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Mixed ‘doing business’ report for South Africa

27th November 2015

By: Anine Kilian

Contributing Editor Online

  

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South Africa remains one of the top eco-nomies in sub-Saharan Africa, along with Botswana, Mauritius and Rwanda, says the World Bank. Its ‘Doing Business 2016: Measuring Regulatory Quality and Efficiency’ report, which was released last month, ranked South Africa seventy-third of the 189 countries measured.

This is a decline from the recalculated ranking of 69 the year before. However, the report found that South Africa performed as well as many advanced economies in several areas of doing business measured by the report.

In the area of protecting minority investors, the country performed as well as Norway and Sweden, as it afforded minority shareholders protection through high disclosure standards and ample legal recourse.

With strong legal protection, minority investors in South Africa can be confident about their investments, as conflicts of interest are well regulated. South Africa is also among the top performers when it comes to paying taxes.

It takes an entrepreneur in Johannesburg seven payments and 200 hours to file all necessary taxes, compared with the average of 39 payments and 309 hours in the rest of sub-Saharan Africa. The country’s performance is closer to high-income Organisation for Economic Cooperation and Development economies, where it takes an entrepreneur an average of 11 payments and 177 hours to pay his or her taxes.

Two other areas where South Africa performed significantly better than the global average was resolving insolvency and getting credit. The private credit bureau covers the majority of the adult population and collects most of the relevant areas of information to assess creditworthiness.

Owing to this, a small business in Johannes-burg with a good financial history is more likely to get credit and hire more employees.

“South Africa has historically been one of the best performers in the sub-Saharan African region; however, there is room for improvement and the continued implementation of reforms will be key to improving the regulatory framework in areas like cross-border trade or getting new connections to the electricity grid,” World Bank Southern Africa director Guang Zhe Chen says.

South Africa is one of the economies where it takes the longest time to obtain a new electricity connection – 226 days – significantly above the regional average of 130 days.

Border compliance in South Africa is also time- consuming. For example, it takes 144 hours to comply with border procedures on the import side, compared with the global average of 87 hours.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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