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South Africa and Nigeria have confronted the telecommunications infrastructure problem with significant
advances in mobile telephony with the involvement of large telecom operators, thus allowing for the
growth of mobile savvy new businesses which could compete in both the local and international market
place.
According to the World Economic Forum Global Competitiveness Report Executive Opinion Surveys,
during the period from 2008 to 2010, local executives were consistent in identifying access to financing,
tax regulations and rates, inadequate supply of infrastructure, and corruption as the most problematic
factors for doing business in Senegal. The same issues appear to be the primary constraints for SMEs. A
2009 study by Senegal’s Directorate of SMEs found that 69% of SMEs listed investment finance as a
major constraint, followed by the taxation rate (44%), lack of operating finance (42%), cost of production
(31%), and the size of the market for business services (31%).
The labour issue reflects a human capital development problem which could be improved through specific
forms of intervention at the local level of both the firm and the region (by government) impediments.
Where SMEs find particular difficulty in making inroads they share in common with many other sub-
Saharan African countries. Thus low literacy levels and the lack of skilled labour hamper prospects of
opening up other sectors. The uncertain business environment, outdated technologies together with labour
market rigidities and high business operating costs are other factors. The regulatory environment can
leave the labour market inflexible to respond to rapid changes in the international market.
Tariff and Non-tariff Barriers
The set of international barriers is dominated by tariff and non-tariff barriers including, for example, non-
tariff developed country agricultural support programmes and high tariffs on agricultural products. The
availability of and access to transparent information about adequate trading standards is also an
impediment to trading activities, as the USITC (2005) evidence for Cameroon and Uganda suggests.
Internal Barriers
Many of the constraints that SMEs face have a direct bearing on their capacity to be successful exporters.
An efficient local firm has a better chance of engaging in exports than a weak small or medium sized
enterprise. We note a direct correlation with external barriers which both reflect and can create problems
within the firm. Where there are labour market rigidities there is generally a lack of incentive for re-
training or skills upgrading. Poor infrastructure compels firms to operate within and accept constraints
which limit growth. Only a few highly innovative firms can escape.
As stated earlier, the World Economic Forum Global Competitiveness Report Executive Opinion
Surveys, for the period from 2008 to 2010 reported that local executives were consistent in identifying
access to financing, tax regulations and rates, inadequate supply of infrastructure, and corruption as the
most problematic factors for doing business in Senegal. These issues are also highlighted in the USITC
(2005) report. We do not have access at this stage to specific issue in our group of sub- Saharan country
SMEs, but reports in general have noted internal barriers on all fronts due in large part to the external
constraints referred to above.
3.3. MENA Countries
3.3.1. General Conditions
The MENA’s (Middle East and North Africa) regional economic diversity includes the oil-rich Gulf
countries together with the more resource scarce economies of countries such as Egypt, Morocco and