Financial & Private Sector Development …… ……. Arusha, Tanzania August 17, 2011 Doing...

Financial & Private Sector Development

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…….…….

Arusha, TanzaniaAugust 17, 2011

Doing Business inThe East African Community 2011


Doing Business – Overview

Launched 8 years ago.

Goal: to provide an objective basis for understanding and improving the regulatory environment for business.

Doing Business 2011 covers 11 areas of business regulation in 183 countries.

The objective: efficient regulations, accessible to all, and simple in their implementation.


What does Doing Business measure?

Doing Business indicators:

Focus on regulations relevant to the life cycle of a small to medium-sized domestic business.

Are built on standardized case scenarios.

Are measured for the most populous city in each country.

Are focused on the formal sector.

DO NOT measure all aspects of the business environment such as macroeconomic stability, corruption, level of labor skills, proximity to markets, regulation specific to foreign investment or financial markets.

Financial & Private Sector Development4

Start-up Expansion Operations Closing Starting a

business

Minimum capital requirement,

procedures, time and cost

Registering property

Procedures, time and cost

Getting credit

Credit information systems

Movable collateral laws

Protecting investors

Disclosure and liability in related party transactions

Enforcing contracts

Procedures, time and cost to resolve a commercial dispute

Dealing with construction permits


Paying taxes

Payments, time and Total Tax Rate

Trading across borders

Documents, time and cost

Getting electricity (annex I)


Employing workers (annex II)

Closing a business

Time, cost and recovery rate

Property rightsInvestor protectionAccess to credit

Entry Administrative burden Flexibility in hiring

Recovery rateReallocation of assets

Doing Business indicators – 11 areas of business regulation (9 included in the ranking)

Financial & Private Sector Development5

1. Singapore 16. Korea, Rep.

2. Hong Kong SAR, China 17. Estonia

3. New Zealand 18. Japan

4. United Kingdom 19. Thailand

5. United States 20. Mauritius

6. Denmark 21. Malaysia

7. Canada 22. Germany

8. Norway 23. Lithuania

9. Ireland 24. Latvia

10. Australia 25. Belgium

11. Saudi Arabia 26. France

12. Georgia 27. Switzerland

13. Finland 28. Bahrain

14. Sweden 29. Israel

15. Iceland 30. Netherlands

Top 30 on the ease of Doing Business 2011

https://www.cia.gov/library/publications/the-world-factbook/flags/ba-flag.html

https://www.cia.gov/library/publications/the-world-factbook/flags/ba-flag.html


Last year in 2009/10, SSA was second fastest reforming region: 27 economies improved business regulations

6

49 reforms in 8 areas with Paying taxes and Trading across borders the most popular


Average ranking on the ease of doing business (1-183)

Where do the EAC economies rank on business-friendly regulations in 2011?

On average EAC ranks higher than: Sub-Saharan AfricaCOMESA OHADA

Burundi

Kenya

Rwanda

Tanzania

Uganda


Average ranking of the EAC economies comparing to SSA average in 2011

The EAC economies on average rank better than the Sub Saharan African average in 8 out of 10 indicators.


East African Community and selected Sub-Saharan Africa countries - overall performance on Doing Business 2011

183

181

168

169

157

151

126

140

133

128

137

122

104

98

67

76

58

69

52

34

20

0 20 40 60 80 100 120 140 160 180

ChadBurundi

CameroonAngola

ZimbabweBurkina FasoMozambiqueMadagascar

MalawiTanzania

NigeriaUgandaEthiopia

KenyaGhana

ZambiaRwandaNamibia

BotswanaSouth Africa

Mauritius


Rwanda leads on reform pace (DB change score) over past 5 years

10

Rwanda is the front runner in the region.

Mauritius reformed its regulations at a steady pace from DB07.

Zambia made progress recently and is among the DB11 top reforming economies.

Tanzania improved its business regulatory environment in DB07.

5-year measure of cumulative change

Ghana made considerable progress with 5 reforms recorded in DB08.


The EAC reformers in 2009/10

11

Uganda 2 Reforms

2009/10

Rwanda3 Reforms

2009/10

Kenya2 Reforms

2009/10

Burundi 1 Reform 2009/10

Dealing with construction Getting Credit

Trading across borders Enforcing contracts

Starting a business Paying Tax


EAC countries DB 2011 rank DB 2010 rank Change in DB rank

Rwanda 58 70 Improved 12 places

Kenya 98 94 Dropped 4 places

Uganda 122 129 Improved 7 places

Tanzania 128 125 Dropped 3 places

Burundi 181 181 No change

Change in EAC economies’ rank according to Doing Business 2011

Analysis of a five-year DB change score in Doing Business indicators between BD2006 and DB2011 shows positive scores for all EAC economies.

EAC economy DB Change Score from DB06 to DB11

Rwanda 0.4

Uganda 0.08

Tanzania 0.07

Burundi 0.03

Kenya 0.02

The DB change score illustrates the level of change in the regulatory environment for local entrepreneurs as measured by DB indicators. The DB change score ranges from -0.1 to 0.54


54 Reforms among countries in the East African Community since Doing Business 2005


TopicEast African Community

best practice according DB 2011

Starting a business Rwanda (9)

Dealing with construction permits

Kenya (35)

Registering property Rwanda (41)

Getting credit Kenya (6)

Protecting investors Rwanda (28)

Paying taxes Rwanda(43)

Trading across borders

Tanzania (109)

Enforcing contracts Tanzania (32)

Closing a business Uganda (56)

14

The EAC business environment can be comparable to that in Japan

If each East African country were to adopt the region’s best practice for each Doing Business indicator, East Africa would rank 18th instead of 117th bringing the community closer to the global top performers such as Japan.


For more information visit: www.doingbusiness.org

Screenshot with EAC 2011 report

Financial & Private Sector Development …… ……. Arusha, Tanzania August 17, 2011 Doing...

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