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Guinea-Bissau Frustrates Entrepreneurs

Guinea-Bissau, like many African countries, is a difficult place to do business. Some of the obstacles include unclear regulations, pervasive corruption, political instability and the lack of infrastructure. Phuong Tran met with entrepreneurs who say the coastal country presents some business opportunities, but also a lot of frustration.

Yves Robles has managed the European-owned bottling plant Naturalis for the past year. He says the company's $1 million investment to bottle spring water has not yielded profits. Plans to expand to bottled wine and fruit juices are on hold.

He says the plant operates at only about 30 percent of its capacity. Robles says the biggest expense and problem is electricity. The state electricity company still uses decades-old, Portuguese-colonial era equipment that fails to provide even half of the country's energy needs.

Robles says his company's generator uses 200 liters of costly oil per day, which means thousands of dollars less per month in profits.

Though the government is pursuing investments that may boost energy services in the next few years, including a regional hydroelectric project with Gambia, Guinea and Senegal, Robles says this may not be enough for his company's investors. He says they are giving his Bissau plant five years to improve profits.

Robles also says government inspectors can visit his company at any moment, enforcing certain rules such as the temperature at which it is supposed to store bottles. He says it is difficult to maintain that temperature because of energy problems. By paying the inspector, he says, the company is allowed to continue production. But Robles says within months, the inspector changes, and the company must pay again.

The government has appealed to investors for help in building processing factories that can turn the country's natural wealth - including wood from its forests, and fish, fruit and cashews - into local revenue.

The country's main export is cashews that are sold mainly to companies in India and Brazil, which process the nuts to earn much higher profits than the growers in Guinea-Bissau.

Romain Boitard, an aid worker in Bissau who works with civil society groups, says cashew processing could be profitable in Guinea-Bissau, if it were not for the taxes, delays and general headaches entrepreneurs face.

"For an entrepreneur to start up a business here, he really has to be an adventurer," said Boitard. "There is quite a bit of equipment involved. You need to dry (the cashew], grill it, break the outside, break it just right so the nut looks at the end, looks good, and you feel like eating it. You need to get a machine. If you wanted to get one of these machines, it would take you months to get it out of the port. It makes it difficult for anybody with good ideas to implement them."

Boitard says the capital's port does not operate regularly, adding another hurdle to any would-be entrepreneur.

According to the U.S.-based Heritage Foundation, starting a business in Guinea Bissau takes more that five times the world average of 43 days.