
Agriculture (85%): Cereals, pulses, coffee, oilseed, cattle,
hides;

MAIN EXPORTS: Coffee, gold, corn/maize, leather products,

cattle, oilseeds; 60% exports agriculture
MAIN IMPORT PARTNERS: China 15,3%; Saudi Arabia
8,1%; India 7,2%; USA 5,6%;
MAIN EXPORT PARTNERS: China 13%; Saudi Arabia 8,3%;
Germany 8,3%; USA 8,1%; Belgium 7,1%;
IMPORTS $10,6 billion; EXPORTS $3,1 billion.

TAXATION
Corporate income tax
30%;
A 2% tax is payable from
supplying of goods to the
local market and rendering
of construction, grain mill,
tractor, combine harvesting
services undertaken in the
country;
Customs duties payable on
imports (range 0-35%);
No export taxes.

VAT (above 500,000

birrs per year):

INDEX OF ECONOMIC
FREEDOM

INDEX OF ECONOMIC
FREEDOM

CORRUPTION

CORRUPTION GRAPH
(YEARS)

GLOBAL COMPETITIVENESS INDEX

(2014-15)

DOING BUSINESS IN
ETHIOPIA

DOING BUSINESS IN
ETHIOPIA

DOING BUSINESS IN
ETHIOPIA

INTERESTING FACTS:
Frequent droughts affect agriculture;
13 months in a year;
Sun rises at 6 a.m., eithiopians measure it to
be 12 oclock;
80 languages (children have to learn both
tribal and official ones);
One of 2 states never occupied;
Rastafarian motherland;

ETHIOPIAN CUSTOMS
Formal;
Ato for men, Woizero & Woizrity married and
unmarried women;
Business meeting schedules are not rigid, like agendas;
Relationships crucial, 30m 1h for tea/coffee;
Meetings last till the success or when everybodys tired;
Favours for favours;
Conduct business with friends, mostly;
They are hard to say no, though it doesnt mean anything

OTHER FACTS
Office Schedules: Mon-Fri 8:30 11:00 and
13:30 17:30;
Government Schedules: Mon-Fri 8:30 11:00
and 13:30 15:30;
Reliance on relief aid;
Service and manufacturing miniscule
players in economy, though Growth and
Transformation Plan encourage FDI in
agriculture and manufacturing;

KENYA

KENYA
GOVERNMENT: Presidential Republic
CAPITAL: Nairobi
POPULATION: 45 million
ISLAM: 11,1%
CURRENCY: Kenyan shilling (1 dollar = 97 shillings)
LANGUAGES: English and Swahili
LITERACY: 87,4%
GDP (PPP): $80,4 billion; 5.6% growth; $1,812 per capita
UNEMPLOYMENT: 9,2%
FDI Inflow: $514,4 million

KENYA
ECONOMY:
Industries (15%): small-scale consumer goods (plastic, furniture),
agricultural products processing, oil refining;
Agriculture (24%): tea, coffee, corn/maize, wheat, dairy
products;

MAIN EXPORTS: tea, horticultural products, coffee, petroleum

products, fish
MAIN IMPORT PARTNERS: India 20,7%; China 15,3%; UAE
9,5%; Saudi Arabia 6,7%;
MAIN EXPORT PARTNERS: Uganda 10,5%; Tanzania 10,2%;
Netherlands 7,1%; UK 6,7%; USA 5,8%;
IMPORTS $14,39 billion; EXPORTS $5,9 billion.

TAXATION
Corporate income tax 30%;
Non-resident companies 37,5%;
Resident companies 30%;
VAT 16%;
Unprocessed agricultural products exempt;
No export taxes;
No special deals with Saudi Arabia.

INDEX OF ECONOMIC
FREEDOM

INDEX OF ECONOMIC
FREEDOM

CORRUPTION

CORRUPTION GRAPH
(YEARS):

GLOBAL COMPETITIVENESS INDEX

(2014-15)

DOING BUSINESS IN
KENYA

DOING BUSINESS IN
KENYA

INTERESTING FACTS
Kenya animal horn in Hebrew (some say,
in Russian it means innocent or harmless
- ?);
Despite coffee is #1 income generator,
Kenyans prefer tea or beer (prefer it hot);
Only 2 seasons rainy and dry;
Before marriage some Kenyans still pay a
dowry to the brides family, which starts at 10
cows.

KENYAN CUSTOMS
Formal;
Harambee concept mutual responsibility, assistance and community;
Group-oriented;
Address people with their titles and full names;
Dont jump straight into business talks;
Business success depends on relations (though they might take quite a
time);
Gifts are good (dont DARE to give them with LEFT hand);
If you are mzungu (white) dont talk about tribes or Kenyan politics;
Try to be punctual (though they are likely to be late);
Treat elders with ultra-respect (dont start eating if the eldest person didnt);

OTHER FACTS
Hours of business: Mon-Fri 9:00 17:00;
Showing anger a sign for mental instability;

SUDAN

SUDAN
GOVERNMENT: Dominant-party Federal Presidential Republic
CAPITAL: Khartoum
POPULATION: 37,2 million
ISLAM: 97%
CURRENCY: Sudanese pound (1 dollar = 5,9 pounds)
LANGUAGES: English and Arabic
LITERACY: 60%
GDP (PPP): $90,5 billion; 3,4% growth; $2,631 per capita
UNEMPLOYMENT: 15,3%
FDI Inflow: $3,1 billion

SUDAN
ECONOMY:
Industries (45,3%): oil, cotton, textiles, cement, edible oils,
sugar, soap distilling, shoes, petroleum refining;
Agriculture (44,5%): cotton, groundnuts, sorghum, millet, wheat,
sheep;

MAIN EXPORTS: oil and petroleum products, cotton, sesame,

livestock, groundnuts;
MAIN IMPORT PARTNERS: Macau 18%; India 8,8%; Saudi
Arabia 7,9%;
MAIN EXPORT PARTNERS: UAE 63,2%; Saudi Arabia
9,2%; Ethiopia 5,3%;
IMPORTS $6,823 billion; EXPORTS $8,464 billion.

DOING BUSINESS IN
SUDAN

DOING BUSINESS IN
SUDAN

NO FURTHER INFO
AVAILABLE (since 2000)
BECAUSE OF

SOUTH SUDAN

WHY NOT DOING

BUSINESS IN SUDAN?
Possible further fragmentation of the country
(Darfur, tensions with South Sudan, Eastern
Front, South Kurdufan and Blue Nile states,
etc.);
Possible Islamist uprising;
160th out of 189 countries in Doing Business!
Males/Females eat separately (possibly, not
bad for Saudi businessperson);
Zar Sudanese women are frequently
possessed by evil spirits, so they call an
exorcist;

GLOBAL COMPETITIVENESS INDEX

(2014-15)

DOING BUSINESS
COMPARISON

STARTING A BUSINESS
COMPARISON

HOFSTEDE CENTRE
RANKS

KENYA vs. ETHIOPIA

Doing Business: 136th

Opening business: 30
days
Islam: 11,1%
Transparency Index: 145
Global Competitiveness:
World 90; SubSaharan 6;

Doing Business: 132th

Opening business: 15
days
Islam: 33,9%
Transparency Index: 110
Global Competitiveness:
World 118; SubSaharan 16;

KENYA vs. ETHIOPIA

Ethiopia has got a better ranking than Kenya
in five indicators: Dealing with Construction
Permits, Getting Electricity, Registering
Property, Enforcing Contracts and Resolving
Insolvency;
Kenya ranks better in five indicators: Starting
a Business, Getting Credit, Protecting Minority
Investors, Paying Taxes, Trading across
Borders;

ETHIOPIA
PROS:
High proximity to Saudi Arabia;
Well established economic
relations (Saudi Arabia is 2nd
both in exports and imports);
15 days on average to open
business;
Tackling corruption (acc. to
Transparency);
Growth and Transformation
Plan;
Special agreements with
Saudis;
Arabic + English;
Agriculture 85%;

CONS:
High level of corruption (110 out
of 175 states);
Fighting corruption stalled since
2012;
Highly uncompetitive (118 of
144);
Losing even weak position in
Doing Business;
Droughts;
Low literacy;
Eritrea and Somali made
Ethiopia landlocked;
Proximity to a potential hot spot;
Rather high taxes.

KENYA
PROS:
Slowly climbing in Doing
Business;
English;
One of the most
economically booming
African states;
Nairobi is pretty
developed city;

CONS:
Rather high taxes;
Weather;
No special deals with Saudis;
Agriculture is not that
important comparing to other
states;
30 days for opening business;
Cautious relations to white
people.

CONCLUSION
Ethiopia is likely to fir requirements
More agriculture-oriented
Stronger ties with Saudi Arabia
Geographically close
Presence of Arabic (and English as well)
Better in some ranks
Certain percentage of Muslims
Better to start a Flour/Maize milling plant (many
investments in this sphere)

THANK YOU!