Are we serious about conducive environment?

Un-Doing Business 2018: Eyes Off the Ball 

Nov 4, 2018

Mauritius and Rwanda are leading Africa’s business reform wins.Much of the significant business environment reforms in Africa are happening in its smaller economies, the latest World Bank Doing Business report shows. While Nigeria and South Africa—Africa’s largest economies—have made little gains over the past year, Mauritius and Rwanda are the continent’s star performers.

The latest World Bank Doing Business report shows Nigeria and South Africa—the continent’s largest economies—have made meager progress over the past year. South Africa remains ranked 82nd out of 190 ranked countries while Nigeria fell one place to 146th, a reversal of fortunes after it recorded a 24-place rise in the rankings last year.

In contrast however, smaller economies on the continent are recording big reform wins. Mauritius is a particular success story, rising five places to 20th—the only African country to make the top 20. Mauritius’ rise in the ranking is linked to consistent reforms over the years: since 2005, the time needed to register property has dropped more than 12-fold while time needed for business incorporation has also dropped nearly 10 times.

Mauritius is ranked in the top twenty alongside countries from North America, East Asia and Pacific, Europe and the Middle East. That diversity of countries—in location and income levels, the World Bank says, offers evidence that economic reforms are not out of reach for any country “as long as it has few bureaucratic hurdles and strong laws and regulation.” Notably, Rwanda has also risen 11 places to 29th and is the only low-income economy ranked among the top 30 globally, recording improvements on all but one of the ten Doing Business indicators.

Top ten African nations for Doing Business	Rank
Mauritius	20
Rwanda	29
Morocco	60
Kenya	61
Tunisia	80
South Africa	82
Botswana	86
Zambia	87
Djibouti	99
Lesotho	106

Sub Saharan Africa is the most represented region among the top ten improvers in the Doing Business report with four countries: Kenya, Côte d’Ivoire, Rwanda and Djibouti. Much of the improvement is attributed to “digitization” with all four nations making improvements to simplify the process of filing taxes and accessing tax-related paperwork. Togo, Rwanda and Kenya have also implemented digital solutions to ease property registration.

Going forward, business reforms have to be pervasive across the continent to achieve more uniform improvement as sub Saharan African economies currently score “significantly lower” on average in all areas than most high-income economies. Indeed, a recent World Economic Forum report shows African economies are among the least competitive globally.

Focus on Zambia

Zambia has made strides in three areas: getting credit (2), paying taxes (89) and trading across borders (150). However, it ranks only 85th out of 190. For an essentially trading nation it is simply inadequate scoring over 100 in 5 categories and in the top 20 in only two categories. 

This blog has long maintained that greater policy reforms are needed if we are going to live up to the aims of the Vision 2030 of a diversified middle-income economy.