Africa boosts business-friendly reforms, World Bank says

Countries in Sub-Saharan Africa implemented a record number of reforms in 2016 to improve the business climate for local entrepreneurs, the World Bank said in its annual ease of doing business report.

The report – titled ‘Doing Business 2017: Equal Opportunity for All’ – collected data from 190 countries around the world and ranked the nations according to regulations implemented over the course of the year that enhance or constrict business activity. In total, 37 out of 48 sub-Saharan Africa countries adopted 80 business-friendly reforms in 2016, this is up by 14% on the previous year.

The reforms implemented by the countries included improving the access to online portals for startups, introducing conciliation procedures that make resolving insolvency easier and reducing the tax burden on businesses.

The top 5 sub-Saharan countries featured in the World Bank’s global ease of doing business report were: Mauritius, at number 49; Rwanda, at number 56; Botswana, at number 71; South Africa, at number 74; and Kenya, at number 92. The latter climbed 21 places in the World Bank’s rankings by implementing tax reforms and streamlining the process of getting electricity for new startups. The other rising star in the region was Tanzania, which climbed 12 places year-on-year to reach number 132 this year.

Meanwhile, more than half of the reforms implemented over the past year were implemented by West and Central African nations that make up the Organization for the Harmonization of Business Law in Africa (OHADA) body. The reforms adopted by the various governments have led to an improvement in the business climate, with the average time to start a business in Sub-Saharan Africa standing at 27 days, compared with 37 days five years ago, according to the World Bank’s report.

“Although the region still has work to do to make itself more business-friendly, we see steady improvements within various economies in the region,” said Rita Ramalho, manager of the Doing Business project. “To see a record number of reforms take place in Africa is very encouraging for local entrepreneurs and the global business community alike.”

Despite the marked improvement in the business climate in the region, sub-Saharan African countries made up three of the bottom five countries for doing business. Somalia, Eretria and South Sudan came in at number 190, 189 and 186, respectively, out of 190 countries around the globe.

Additionally, 13 were identified as being restrictive to female entrepreneurs. These included Cameroon, Benin and Guinea-Bissau, which required women to take more steps to formally register a business compared to men.

Taku Dzimwasha