There is still a room for African economies to build strong and competitive private sector, a new report by the International Finance Corporation (IFC) and World Bank released yesterday has said.
This year’s report marks the 10th edition of the global Doing Business Report series and over the life of the report, Africa has consistently recorded a big number of reforms.
The report Doing Business 2013 said despite the achievements, more can be done to enable African economies to build a powerful private sector.
According to the report, Tanzania has made starting business easier by eliminating the requirements for inspections by health, town and land officers as a prerequisite for business licensing.
At the same time, Tanzania has made dealing with construction permits more expensive by increasing costs when obtaining building permits and as well as importing business more difficult by introducing certificate of conformity before the goods are shipped in. Tanzania ranked the 134 out of 185 nations tracked in the survey.
The region’s average ranking on the ease of Doing Business is 140 out of 185, while Mauritius and South Africa are the only African economies that fall among the top 40 in the ranking.
“Doing Business is about smart business regulations, not necessarily fewer regulations,” said World Bank director for global indicators and analysis Augusto Lopez-Claros.
He said they are encouraged that so many economies in Africa are among the 50 that have made the most improvement since 2005 as captured by the Doing Business indicators.
African economies that have improved the most since then include Rwanda, Burkina Faso, Mali, Sierra Leone, Ghana, Burundi, Guinea-Bissau, Senegal, Angola, Mauritius, Madagascar, Mozambique, Ivory Coast, Togo, Niger, Nigeria, and São Tomé and Príncipe.
Singapore topped the global ranking on the ease of Doing Business for the seventh consecutive year.
Joining her in the list of 10 economies with the most business-friendly regulations are Hong Kong, China, New Zealand, US, Denmark, Norway, UK, Korean Republic, Georgia and Australia.
However the report shows that of the 50 economies making the most improvement in business regulation for domestic firms since 2005, 17 are in SSA.
Rwanda particularly stands out as having consistently improved since 2005. A case study in this year’s report features Rwanda, which since 2005 has implemented 26 regulatory reforms as recorded by the report.
On smarter regulations for Small and Medium-Size Enterprises, the report found that from June 2011 to June 2012, 28 of 46 governments in SSA implemented at least one regulatory reform making it easier to do business.
Burundi, with four reforms, ranked among the 10 economies worldwide that improved the most in the past year across three or more areas measured by doing business the only low-income economy on the list.
The aggregate ease of Doing Business rankings are based on 10 indicators and cover 185 economies. Doing Business does not measure all aspects of the business environment that matter to firms and investors.