Monday, 31 August 2015

Restrictions on working wives damage DRC businesses

Many countries have only recently given women the right to work without their husband's permission, and others have not given them the right yet.  I am not sure of the legal requirements in the DRC, but in practice a husband's approval is frequently required for their wife to work.  For data over the period 2011-2013, if a company hired married women, 37 percent of the time it had to get the permission from the husband to employ at least one of these women.  When it didn't hire any married women, 21 percent of the time the company said that it didn't do so because written permission of the husband was required.

It would be surprising if a husband's permission is legally required in the DRC.  It is an extra cost on business, and is preventing them hiring the employees they want.  It is a further employment restriction on women when they already face restrictions linked to violence.  The population, like many political leaders, is young and presumably has been exposed since childhood to ideas of female equality before the law.

Friday, 28 August 2015

What is the typical highly innovative company in the DRC?

Innovation seems to be important to growth among DRC companies, but what does a highly innovative company in the DRC look like?  I ran a rough analysis looking at correlations of innovation* with different features of companies using data from 2013.  The typical highly innovative company looks like this:

Origin and size of the firm
  • It was formally registered when it began operations
  • It is part of large firm
  • It has more employees

  • It has a bank account
  • It has an overdraft facility

Composition of the workforce
  • It has a greater percentage of production employees (rather than non-production ones)

  • It has a formal training program

Employment practices
  • It recently hired a married woman
  • It didn't hire another married woman because of her family commitments

*in a wide sense: products or methods, from abroad or domestic, preparation or output.  Innovation was measured as an index from zero to ten.

Tuesday, 25 August 2015

E-mail: connecting DRC businesses nationally or internationally?

E-mail is an advantage for business people in the DRC, as it allows them to connect with international suppliers and clients.  It is also an advantage for doing business within the DRC, as it allows communications to regions where it is difficult or dangerous to visit.  Which advantage is stronger?

Table: Level and ease of business transactions across the DRC, for companies who don't use and do use e-mails.

The first row of the table shows the average percentage of supplies that come from domestic sources, for companies that use e-mail and those that don't.  E-mail users have far fewer supplies from domestic sources than email non-users.  The second row shows the percentage of goods that are transported to consumers by river (which can take goods to less accessible parts of the DRC).  E-mail users transport fewer goods by river than e-mail non-users.  The third row shows the percentage of female ownership of companies.  Both men and women are subject to high levels of sexual and non-sexual violence in the East of the country, but women outside of the region might be more adverse to travelling there if the level is higher for them or if they are more aware of it.  Female ownership is lower among e-mail users than e-mail non-users.

There is a lot missing from this analysis, but on the surface of it, e-mail use seems to be more of a solution to problems with international business rather than domestic business in the DRC.

Thursday, 20 August 2015

Helping the Burundian hotel and restaurant sectors to recover - a clarification

My last post discussed tax suspension for the hotel and restaurant sector in Burundi.  I should clarify one point on taxes at the moment.  Many Burundian companies will be losing money and may be entitled to carry these losses over to future years, to offset their tax liabilities when they return to profit.  Suspension of income tax can actually be costly to them.  It is the same reason why income tax breaks for new companies can be disadvantageous to them.

Burundian companies would be more likely to benefit from suspension of taxes that are always positive in every year, like taxes on property ownership, particularly if they are very complicated to administer relative to the size of revenue collected.  They would also benefit from simplification of tax administration.  The idea is to reduce the amount of company expenses at a time when there is little income coming in to them.

Better still would be restoration of peace and hence demand.

Wednesday, 19 August 2015

Helping the Burundian hotel and restaurant sectors to recover

The current unrest in Burundi has badly affected the hotel and night-life industries (here and here in French, and here and here in English).  What can be done to help them?  A survey from last year found that 41 percent of hotels and restaurants thought that tax rates were the biggest obstacle to their operation.  Although reducing tax rates may seem to be an attractive way of protecting struggling businesses, profits are likely to be low and so companies will not pay much income tax anyway.  However, a further 18 percent of hotels and restaurants thought that tax administration was their biggest problem.  A temporary suspension of the more administratively burdensome tax regulations may help companies to remain in operation at this difficult time.

Saturday, 15 August 2015

Workforce education in Rwandan companies

The education level of workforces is a concern of business globally, and a constraint on the performance of companies and countries.  The graph below shows the extent to which Rwandan companies have problems with an inadequately educated workforce.  Half of companies say that they have no or only a minor problem.  However, the other half say that there is a moderate, major, or very severe problem.


Things are a bit better for service sector companies, as shown in the next graph.  54 percent of companies have no or minor problems:

For industrial companies, workforce education is more of a challenge.  55 percent of companies have moderate or worse problems:

Thursday, 13 August 2015

Do Rwandan companies led by women have stronger health promotion among their employees?

There is a hypothesis about how companies are affected by their senior management, called upper echelons theory.  The idea is roughly that senior management make many of the important decisions in a company, and their decisions are influenced by their personal characteristics.

The theory has been applied to the role of women in senior management.  Some arguments are gender neutral - for example, if people are more familiar with their own gender and so tend to prefer it in business transactions, then women may be disadvantaged when men are in a majority, as they usually are.  If women were in a persistent majority, then men may instead find themselves excluded.  Other arguments are not gender neutral, but assert that there are essential differences in the management styles of men and women.  One claim is that women are more caring and supportive of their staff.

If women have a more caring attitude, then it may be apparent in the amount of health messages provided to their staff.  The table shows how frequently companies provide HIV prevention messages to their staff, split by the gender of the main manager.  The data is from Rwanda in 2010.

Percentage of companies with HIV prevention messages

 Companies headed by women provided fewer HIV prevention messages to their staff.  The figures are perhaps not comparable, as women are more likely to lead smaller companies which may not have many resources or need for such messages.  The next table shows the message provision, divided by company size.  For small and medium sized companies, male leadership was associated with more HIV prevention messages.  For large companies, there were more messages under female leadership.  However, the number of large companies led by women is so small that the results are determined by messages from a single company.

Percentage of companies with HIV prevention messages, by company size

Overall, it doesn't seem that female leadership was associated with more HIV prevention messages, at least in Rwanda (which may be anomalous, as it has very high gender equality).

Friday, 7 August 2015

Business policy in Burundi after the unrest

The unrest in Burundi is dominating economic as well as political life in the country.  When the country exits from the unrest there are many fiscal and regulatory policies that would benefit business and help the economy to grow.  In a survey published last year, businesses reported on the challenges that they face when dealing with government.  They described how serious they found each type of challenge, as shown in the table below.  The percentages are the proportion of companies who find the challenge severe, fairly severe, and so on.  Companies seem to be most concerned about the tax rates, followed by corruption.  Policies to address these matters would assist businesses.  Business licensing and permits are a lesser concern.

Major fire in a central Burundian market

There's been a major fire at a food market in the Burundian city of Gitega, according to a report in French here and in English here.  The livelihoods of traders seem to have been badly affected.  Hopefully, the authorities or residents will quickly redevelop it, with internal or external assistance as necessary.  The delays on the redevelopment of Burundi's central market will hopefully not be repeated.

Monday, 3 August 2015

Unrest in Burundi

The unrest in Burundi looks threatening.  An army general, generally described as being at or near to the top of the security apparatus, was assassinated on August 2nd in the capital city.  Reportedly, the perpetrators were wearing military uniform, and the army has retaliated against its own members (here in French, with a disturbing picture).  Alarmingly, the civil society seems to be a particular target, with a journalist severely beaten and a leading human rights activist shot in the head earlier this evening.  The journalist and activist are both internationally recognised and described as distinguished, so reputation seems to have a limited protective effect.