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While Nigeria Dithers, 3 in 4 African Countries Improve Business Environment

Business Regulations, Law & Practice	6089 VIEWS
Business Regulations, Law & Practice
6089 VIEWS

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.

Source: www.thisisafricaonline.com

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.

Main Findings

Doing Business 2017: Equal Opportunity for All finds that entrepreneurs in 137 economies saw improvements in their local regulatory framework last year. Between June 2015 and June 2016, the report, which measures 190 economies worldwide, documented 283 business reforms. Reforms reducing the complexity and cost of regulatory processes in the area of starting a business were the most common in 2015/16, as in the previous year. The next most common reforms were in the areas of paying taxes, getting credit and trading across borders.Read about business reforms.
Brunei Darussalam, Kazakhstan, Kenya, Belarus, Indonesia, Serbia, Georgia, Pakistan, the United Arab Emirates, and Bahrain were the most improved economies in 2015/16 in areas tracked by Doing Business. Together, these 10 top improvers implemented 48 regulatory reforms making it easier to do business.
Economies in all regions are implementing reforms easing the process of doing business, but Europe and Central Asia continues to be the region with the highest share of economies implementing at least one reform—96% of economies in the region have implemented at least one business regulatory reform.
Doing Business includes a gender dimension in four of the 11 topics sets. Starting a business, registering property and enforcing contracts present a gender dimension for the first time this year. Labor market regulation already captured gender disaggregated data in last year’s report.
This year’s report expands the paying taxes topic set to cover postfiling processes—what happens after a firm pays taxes—such as tax refunds, tax audits and administrative tax appeals.
This year’s report also includes an annex with analysis on a pilot indicator on public procurement regulations.
The report features six case studies in the areas of getting electricity, getting credit: legal rights, getting credit: credit information, protecting minority investors, paying taxes and trading across borders as well as two annexes in the areas of labor market regulation and selling to the government. The case studies and annexes either present new indicators or provide further insights from the data collected through methodology changes implemented in the past two years. See all case studies.