Sunday, September 25, 2011

Reading: East Africa Could Match Japan In Ease Of Doing Business

The business regulatory environment in East Africa would be comparable to that of Japan if the best of East African regulations and procedures were implemented across the board.

This was revealed during the recent launch of The Doing Business in the East African Community 2011 report which draws on data from the annual global Doing Business study and takes a detailed look at business regulations in Burundi, Kenya, Rwanda, Tanzania, and Uganda. The report states that East Africa could benefit from sharing good practices in business regulation as measured by Doing Business.

In the past five years all East African Community economies made it easier to do business. The average ranking for those countries is 117 out of 183 economies overall in Doing Business 2011. Kenya has some of the most business-friendly regulations for dealing with construction permits. Ugandan courts resolve insolvency relatively efficiently while Rwanda is among the fastest places to start a business. “If each East African country was to adopt the region’s best practice for each Doing Business indicator, East Africa would rank 18, bringing the community closer to the global top performers,” said Sabine Hertveldt, World Bank Senior Private Sector Development Specialist and co-author of the report.

The East African Community is the regional intergovernmental organization of the economies studied in this report. In recent years EAC economies have worked to harmonize EAC Customs Union legislation and common market protocols while establishing peer-to-peer networks such as the Network of Reformers, based on similar models in the Organization of Economic Cooperation and Development and the European Union.

In July 2010, EAC countries officially entered into a common market. “We are serious about our role in the creation of an environment which is attractive to increasing private sector activity within and across our borders. We can do this by further streamlining regulations affecting businesses and by ensuring that the business environment is reassuring to investors,” stated Enos Bukuku, EAC Deputy Secretary General in a speech delivered on behalf of the EAC Secretary General. "Although the common market has opened several opportunities for businesses in the region, it still requires an investment climate that is properly suited to catalyzing additional trade and investment.

The EAC Doing Business report serves as a platform for private sector and governments to work together to make doing business in the community easier," said Agatha Nderitu, Executive Director, East African Business Council.

Between June 2009 and May 2010, as recorded by the report, East African countries implemented eight reforms making it easier to do business. Of the eight reforms, three were carried out in Rwanda, two each in Kenya and Uganda, and one in Burundi. As a result of the reforms in business registration, the average time to start a business in East Africa fell from 37 days in 2005 to 24 days in 2010.

As recorded in Doing Business 2011, Kenya dropped 4 places in the rankings on the ease of doing business (from 94 in the previous year to 98). Tanzania dropped 3 places (from 125 to 128). Burundi re¬mained at 181. On the other hand, Uganda improved 7 places (from 129 to 122), and Rwanda, for the second year in a row, featured among the 10 economies that improved the most on the ease of doing business, moving up from 70 in the global rankings in Doing Business 2010 to 58 in Doing Business 2011.

Doing Business in the East African Community 2011 was prepared as part of the EAC Investment Climate Program supported by the World Bank Group and PRO€INVEST, a partnership program developed and undertaken by the European Commission on behalf of the African, Caribbean and Pacific Group of states. 



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For more information on this report and about the Doing Business report series, visit www.doingbusiness.org