Washington, USA, November 1, 2017 – Sub-Saharan Africa economies adopted a record number of business reforms for a second consecutive year, says the 15th anniversary edition of the World Bank Group’s annual Doing Business report, which monitors the ease of doing business for small and medium enterprises around the world.
A total of 83 business reforms were carried out in the past year, surpassing the previous year’s record of 80 reforms. This brings to a total of 798 the number of reforms carried out in the past 15 years in the 48 economies of the region monitored by Doing Business 2018: Reforming to Create Jobs, released today.
The region is well represented in this year’s global top 10 improvers, based on reforms undertaken, with Malawi; Nigeria; and Zambia. Malawi, which implemented four reforms, made significant improvements in the area of Getting Credit by adopting a new law that sets clear rules related to bankruptcy procedures and by establishing a new credit bureau.
Nigeria also improved access to credit by guaranteeing borrowers the right to inspect their credit data from the credit bureau and also made starting a business faster by allowing electronic stamping of registration documents. Reforms in Zambia also included the strengthening of access to credit by adopting a new Movable Property Act and by setting up a new collateral registry.
Much of the reform activity in the past year focused on the areas of Trading Across Borders and Starting a Business, with 15 reforms each, followed by Dealing with Construction Permits, where 14 reforms accounted for 64 percent of the 22 reforms recorded in this area globally.
Zambia implemented a global automated system for customs data (ASYCUDA), making it easier for businesses to trade across borders, while Angola and Mozambique made trading across borders easier by improving port infrastructure.
Several economies, including Benin, Cabo Verde, the Democratic Republic of Congo, Gabon, Ghana, Niger, Nigeria and the Seychelles increased the transparency of dealing with construction permits by publishing regulations related to construction online. Angola also made dealing with construction permits easier and less time-consuming by improving its system for building permit applications.
Kenya implemented the most reforms in the region in the past year, with six. Among other improvements, Kenya made starting a business easier by reducing the number of procedures required to register a business, and reduced the time for import documentary compliance by utilizing a single window system.
Kenya also improved the reliability of electricity supply by investing in distribution lines and transformers and by setting up a specialized squad to restore power when outages occur and implemented an online platform (itax) for filing and paying corporate income tax.
Four other economies – Mauritania, Nigeria, Rwanda and Senegal – implemented five reforms each during the past year. Rwanda, which is second only to New Zealand in Registering Property, implemented online services to further facilitate property transfers. As a result, it now takes only seven days to legally transfer a property title in Rwanda.
Notable reforms in Senegal included the introduction of stricter pre-trial hearing rules that led to a reduction of the time necessary to resolve a commercial dispute. These new rules have reduced the time to enforce a contract from 925 days to 740 days.
Senegal also made starting a business and registering property less costly by reducing the notary fees for company incorporation and lowering the costs of transferring property, respectively.
Mauritius, the region’s top-ranked economy, carried out four reforms, which included outsourcing the design and construction of sewerage connection works, thus, speeding up the process of obtaining a construction permit and improving processes to facilitate cross border trade. Mauritius also made it easier to transfer property by reducing the transfer tax, implementing a complaint mechanism and publishing service standards.
In the ease of doing business global rankings, Mauritius is in 25th place, followed by Rwanda (41), and Kenya (80) as the region’s top ranked economies.
The Sub-Saharan Africa region continues to struggle in the area of Getting Electricity. On average, obtaining an electricity connection takes 115 days in the region, compared to the global average of 92 days.
“The reform effort in Sub-Saharan Africa is singularly worth celebrating, as the region is beset with myriad crises, including conflict and violence. We hope to continue recording the region’s successes in enabling entrepreneurship to address the challenge of job-creation, particularly for the region’s millions of young women and men,” said Rita Ramalho, Acting Director of the World Bank’s Global Indicators Group, which produces the report.
Highlights of the region’s economies’ successes over the past 15 years
- Making it easier to register a business has been a major focus for the region in the 15 years since Doing Businesswas first published, with 163 reforms recorded in this area. In 2003, it took 61 days on average to start a business in the region. Today, it takes 24 days, which compare with the global average of 20 days. In Kenya, for example, the time needed to start a business has been more than halved from 60 days in 2003, to 25 days today.
- In the area of Enforcing Contracts, Rwanda reduced the time to settle a commercial dispute from 395 days 15 years ago, to 230 days today. In Resolving Insolvency, Zambia increased the recovery rate from 17 cents on the dollar in 15 yearsago, to 48 cents on the dollar today.
- The biggest reformers in the region have been Rwanda, with 52 reforms in 15 years, followed by Kenya with 32 reforms and Mauritius with 31 reforms.
The full report and its datasets are available at www.doingbusiness.org
What are the ranking trends?
- Mauritius, in 25thplace in the Doing Business rankings, is the highest ranked economy in Sub-Saharan Africa. Other economies in the region that perform well on the ease of doing business rankings are Rwanda (at 41), Kenya (80), Botswana (81) and South Africa (82).
- The region’s lowest ranked economies are Somalia (190), Eritrea(189), South Sudan (187), and the Central African Republic (184).
- Other large economies in the region and their rankings are Democratic Republic of Congo(182), Ethiopia (161), Nigeria (145), Tanzania (137), Sudan (170), andUganda (122).
- Rwandaranks among the best globally in the Doing Business areas of Registering Property (with a rank of 2) and Getting Credit (6). In registering property, Rwanda has an efficient land registry where it takes 7 days to transfer property and costs only 0.1% of the property value, the same as in New Zealand.
- Mauritius has among the least cumbersome business regulations in two Doing Businessareas: Dealing with Construction Permits (with a rank of 9) and Paying Taxes (10).
- Four economies in Sub-Saharan Africa rank in the top 10 in Getting Credit (with an average rank of 115). Zambiaranks 2, just after New Zealand, and Rwanda, Malawi andNigeria all rank 6.
- The region underperforms in the areas of Getting Electricity (with an average rank of 148), Trading Across Borders (137), and Registering Property (131). It takes an average of 115 days to obtain a permanent electricity connection to the grid in Sub-Saharan Africa, compared to the global average of 92 days.
What are the reform trends?
- A record number of 83 reforms, making it easier to do business, were implemented in 36 of 48 economies in Sub-Saharan Africa in the past year. This is the largest number of reforms ever recorded by the Doing Businessreport in any region, and represents 31 percent of all reforms implemented globally in in the past year.
- WithMalawi, Nigeria and Zambia, Sub-Saharan Africa is the most represented region among the global top 10 improvers in the Doing Business 2018 report.
- Multiple economies inthe region implemented three or more reforms in the past year, including Kenya (6 reforms), Mauritania, Nigeria, Rwanda, and Senegal (5 reforms each), Malawi, Mauritius and Niger (4 reforms each), and Angola, Benin, Cabo Verde and Zambia (3 reforms each).
- Sub-Saharan Africa accounted for 14 of the 22 reforms globally in Dealing with Construction Permits. Many economies, including Benin, Cabo Verde, Democratic Republic of Congo, Gabon, Ghana, Guinea, Niger, Nigeria and the Seychelles made dealing with construction permits easier by publishing regulations related to construction online.
What are the highlights of the past 15 years?
- Since the start of Doing Business, the region carried out a total of 798 reforms.
- Rwanda has implemented the most reforms in the past 15 years, totaling 52, followed by Kenya (32) and Mauritius (31).
- Starting a Business, with 163 reforms, was the leading indicator for regional reforms, followed by Getting Credit and Trading across Borders with 112 and 108 reforms respectively.
- the average number of days to start a business in the region has dropped to 22.5 days from 61 days in 2003.
Rankings Data for Sub-Saharan Africa
African Eye Report
