New Data for Cambodia, Egypt, Kenya, Mozambique, Nigeria, and Thailand

With 2 new countries added in 2007 (Mozambique and Nigeria), Enterprise Surveys now cover 106 economies around the world. The latest data released in November 2008 comes from 3 countries in Sub-Saharan Africa (Kenya, Mozambique and Nigeria), 2 in the East Asia and Pacific region (Cambodia and Thailand), and 1 in the North Africa & Middle East region (Egypt).

Here are some of the notable findings.

In Kenya, more than 20% of the 657 firms surveyed identified “regulations and tax” as their greatest obstacle to business operations—topping a list of 10 obstacles. But the good news is that significant improvements were seen between 2003 and 2007. For example, a majority (51%) of Kenyan firms saw tax administration as a “major constraint” to business operations back in 2003, compared to just 32% in the latest results. In addition, the percentage of senior management’s time spent dealing with government regulation requirements was slashed from 12% back in 2003 to just 5% in 2007.

In Mozambique, more than 20% of the 479 firms in identified “access to finance” as the greatest obstacle to operations—ahead of all other obstacles. Only 15% of firms surveyed in 2007 had lines of credit from financial institutions—below the regional and global averages of 22% and 33%, respectively.

In Nigeria, 1,891 firms were surveyed for the first time. Among the sizeable group, over 60% pointed their fingers at “electricity” as their greatest business obstacle. They also reported that there were an average of 27 power outages in a typical month—far above the regional and global averages of 14 and 11 days, respectively. Nigerian firms estimate that their losses due to power outages amount to almost 9% of sales. Among the good news in Nigeria is that new electrical connections, water connections and mainline telephone connections do not face the time delays seen elsewhere in the region and the world. (See “infrastructure” for details.)

In Cambodia, corruption remains a major concern for enterprises, but some progress is being made. Specifically, over 60% of the 502 Cambodian firms surveyed in 2007 reported that informal payments or gifts were expected by public officials in order to “get things done” with regard to customs, taxes, licenses, regulations and services. The good news is that that number is down from the 82% reported in 2003. Among those firms that sought government contracts in 2007, more than three-fourths reported that gifts were expected. In the East Asia and Pacific region and in the rest of the world, the average percentages were closer 29%. Meanwhile, Cambodian enterprises’ preoccupation with crime has fallen over time. It’s now in line with regional and below global averages—with only 19% of Cambodian firms calling crime a “major constraint” to their business operations. This is good news compared to 2003 when over 40% of Cambodian firms considered crime a major constraint. In neighboring Thailand, the number in 2006 hovered above 30%. Finally, an impressive 39% of Cambodian firms reported using their own websites for business in 2007—higher than regional and global averages.

In Thailand, the 1,043 firms surveyed in 2006 found more to complain about than in 2004. In fact, “regulations and tax,” “permits and licenses,” “corruption,” “crime,” “access to finance,” “customs and trade regulations” and “labor regulations” were all reported to hinder business operations by more Thai firms in 2006 than in 2004. That said, the data also shows that Thailand remains well financed and innovative compared to the rest of the world. In fact, more than 75% of Thai firms have lines of credit or loans from financial institutions—a number far above the average of 33% for the 106 economies in our database. At the same time, 100% of Thai firms use external auditors and 50% have websites—numbers far higher than regional and global averages. Finally, women continued to represent approximately half of the Thai workforce. And the number of women in senior positions rose notably between 2004 and 2006: from just under 2% to 11%. (For details, see “gender.”)

In Egypt, nearly 30% of the 1,339 firms answering survey questions reported that “political instability” was their greatest obstacle to business operations. Corruption also remains a problem in Egypt. Of the Egyptian firms that pursued government contracts, 92% reported that gifts were expected. In the good news column, Egyptian regulations and tax became less onerous, according to new survey results. Notably, the percentage of Egyptian firms identifying tax rates as major constraint fell from over 79% in 2004 to just below 50% in 2007.