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EAC improves business environment

12th April 2012
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A newly released ‘Doing Business for East African Community Report 2012’ has revealed that the business environment for entrepreneurs in all five economies improved in 2010-2011, as the countries implemented critical regulatory reforms.

The IFC and World Bank report, which was officially launched by the First Burundian Vice President, Therence Sinunguruza here, compares business regulations and identifies good practices across the EAC in the 11 areas covered by the World Bank Group’s annual Doing Business report.

Commenting on the report, EAC secretary general, Dr Richard Sezibera commended the move, saying: “Though, that all done well will amount to nothing without speed.”

“It is therefore imperative that we inject a sense of urgency in accelerating reforms in business taxation, harmonising our commercial laws, building the foundations for an EAC e-registry, strengthening the quality and cost-effectiveness of our regulatory proposals and procedures, and supporting the implementation of the common market protocol, through the publication of a common market scorecard.”

He added: “If we succeed in doing this, I am very certain that we shall be able to transform this market into one of the most thriving globally.”

Dr Sezibera further stated: Let me sound a warning; going by this year’s results, I see both our reform potential and average showing signs of dropping.”

He called upon stakeholders including member countries to re-energise momentum to cooperate in the delivery of best practices and register stronger results.

The EAC boss also asked countries to inculcate a habit of learning from each other’s best practices, to accelerate the necessary reforms to improve the business climate.

He however revealed that each country has individually excelled in initiating and sustaining reform measures, citing Rwanda as ranking 8th globally in the starting a business indicator, Kenya being ranked 8th in the getting credit indicator, while Burundi was one of the most active economies globally in implementing reforms in the year under review, with four reforms across different areas of measurement.

“And though still low, to start a business in EAC now requires 10 procedures and costs an average of 55 percent of income per capita – compared to 12 procedures and a cost of 140 percent of income per capita 7 years ago,” he pointed out.

Presenting the report, Alfred K’ombudo said: “This report, shows that the five countries of the EAC implemented a combined 10 regulatory reforms across nine areas measured.”

The report finds that Burundi is among the top ten most improved economies worldwide in 2010-2011, with four regulatory reforms: dealing with construction permits, protecting investors, paying taxes, and resolving insolvency.

Rwanda, the top performer in the region, made the most progress over the past six years. Worldwide, it made the second-most progress. Over that period, Rwanda implemented 22 reforms, making it easier to do business across nine areas of regulation.

Additionally, the economy has undertaken ambitious land and judicial reforms, introduced new corporate, insolvency, civil procedure, and secured transactions laws. Rwanda has also streamlined and remodeled institutions and processes for starting a business, registering property, trading across borders, and enforcing a contract through the courts.

If each member country were to adopt the region's best practice for each indicator measured by Doing Business, East Africa would rank 19 on the ease of doing business, comparable to Germany, rather than 115.

Over the past seven years, regulatory reforms in the EAC have focused on simplifying regulatory processes — such as trading across borders and starting a business.

SOURCE: THE GUARDIAN
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