African governments are spending too much time regulating African entrepreneurs out of business

It is quite interesting how African countries can be surprised by the high data costs that telecoms companies are charging consumers and thereby stifling the technology sector at large. What is never discussed in hindsight is how the telecoms oligopolies were formed. The government over-regulated the telecoms market to such an extent that the barriers to entry became so large, that were not only affecting just capital expenditure. The same has happened in the financial services sector. The most interesting trend in respect of regulation is there is always a reason until there is no valid reason because by then, competition has been completely destroyed. In the financial services sector, regulation is supposed to protect depositors which is a valid approach, but how is it possible that in for example, South Africa, there are only four (to five) large banks and in the USA there are over 6,000 banks? At what point is regulating the entry to the financial services sector a problem to the investment and lending in the pursuit of protecting depositors? Is protecting depositors so important that growth in industrial development by entrepreneurs is unnecessary? We know that the South African market is smaller country with a population estimated at 55 million compared to an estimated 330 million in the USA but does the disparity in the number of banks between the two countries make sense?

Then we go back to telecoms companies, and the question becomes, what are regulators trying to protect? There is no depositors funds in the sector. It seems that African governments do not realise the extent they are causing harm to their own local business sector through regulation. Nigeria, Uganda and Tanzania at the moment are in shock at how it is that MTN (South African telecoms company) got the largest market share in each of their countries and at no point are they looking at the events that took place over the last 15 years in the sector due to government regulation. One great example of what typically happens in an over-regulated market is that foreign companies that have deep pockets are the only ones that can invest and take over large local market share. African governments regulated banks, and now there are too few banks to support entrepreneurs, they regulated telecoms so there are too few service providers to reduce

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