Easy business

THE World Bank released the 2017 ease of doing business report this week and, on average, positive momentum continues. East African countries improved their overall ranking with Uganda moving seven places up the ladder, Kenya 21 and Rwanda six places, although it remains among the top reformers in Africa sitting in second position after Mauritius.

It is tempting to dismiss these achievements, because after all that is what states are supposed to be doing for their citizens and the global economy.

At the same time, however, looking at where our economies are coming from, this progress reflects a changing mindset and a realisation that economic growth does not just happen, it is the result of bold, highly rewarding actions that make it easy for business people to execute their plans.

That is why the rate of change and the distance to frontier DTF, a measure of how close an economy is to this destination are important to watch.

In East Africa, at 69.81, Rwanda has the shortest distance to close while Burundi, laying somewhere in the 40s has the longest to go.

The results also disabuse us of the notion that wealth necessarily makes a country good for business. Oil rich Angola is a distant 182 in global rankings and scores a DTF of 38.41; far worse than troubled Burundi. In effect, if Burundi pressed ahead with reforms, it could build on its advantage of being one of the countries where it takes the shortest time to start a business, to grow the economy and improve the lives of its citizens.

The biggest risk to business and economic reforms in Africa is that often, they have been carried out for the potential pay-off but to please the donor community. The best rationale for reforms should be that they improve the situation of the majority of the population.