Sub Saharan Africa working hard to make it easier to do business

In the Doing Business 2017: Equal Opportunity for All report from the World Bank Group, Mauritius and then Rwanda top the African countries in terms of ease of doing business. Mauritius stands at 49th in the global index, while Rwanda lies 56th. Botswana comes in third at 71, closely followed by South Africa at 74th. Nigeria, the continent’s largest economy, stands at 169 out of the 190 countries surveyed. In all, a record 137 economies around the world have adopted key reforms that make it easier to start and operate small and medium-sized businesses, states the report, which includes Somalia for the first time. The new report finds Sub Saharan Africa accounting for more than one quarter of all reforms, out of the 283 globally. Sub Saharan African economies stepped up the pace of reform activity, with 37 economies undertaking a total of 80 business reforms in the past year, an increase of 14% from the previous year.hideFor the second consecutive year, Kenya, which is now fifth in terms of Sub Saharan African countries and 92nd in world rankings, was among the world’s top ten improvers, while seven economies implemented four or more reforms each in the past year. In its global country rankings of business efficiency, Doing Business 2017 awards its coveted top spot to New Zealand, while Singapore ranks second. The report cites research that demonstrates that better performance in Doing Business is, on average, associated with lower levels of income inequality, thereby reducing poverty and boosting shared prosperity. “Simple rules that are easy to follow are a sign that a government treats its citizens with respect. They yield direct economic benefits – more entrepreneurship; more market opportunities for women; more adherence to the rule of law,” said Paul Romer, World Bank chief economist and senior vice-president. Doing Business data points to continued successes in the ease of doing business worldwide, as governments increasingly take up key business reforms. Starting a new business now takes an average of 21 days worldwide, compared with 46 days ten years ago. In Rwanda, the time to register a property transfer has dropped from 370 days a decade ago to 12 days now. As an average, Sub Saharan Africa stands 142 in the global index, with South Sudan and Eritrea at 186 and 198 respectively. This year’s Doing Business report adds gender measures to three indicators – starting a business, registering property and enforcing contracts – finding disparities in 38 economies. Of these, 23 economies impose more steps for married women than men to start a business. Sixteen limit women’s ability to own, use and transfer property. Doing Business finds that, in these economies, fewer women work in the private sector both as employers and employees. On the paying taxes indicator, the report covers post-filing processes, such as tax refunds, tax audits and administrative tax appeals, to better understand the overall tax environment. Since 2004, when Doing Business started, a total of 443 reforms have been recorded under the paying taxes indicator, the second highest number of reforms, with 46 reforms implemented in the past year. However, easing the requirements for starting a business is by far the most common area for reform, with almost 600 reforms recorded since 2004. Of these, 49 reforms were introduced during the past year. “Government policy plays a huge role in the daily operations of domestic small and medium-sized firms and onerous regulation can divert the energies of entrepreneurs away from developing their businesses or innovating. This is why we collect the Doing Business data, to encourage regulation that is designed to be smart, efficient, accessible, and simple,” said Augusto Lopez-Claros, director of the World Bank’s Global Indicators Group, which produces the report. This year’s Doing Business report includes a pilot indicator on public procurement regulations. The report studies procurement in 78 economies across five main areas: accessibility and transparency, bid security, payment delays, incentives for small and medium-sized enterprises and complaints mechanisms. Public procurement represents, on average, 10% to 25% of an economy’s GDP, making the procurement market a unique pool of business opportunities for the private sector. Looking at Kenya in more detail, the report states, since 2012, Kenya’s devolution of powers to 47 new counties has prompted major regulatory changes: the national reform agenda is focused on improving service delivery at the local level for all citizens. It also notes: Kenyan entrepreneurs face different regulatory hurdles depending on where they establish their businesses, and no single county in Kenya performs equally well on all indicators. Additionally, there is no relationship between the size of the county (as measured by population) and the rankings. All counties measured have improved in at least one regulatory area between 2012 and 2016, many due to national reforms. A total of ten counties implemented local reforms in at least one of three areas: starting a business, dealing with construction permits and registering property. The creation of the Huduma Centers (one-stop shops for multiple government services) was the boldest reform recorded; new Huduma Centers are helping facilitate business startup and property transfers. Critical challenges remain. Following the devolution process, the national and local governments must create new rules, structures and systems across the two tiers of government and build national and local capacity.

Sub Saharan Africa working hard to make it easier to do business

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