Creating a climate for business success

April 10, 2014
Mary O'Neill
Inclusive Growth Insights
Despite its persistent development challenges, Africa has some of the world’s fastest growing economies. Entrepreneurship has deep roots, but a number of barriers restrain private sector development. Many African economies are small and fragmented, having limited access to global markets. With financial markets just emerging, entrepreneurs have limited access to capital. Supportive policies are needed to create a healthy business environment.

Against this backdrop, IDRC launched the Investment Climate and Business Environment Research Fund in partnership with TrustAfrica. To date, the Fund has supported 115 projects in 26 countries. The latest phase focuses on ways to stimulate small- and medium-size enterprises while ensuring that prosperity is broadly shared. The research, training, and networking we support through the Fund have helped decision-makers in a number of countries take concrete steps to nourish small businesses.

For example, research findings in Botswana led the government to simplify and decentralize business registration. Entrepreneurs can now avoid long queues by registering through one of three regional offices. The government also made it easier for entrepreneurs to get loans after a research team found that applicants — especially women — were discouraged by a requirement that they hold a trading licence. Licences can now be bought after securing a loan.

The impact can also be seen in Cameroon, where a network of microfinance institutions doubled its loans to women after research by the University of Yaoundé II helped fine-tune its strategy for supporting female customers. And, in Senegal, the national investment promotion agency used a grant from the Fund to implement an electronic business registration system.

Mary O'Neill is an Ottawa-based writer.

Learn more about IDRC-supported research on inclusive growth