Thursday, November 24, 2016 8.46 AM / ThisIsAfrica
Almost three-quarters of African countries saw an improvement in their business environments in 2016, according to the Doing Business 2017 report published in October by the World Bank.
Forty African states have seen improvement in their ease of doing business ranking in the 2017 report, with sub-Saharan African economies improving their overall scores at a rate that is three times that of high income OECD economies (albeit, coming from a lower base).
Since 2005, the number of sub-Saharan countries that are engaged in one or more business regulatory reforms has more than doubled to a total of 37 economies in this year’s report.
Mauritius, Rwanda and Morocco are deemed the easiest places in Africa to do business, reflecting the success of reforms implemented by these countries. Although it fell seven places from 42nd globally in 2016, Mauritius held onto its title as ‘best in Africa’ for the 10th year in a row since entering the report in 2006.
Rwanda, which ranked 56th globally and second in Africa, has implemented 47 reforms across all indicators since 2005. These are in line with the government’s Vision 2020 development strategy, which aims to transform Rwanda by raising income per capita to $1240 by 2020.
Morocco, which ranks third in Africa and 68th globally, improved its protection of minority investors by requiring greater corporate transparency and clarifying ownership and control structures.
The biggest improvers in Africa are Tanzania (+3.89), Kenya (+3.72) and Malawi (+3.28) who have increased their ease of doing business score from 2016 and moved up the global rank, placing 132nd, 92nd and 133rd respectively.
Although Kenya was the second most improved for ease of doing business, it improved across more areas measured by Doing Business than any other African country. The country updated its insolvency framework and introduced a geographic information system on power availability.
Although reforms have been implemented, Africa still has a long way to go. Sub-Saharan Africa continues to include economies with the least business-friendly regulations on average.
Of the bottom 10 economies globally included in the report, seven are located in sub-Saharan Africa. Somalia (190th), Eritrea (189th) and Libya (188th) ranked the lowest. According to the report, neither Libya or Somalia have implemented one reform included in any indicator since 2005.
Overview of the 2017 Report
Doing Business 2017: Equal Opportunity for All, a World Bank Group flagship publication, is the 14th in a series of annual reports measuring the regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 190 economies—from Afghanistan to Zimbabwe—and over time.
Doing Business measures regulations affecting 11 areas of the life of a business. Ten of these areas are included in this year’s ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures labor market regulation, which is not included in this year’s ranking.
Data in Doing Business 2017 are current as of June 1, 2016. The indicators are used to analyze economic outcomes and identify what reforms of business regulation have worked, where and why.