IMF Report: Nigeria and Sub‑Saharan Africa Lead Developing Regions in Governance, Business Regulation, and Market Openness

 *Says continent  in need of  growth reset

 Ndubuisi Francis in Abuja 

Nigeria and other Sub‑Saharan African countries lag behind most other developing regions in governance, business regulation, and market openness, a new IMF blog post has said.

These gaps are widest in fragile and conflict‑affected states and oil exporters, although they are not fixed.

The report cites Rwanda and the Benin Republic as examples of countries that have reduced red tape and used digital tools to simplify doing business.

According to the report, reforming state‑owned enterprises—particularly in energy and transport—is another key priority. It notes that when tariffs stay below cost‑recovery levels, cash flow weakens, maintenance is delayed, and investment stalls. “The result is a familiar tax on growth: unreliable and expensive services for firms and households. The better reform efforts use four ingredients: map stakeholders, align prices with costs, define social goals clearly, and explain how any savings will be used,” the post said.

The report states that at current growth rates, per‑capita income in Sub‑Saharan Africa would take roughly half a century to double.

Referencing the IMF’s latest Regional Economic Outlook for Sub‑Saharan Africa, it affirms that well‑designed structural reforms—especially in governance, business regulation, and market openness—could lift output by around 20 percent within a decade.

“The point is not reform for reform’s sake. It is to shift the growth model from one led mainly by the state to one driven more by private investment, productivity, and jobs,” the blog post says.

“Despite strong performance in a handful of countries—including Benin, Côte d’Ivoire, Ethiopia, Rwanda, and Uganda—growth across the region has been too weak to deliver meaningful income convergence. Over the past three years, real GDP per capita grew by about 1.4 percent a year, compared with about 3.4 percent in emerging markets and developing economies overall.”

“Past growth spurts—often fueled by commodity booms or inefficient public investment—faded fast. They did not trigger the sustained private investment needed to keep growth going, with labour productivity nearly flat for three decades.”

“The public sector‑led growth model is now spent. With debt high, borrowing costly, and aid falling, the state can no longer be the main engine of growth. The region needs more private investment, backed by broad, business‑friendly reforms,” the IMF blog post said.

It states that choosing and designing reforms is only half the job, adding that implementing them is usually harder.

“This is because benefits often arrive slowly, sometimes beyond an electoral cycle, while vested interests resist change. Political feasibility matters as much as technical design,” the post noted.