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African countries pushing ahead with business reforms, report shows

29th October 2013

By: Terence Creamer

Creamer Media Editor

  

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The World Bank Group’s latest ‘Doing Business’ report shows that a number of sub-Saharan African countries have continued to implement reforms aimed at easing the regulatory burden on business, with Rwanda, Côte d’Ivoire and Burundi listed among the top 10 reformers globally in a study covering 189 countries.

The report, titled ‘Doing Business 2014: Understanding Regulations for Small and Medium-Size Enterprises’, is the eleventh in the series and documented 238 business regulatory reforms worldwide last year, 66 of which were adopted by African countries.

It also persisted with the inclusion of the controversial ‘Ease of Doing Business’ aggregate rankings, which were criticised earlier this year by an independent panel review of the study, chaired by South Africa’s Trevor Manuel.

The panel concluded that there was potential for the rankings to be misinterpreted and recommended that, while the report should be retained, the bank should also consider removing the aggregate rankings. However, the panel acknowledged that doing so would diminish the report’s influence on policy and public discussion.

The bank indicated that the panel’s recommendations came too late for significant changes to the 2014 report, but said improvements would be made in future editions. It also included its usual disclaimer that the report did not measure all aspects of the business environment that matter to firms and investors.

The authors said that governments in 114 countries had significantly stepped up the pace of improving business regulations last year, which represented an 18% rise from the previous year.

The rankings were topped by Singapore, Hong Kong, New Zealand, the US and Denmark, with South Africa coming in at 41, making it the highest-ranked African country.

The table was propped up by a host of African countries, including Chad, the Central African Republic, Libya, South Sudan, the Republic of the Congo, Eritrea, and the Democratic Republic of Congo.

Of the 47 economies in the sub-Saharan African region monitored, 31 implemented at least one business regulatory reform in 2012/13. Rwanda implemented the most in the region, with reforms in eight of the ten areas tracked.

Burundi was identified for having made the biggest progress globally in the ease of registering property, while Benin and Côte d’Ivoire lead the world in improvements made in the ease of trading across borders and in the ease of enforcing contracts respectively.

For the first time, Doing Business also measured business regulations in South Sudan, which gained independence in 2011. The report said that, despite the challenges of creating laws and regulations from scratch, South Sudan had already passed a company law, tax law and insolvency law.

The authors found that sub-Saharan Africa was home to nine of the 20 economies narrowing the gap with those on the "regulatory frontier", the most since 2009.

But the contrast between those at the frontier compared with those still lagging is considerable in some areas, arguably epitomised by the length of time it takes in different countries to start a business.

On average, around the world, starting a business took seven procedures, 25 days and cost 32% of income per capita in fees. In New Zealand, though, it took as little as one procedure, half a day and almost nothing in fees.  However, an entrepreneur must wait 208 days in Suriname and 144 in Venezuela.

Edited by Creamer Media Reporter

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