The Doing Business Report of the World Bank has just been released on October 31, 2018. The ranking, which was criticized last year by Paul Romer, Nobel Prize for Economics, continues to enjoy strong credibility with investors.
For the third consecutive year, “Sub-Saharan Africa is setting its own record for the number of regulatory reforms facilitating business,” says the Bank.
. Last year, the countries concerned by this name (the World Bank, by the way, continues to separate North Africa from the mother continent) conducted 107 reforms aimed at improving the ease of doing business for small and medium-sized businesses. medium-sized enterprises.
This is a not insignificant increase compared to the 83 reforms implemented in the region the previous year. In addition, it is also a record for the number of countries undertaking reforms: 40 of the 48 economies in the region have led at least one reform, against 37 two years ago for the previous record.
Four countries in the region have emerged as the most reformist countries in the world: Togo, Kenya, Côte d’Ivoire and Rwanda. And Maurice joins the leading pack this year, ranked 20th.
Mauritius led five reforms last year, eliminating a barrier that penalized women. In the area of business creation, it standardized the procedure for registering a business for men and women and further simplified the procedures for all applicants. Minority investor protection has been strengthened through clarification of ownership and control structures and increased corporate transparency. Reforms have also been implemented in the areas of transfer of ownership, cross-border trade and the payment of taxes.
With seven reforms last year, Rwanda is the most reforming country in the region, climbing to 29th in the world. In the field of business creation, Rwanda, which has registered the largest number of reforms since the creation of Doing Business 16 years ago, has replaced e-invoicing machines with free software for tax invoices. added value. Regarding the transfer of ownership, an area in which Rwanda ranks second in the world behind New Zealand, new land dispute settlement mechanisms facilitate the registration of property. A new insolvency law improves access to credit, another area in which this country excels, and facilitates the resolution of insolvency by making procedures more accessible to creditors and allowing them to participate more. Rwanda has also reformed the areas of cross-border trade and connection to electricity.
Kenya implemented five reforms, bringing it to 61st place. Among other things, it adopted a new law on access to credit, which propelled it to the 8th rank in the world for obtaining loans. This country has also simplified the payment of taxes for businesses (consolidation of authorizations and tax-paid online service called iTax), while an online system facilitates the transfer of ownership. Further improvements have strengthened the protection of minority investors and facilitated the resolution of insolvency.
Côte d’Ivoire and Togo have introduced online systems for corporate tax reporting and value-added tax, which makes it easier for businesses to pay taxes. Côte d’Ivoire’s five reforms have improved access to credit and quality control of construction and facilitated business registration and contract enforcement. Togo, with six reforms to its credit, facilitated business registration, reducing the minimum capital required, and enforcing contracts through the adoption of a new law on mediation.
Nigeria has implemented four reforms that have facilitated business creation in Kano and Lagos, the two cities covered by Doing Business, but also the connection to electricity and cross-border trade. In addition, Lagos facilitated contract enforcement through new rules of civil procedure for small claims courts, while Kano made the transfer of ownership less transparent by stopping the publication of tariff grid and the list of necessary documents.
For other countries in the region, Ethiopia has implemented three reforms to facilitate the registration of a company, the execution of contracts and obtaining building permits, while in South Africa, two reforms have been implemented. have improved the monitoring and management of power outages and reduced the time needed to start a business.
At the regional level, most reforms have focused on improving contract performance: the 27 reforms adopted in this region account for more than half of the reforms recorded in this area worldwide. The 17 States Parties to the Organization for the Harmonization of African Business Law (OHADA) have in fact adopted, in 2017, a Uniform Act on Mediation as a method of amicable settlement of disputes.
The field of enterprise creation has benefited from 17 reforms, which have mainly focused on reducing the time needed to obtain a business license, streamlining existing services or introducing new online solutions. . Burundi, which leads the region in this area (17th in the world), further lowered the cost of registering a business.
“This is a record year for sub-Saharan Africa. The sharp acceleration of reforms last year and over several years is proof of the powerful momentum of change at work in the region. An efficient business environment that enables private companies to flourish is essential for job creation and growth, “says Santiago Croci Downes, Doing Business Project Manager.
It is in the areas of lending and business creation that the countries of the region record the best performances: four of them (Kenya, Malawi, Rwanda and Zambia) rank among the top 10 in the world for obtaining loans. In addition, the average time and cost of setting up a business in the region averages 21 days and 39% of per capita income, respectively, compared with 61 days and 305% in 2003, at the time of the first Doing report. Business. In addition, the majority of countries have eliminated the minimum capital requirement and others have significantly reduced it.
The region is recording poor results for the connection to electricity and cross-border trade. For example, a company must pay 3 456.5% of the average per capita income for a network connection, compared to 1 229% worldwide. And it takes 98 hours to meet the documentation requirements to import, compared to 61 hours worldwide.
This year, Doing Business collected data on the training provided to civil servants and users of business registers and land registers. The report mentions a case study that analyzes these data and notes that the mandatory and annual training provided to the officials concerned improves the efficiency of these registers. She notes, however, that less than a quarter of sub-Saharan African countries offer such training. A second study notes that when customs clearance agents and customs brokers undergo regular training, border controls and customs formalities are speeded up, facilitating the cross-border movement of goods. It notes that countries such as Angola, the Democratic Republic of Congo and have implemented trade reforms that have benefited from effective communication and training. In Angola and Lesotho, training programs or pilot projects reduced the time needed to prepare documentation during the implementation of the Automated Customs System (ASYCUDA World), a customs data management system developed by the Conference of United Nations Conference on Trade and Development (UNCTAD). Two other case studies focus on the benefits of electricians’ certification and training of judges.
