Kenya recorded the biggest improvement in the region in the 2016 World Bank’s ease of doing business ranking, moving up 21 positions to 108 in the global investment competitiveness survey even as Rwanda, while still remaining top in the region, slipped six places to come in at number 62.
Uganda improved by 10 places to 122 while Tanzania moved a single digit to 139. Ethiopia was position 146 while Burundi slipped to 152. Kenya also emerged as the third most improved nation in its business regulatory reforms and also one of the top 10 improved countries in the ease of credit access.
Kenya’s Industrialisation Cabinet Secretary Adan Mohammed said the improvement in the ranking was an indication that reforms were working.
“We are happy that the results are now showing,” said Mr Mohammed.
In October last year, Kenya established a Business Environment Delivery Unit that was tasked with addressing the challenges investors face when trying to do business.
The country is now expecting its 2017 ranking to further improve following the recent enactment of business-friendly laws that were not captured in the report. In the past three months, President Uhuru Kenyatta has signed the Companies Act, the Special Economic Zones Act and the Insolvency Act.
“We hope the enforcement of these Acts, coupled with the infrastructural reforms we are undertaking, will further improve the business environment in the country,” said Mr Mohammed, adding, “These Acts and a raft of other regulatory reforms that are being implemented by the government will radically improve our standing.”
According to the report, Kenya has improved in four regulatory areas including starting a business — through the setting up of Huduma centres, which are one-stop shops for company registration; reduced electricity connection procedures; access to credit especially through mobile money platforms; and easier registration of property through the digitisation of land records.
Rwanda recorded improvements in access to credit; starting a business; dealing with construction permits through the establishment of new building codes; urban planning regulations and a web-based land administration information system, which has speeded up property transfer and registration to one month from 12 months; protecting minority investors and winding up of business. The country has however dropped in the area of access to electricity.
In 2014, the country removed the burden of new companies opening accounts for VAT payments and also made it compulsory to use an electronic filing and payment system, which improved the business environment.
However, Rwanda’s Finance Minister Claver Gatete, while applauding the country’s continued top placing, said the methodology and indicators used have affected the rankings of many other countries in the 2016 Doing Business Report.
“We are pleased that we managed to implement the highest number of reforms in the region, six of them carried out in the past year,” said Mr Gatete.
Rwanda last week got a boost when Off-Grid announced a $25 million investment in solar energy in the country. The government is also involved in various energy projects that are meant to boost capacity and access. Last year, Rwanda announced that it will meet its 2017 target of getting 70 per cent of the country’s population connected to grid electricity, up from the current 22 per cent.
Tanzania’s ranking in ease of starting a business is still its greatest hurdle dropping seven positions and affecting its overall score.
According to the report, the region’s second largest economy performed dismally in the categories of registering property, where it dropped 21 positions; access to credit; protecting minority investors; paying taxes and resolving insolvency. It only improved in the trading across borders category, mostly from its increased cross-border trade with Kenya — its biggest trading partner.
Uganda improved its ease of credit access, going from 128 to 42. It also recorded improvements in the areas of getting electricity but its 2014 launch of online registration of Kampala-based businesses did not improve its position in the starting business category. Last year, it received a $100 million loan from the World Bank to improve its business environment.
In August, Umeme chief executive Selestino Babungi said Uganda was planning to connect 80,000 new customers to the national grid by the end of the year. “We are working on having affordable connection fees that will see more Ugandans get access to electricity services,” said Mr Babungi.
Last month, the country received a $121 million loan from Africa Development Bank to be used in improving electricity access in Uganda. Only 14 per cent of Ugandans nationwide and seven per cent in rural areas have access to a reliable energy source.