East Africa countries do poorly to ease doing business

Wednesday November 1 2017

An aerial view of Nairobi city centre.

An aerial view of Nairobi city centre. Kenya and Rwanda made notable changes to improve doing business in East Africa. PHOTO | FILE | NMG 

By HELLEN GITHAIGA
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A majority of East African economies are yet to make significant reforms to create an easier environment to do business, a new World Bank report shows.

Only Rwanda and Kenya made notable changes to improve doing business in the region, moving more than ten places up globally, according to the World Bank's Doing Business 2018 report.

Rwanda remains the easiest place to conduct business and is ranked 41 from 56 last year.

Kenya, East Africa’s largest economy, moved 12 places up to position 80 from 92 last year.

The two countries, which rank second and third after Mauritius (25) in sub-Saharan Africa, eased paying and filing taxes by establishing online platforms and dealing with construction permits by eliminating licence fees in the case of Kenya and introducing risk-based inspections in Rwanda.

Kigali, the report notes, also improved in corporate governance, online registration of property transfers and allowing public access to judgements on commercial cases.

Nairobi’s reforms included merging procedures for business registration, reliable electricity with specialised teams to restore outages, access to credit information and reducing time in cross-border trade by enabling electronic submission of customs entries through the single window system.

Laggards

Despite impressive economic growth, Ethiopia dropped ranking from 159 last year to 161. The country only reforms included removing the requirement to open a bank account for company registration and eliminating the paid-in minimum capital requirement. It also strengthened its customs authority to better cross-border trade.

Tanzania increased land and property registration fees and was ranked 137 dropping five places from 132.

Uganda, which introduced only one reform, and Burundi, which increased the cost business registration, dropped seven places each to rank 122 and 164 respectively.

War-torn South Sudan and Somalia, troubled by Al-Shabaab terrorist group, remain the least ranked at 187 and 190 respectively.

The World Bank Doing Business report measures aspects of regulation across 190 economies affecting the life of a business including starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.