BRS Institute publishes SME index Africa

Africa is one of the most diverse continents on earth: 54 states, rich cultures, impressive landscapes and many hundreds of ethnic groups speaking more than 2,100 languages. "Despite all current risks and problems, Africa is a continent that will shape the future of mankind," says Prof. Dr. Jürgen Bode, Director of the BRS Institute and Vice President Internationalization and Diversity at the H-BRS. He considers africa as a continent with lots of business potential for small and medium-sized enterprises.

As an aid, the BRS Institute has therefore developed in collaboration with partners an SME index for Africa. Based on a variety of differently weighted criteria it deals with the needs of the Mittelstand and summarizes the attractiveness of each African country in a total key figure. The Africa SME Index provides a rating for 34 African countries – four in North Africa, 30 in sub-Saharan Africa. The calculated ratings allow companies to assess the attractiveness for investments in the respective country. For a better overview, the rating values are clarified with the help of traffic lights. According to a recent World Bank report, the 34 countries cover around 96 percent of Africa's economic output.

The affiliated institute of the H-BRS is not alone in its assessment, although Germany is not one of the pioneers with regard to investments in Africa. "At the EU and UN, G8, G20 and many other international organisations and industrialised countries such as China and Japan, Africa has long been at the top of the agenda," says Professor Bode. The Bundesministerium für Wirtschaftliche Zusammenarbeit und Entwicklung (BMZ) has recognised the "unique opportunities" and the "great potential" and wrote in 2017: "About half of the 20 fastest-growing economies are located there. By 2035 Africa will have the largest labour force potential in the world. This is where the global markets, the customers and the employees of the future will grow. The Bundesministerium für Bildung und Forschung (BMBF) has also been pursuing a focused "Africa Strategy" since 2018.

About the Africa SME Index

The Africa SME Index draws its information from 55 factors. These were summarised in 16 indicators specially developed for small and medium-sized enterprises, which in turn were condensed into three key indicators. Finally, these key indicators - Scale and Scope of Market Opportunities, Getting into the Market and Navigating inside the Market - result in a country rating that gives SMEs a quick overview of the business attractiveness of the respective country. A special feature of the Africa SME Index is the evaluation of factors and indicators against the background of qualitative expert interviews with SMEs, state institutions, chambers of commerce and associations. In addition, survey data were collected from local African consulting firms.