Sub-sa­ha­ran Africa primed for business

Lesotho Times - - Business - Ven­tures Africa

NEW YORK — The World Bank Group has, in a new re­port, laid cre­dence to the eco­nomic trans­for­ma­tion un­der­way in sub-sa­ha­ran Africa say­ing that the re­gion had the high­est num­ber of business reg­u­la­tory re­forms glob­ally in 2013/2014 and 74 per­cent of the economies in the re­gion im­proved their business reg­u­la­tory en­vi­ron­ment for lo­cal en­trepreneurs.

Re­leased an­nu­ally, the Do­ing Business re­port ex­am­ines reg­u­la­tions that support busi­nesses in the con­cerned economies in­clud­ing start-up and op­er­a­tions, taxes, trad­ing across bor­ders and re­solv­ing in­sol­vency. Coun­tries are ranked based on how they per­form in a set of such cri­te­ria.

The re­port ti­tled “Do­ing Business 2015: Go­ing Beyond Ef­fi­ciency,” which cov­ers 189 coun­tries, posits that Benin, Cote d’ivoire, Sene­gal, the Demo­cratic Repub­lic of Congo and Togo rank among the top 10 im­provers glob­ally as they had sig­nif­i­cantly boosted business reg­u­la­tion in the past year.

Ac­cord­ing to the re­port, all coun­tries in the sub-sa­ha­ran African re­gion have pro­moted the en­vi­ron­ment for small and medium sized busi­nesses since 2005 with Rwanda lead­ing the way in this ef­fort and Mau­ri­tius and Sierra Leone com­ing in sec­ond and third. Also, about 11 coun­tries in the re­gion have fea­tured on the list of the 10 global top im­provers with the likes of Cape Verde, Bu­rundi, Cote d’ivoire and Rwanda ap­pear­ing mul­ti­ple times.

“Sub-sa­ha­ran African economies have come a long way in re­duc­ing bur­den­some business reg­u­la­tions. Our data show that Sub-sa­ha­ran Africa ac­counts for the largest num­ber of reg­u­la­tory re­forms mak­ing it eas­ier to do business in the past year, with 75 of the 230 doc­u­mented world­wide. Yet de­spite broad reg­u­la­tory re­form agen­das, chal­lenges per­sist in the re­gion, where busi- ness in­cor­po­ra­tion con­tin­ues to be costlier and more com­plex on av­er­age than in any other re­gion,” said Melissa Johns, Ad­vi­sor, Global In­di­ca­tors Group, De­vel­op­ment Eco- nomics, World Bank Group.

The World Bank Group has made some no­table im­prove­ments in this year’s re­port. For the 11 economies, the re­port, for the first time, col- lated data for a sec­ond city. For in­stance, data was ac­quired from Nige­ria’s Kano city in ad­di­tion to the com­mer­cial hub, La­gos. Also, over­all rank­ing is now based on the “dis­tance to fron­tier” score where each econ­omy is ranked based on how close it is to global best prac­tices in business reg­u­la­tion; there­fore, a higher score sug­gests a more ef­fi­cient business en­vi­ron­ment and stronger le­gal in­sti­tu­tions.

Glob­ally, Sin­ga­pore tops the scale as eas­i­est place to do business in the world. Other top economies with high business reg­u­la­tory rank­ing in­cludes Aus­tralia, Fin­land, Hong Kong, Den­mark, New Zealand, China, the Repub­lic of Korea, the United States and the United King­dom.

While 80 per­cent of coun­tries in the study im­proved their business reg­u­la­tions last year, only about one-third moved up in the rank­ings. How­ever, the gap be­tween the be­stand worst-per­form­ing coun­tries con­tin­ues to nar­row as coun­tries im­prove their business cli­mates, said Rita Ra­malho, man­ager of the Do­ing Business Project.

“It’s eas­ier to do business this year than it was last year, than it was two years ago or 10 years ago,” she said. “We see that the economies that score the low­est are re­form­ing more in­tensely, so they are con­verg­ing to­ward the economies that do the best.”

For ex­am­ple, in 2005 it took an av­er­age of 235 days to trans­fer prop­erty in the low­est-ranked coun­tries and 42 days in the top-ranked coun­tries — a dif­fer­ence of 193 days. The gap now has nar­rowed to 62 days (around 90 days for the low­est-ranked and less than 40 for the top-ranked).

The re­port mea­sures the ease of do­ing business in 189 economies based on 11 business-re­lated reg­u­la­tions, in­clud­ing business start-up, get­ting credit, get­ting elec­tric­ity, and trad­ing across bor­ders. The re­port does not cover the full breadth of business con­cerns, such as se­cu­rity, macroe­co­nomic sta­bil­ity, or cor­rup­tion.


Rwanda is lead­ing the way in small and medium sized busi­nesses.

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