Kenya: Country Tops in Doing Business in East Africa

Edris Kisambira

Africa had a record year for regulatory reforms that make it easier to do business, with 28 countries completing 58 reforms, the Doing Business 2009 reports published by the International Finance Corporation (IFC) and the World Bank has said.

"With more reforms of business regulations in Africa than in any previous year, we are seeing many countries get inspiration from their neighbors about how to reform," said Sabine Hertveldt, a co-author of the report.

"Increasingly, countries in the region are committing to reform agendas that make it easier to do business," she added.

The sixth in an annual series, the 2009 report, which was released last week in Mauritius, said three of the world's top reformers of business regulation in Africa this year are Senegal, Burkina Faso and Botswana.

Among East African Community (EAC) member states, Kenya is ranked highest at number 82, followed by Uganda at 111, Tanzania at 127, Rwanda at 139 and Burundi at 177.

According to the report, Kenya implemented major trade reforms among them reducing the overall time to import by 11 days.

The opening hours of customs and port authorities were extended, and the number of inspection points between Nairobi and Mombasa port reduced.

Kenya also introduced an electronic system allowing traders to submit their documents online.

The time required to open a business was also reduced, thanks to improvements in communication between agencies and the upgrading of the registry.

While Rwanda was ranked lower, major reforms included dealing with construction permits, registering property, trading across borders and enforcing contracts.

"Rwanda streamlined construction permitting for the second year in a row by combining the applications for location clearance and a building permit in a single form and introducing a single application form for water, sewerage, and electricity connections," a summary of the report on Rwanda's reforms reads in part. It said this reduced both the number of procedures and the time required for dealing with construction permits.

The time and cost to register a property also fell. A new fixed registration fee was introduced, and centralization of the tax service reduced the time to obtain a certificate of good standing.

Rwanda facilitated trade by extending the opening hours of the customs border offices, implementing an electronic data interchange system, and introducing risk-based inspections.

In Burundi, Uganda and Tanzania, no major reforms were recorded.

On a continental level, Senegal made it easier to start a business, register property, and trade across borders. Burkina Faso introduced a new labor code and reforms for registering property, dealing with construction permits, and paying taxes.

Botswana cut the time to start a business, facilitated trade, and strengthened investor protections.

Mauritius moved up to 24 in the global rankings on the regulatory ease of doing business and continues to provide inspiration for reform and good practices to other economies across Africa.

The runner-up in these overall rankings is South Africa at 32, followed by Botswana at 38. Doing Business ranks economies based on 10 indicators of business regulation that track the time and cost to meet government requirements in starting and operating a business, trading across borders, paying taxes, and closing a business. The rankings do not reflect such areas as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates.

Singapore leads the global rankings on the overall regulatory ease of doing business for a third consecutive year.

New Zealand is runner-up and the United States third. Bahrain and Mauritius join the ranks of the top 25 this year.

"Economies need rules that are efficient, easy to use, and accessible to all who have to use them," said Michael Klein, World Bank/IFC Vice President for Financial and Private Sector Development.

"Otherwise, businesses get trapped in the unregulated, informal economy, where they have less access to finance and hire fewer workers, and where workers lack the protection of labor law."

Doing Business 2009 ranks 181 economies on the overall ease of doing business. The Doing Business project is based on the efforts of more than 6,700 local experts - business consultants, lawyers, accountants, and government officials, and leading academics around the world who provided support and review.

Source: http://allafrica.com

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