Many African economies have made it to the top 50 list of the world’s best places to do business, with Rwanda retaining its dominance as Africa’s best place to start a business through a radical reform of its business rules, a World Bank group report released on Tuesday confirmed.
The joint World Bank and International Finance Corporation (IFC) report, Doing Business, ranks countries based on how fast businesses are registered, the efficiency of the business regulations and the tax regulations.
World Bank and IFC researchers concluded that Africa has consistently recorded a high number of reforms, with Rwanda particularly standing out as having consistently improved since 2005.
“Doing Business is about smart business regulations, not necessarily fewer regulations,” said Augusto Lopez-Claros, Director of Global Indicators and Analysis, World Bank Group.
“We are very encouraged that so many economies in Africa are among the 50 that have made the most improvement since 2005 as captured by the Doing Business indicators,” Lope-Claros said.
The report finds that of the 50 economies making the most improvement in business regulation for domestic firms since 2005, 17 are in sub-Saharan Africa.
This year’s report marks the 10th edition of the global Doing Business report series and over the life of the report.
A case study in this year’s report features Rwanda, which, since 2005, has implemented 26 regulatory reforms as recorded by Doing Business.
The current edition, titled Doing Business 2013, measured smarter Regulations for Small and Medium-Size Enterprises.
It found out that from June 2011 to June 2012, 28 of 46 countries in Africa implemented at least one regulatory reform making it easier to do business—a total of 44 reforms.
Burundi, with four reforms, ranks among the 10 economies worldwide that improved the most in the past year across three or more areas measured by Doing Business—the only low-income economy on the list.
The World Bank Group said a lot more could be done to enable African economies to build a strong and competitive private sector.
The region’s average ranking on the ease of doing business is 140 out of 185. Mauritius and South Africa are the only African economies among the top 40 in the global ranking.
African economies that have improved the most include Rwanda, Burkina Faso, Mali, Sierra Leone, Ghana, Burundi, Guinea-Bissau, Senegal, Angola, Mauritius, Madagascar, Mozambique, Côte d’Ivoire, Togo, Niger, Nigeria, and São Tomé and Príncipe.
Doing Business report analyses regulations that apply to an economy’s businesses during their life cycle, including start-up and operations, trading across borders, paying taxes, and protecting investors.
The aggregate ease of doing business rankings are based on 10 indicators and cover 185 economies. Doing Business does not measure all aspects of the business environment that matter to firms and investors.
However, it does not measure the quality of fiscal management, other aspects of macroeconomic stability, the level of skills in the labor force, or the resilience of financial systems.