Despite initial predictions to the contrary, the world's least developed countries, and foremost among them the countries of Africa, have found themselves on the front line of the economic crisis. Sharp decreases in investment flows, remittances, export demand, export credits and commodity prices have reduced opportunities and pushed millions of people back into poverty. And while several countries, including Germany, France and Japan, already seem to be back on the road to recovery, the direct and indirect effects of the crisis are likely to be felt in Africa for quite some time, particularly so because the continent remains structurally ill-prepared to take advantage of any potential global upswing.
While the business climate in Africa has improved substantially over the past decade, particularly when it comes to commercial law, the cost of doing business on the continent is still the highest in the world. Entrepreneurs in Africa continue to face greater regulatory and administrative burdens, and have less protection of property and investor rights than entrepreneurs in any other region. They also continue to struggle with inadequate infrastructure, which in many areas of the continent restricts their entrepreneurial potential to a bare minimum.
