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Financial & Private Sector Development
………….
…….…….
Arusha, TanzaniaAugust 17, 2011
Doing Business inThe East African Community 2011
Financial & Private Sector Development
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.
Financial & Private Sector Development
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
Procedures, time and cost
Paying taxes
Payments, time and Total Tax Rate
Trading across borders
Documents, time and cost
Getting electricity (annex I)
Procedures, time and cost
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
Financial & Private Sector Development
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
Financial & Private Sector Development
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
Financial & Private Sector Development
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.
Financial & Private Sector Development
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
Financial & Private Sector Development
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.
Financial & Private Sector Development
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
Financial & Private Sector Development
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
Financial & Private Sector Development
54 Reforms among countries in the East African Community since Doing Business 2005
Financial & Private Sector Development
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.
Financial & Private Sector Development
For more information visit: www.doingbusiness.org
Screenshot with EAC 2011 report