While Africa, for the first time, made it to the top three reforming regions in the International Finance Corporation's (IFC's) 'Doing Business' report, South Africa slipped one place to number 29 on the list of the top economies on the ease of doing business.

Principal author Caralee McLiesh of the 'Doing Business 2007' report, which was released on Wednesday, told reporters that South Africa made only one reform during the year, but two-thirds of other African countries made at least one reform. Ghana and Tanzania were ranked among the world's top ten reformers.

“In previous years, Africa ranked last among the regions, but the region is picking up the pace of reforms,” she said, adding that it was now ahead of the Middle East, Latin America and East Asia.

South Africa was, however, the only African country to be ranked among the top 30 economies, with Singapore, New Zealand and the US regarded as the top three economies.

McLiesh said that South Africa reduced its property transfer duty from 10% of the property value to 8% of the value, but that it was still high when compared to another African country, Ghana, whose transfer duty was only 2% of the property value. It also required six steps and 23 days to register a property.

McLiesh said that South Africa's rigid labour laws, the cost of property registration and the complex tax systems were some of the biggest constraints to doing business in the country. Entrepreneurs in South Africa must make 23 payments and spend 350 hours on their tax. They also pay 38,27% of gross profit in taxes in a year.

The report said that that some 213 regulatory reforms, in 112 economies, reduced the time, cost, and hassle for businesses to comply with legal and administrative requirements.

Reformers simplified business regulations, strengthened property rights, eased tax burdens, increased access to credit, and reduced the cost of exporting and importing.

The top ten reformers were Georgia, Romania, Mexico, China, Peru, France, Croatia, Guatemala, Ghana, and Tanzania. Thirteen other economies, Armenia, Australia, Bulgaria, Czech Republic, El Salvador, India, Israel, Latvia, Lithuania, Morocco, Nicaragua, Nigeria and Rwanda, had three or more reforms.

Some of the top African reformers included the Ivory Coast, which decreased the time of registering property from 397 days, in 2005, to 32 days in 2006. Burkina Faso cut the procedures for starting a business from 12 to 8 and the time from 45 days to 34 days. Madagascar reduced the minimum capital for start-ups from 10-million francs to 2-million. Tanzania introduced electronic data interexchange and risk-based inspections at customs, which reduced the time to clear imports by 12 days.

Gambia, Nigeria, and Tanzania also reduced delays in the courts.

“Such progress is sorely needed. African countries still have the most complex business regulations. They would greatly benefit from new enterprises and jobs, which can come with more business-friendly regulations,” said the World Bank and IFC vice president for financial and private sector development Michael Klein in a media release.

Meanwhile, McLeish told reporters that Africa had good practices in its region and that, if an African country adopted the region's best practices, it would be ranked eleventh in the world. It would feature between Ireland and Japan.

The 'Doing Business 2007' report tracked indicators of time and cost to meet government requirements in business start up, operation, trade, taxation, and closure. They do not, however, track variables, such as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates.

McLeish said that the IFC was considering bringing in corruption and infrastructure into next year's survey.

The 'Doing Business' report had already inspired and informed at least 48 reforms around the world, she reported.

All over, Georgia was the top reformer in 2005/6, as it improved in six of the ten areas studied by 'Doing Business'. It reduced the minimum capital required to start a business, sped up customs, licensing, and court procedures, and made labour regulation more flexible. Business registrations rose by 55% between 2005 and 2006 and unemployment has fallen by 2 percentage points.

China and Eastern European countries were also active in enacting reforms. China sped business entry, increased investor protections, and reduced red tape in trading across borders. It also established a credit information registry for consumer loans. Banks can now check credit histories of 340 million citizens before extending loans.

Meanwhile, the desire to join the European Union inspired reformers in Bulgaria, Croatia, and Romania (the second-fastest reformer). And regulatory competition in the enlarged union added to Latvia's momentum for reform.

The most popular reform in 2005/6 was easing the regulations of business start-up. Forty-three countries simplified procedures, reducing costs and delays. The second most popular reform, implemented in 31 countries, was reducing tax rates and the administrative hassle of paying taxes.

“Reforms should ease the burden on all businesses, including small and large, domestic and foreign, rural and urban. This way there is no need to guess where the next boom in jobs will come from. Any business will have the opportunity to thrive,” said Simeon Djankov, also an author of the report.

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