Doing Business in the East African Community 2013 Alfred Ombudo K’Ombudo

Doing Business
in the East African Community 2013
Alfred Ombudo K’Ombudo
Coordinator, EAC Common Market Diagnostics
World Bank Group
2 May 2013
Kigali
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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, or of regulation specific to foreign investment or financial
markets.
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Doing Business indicators – 11 areas of business
regulation
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The EAC has more efficient regulatory processes
and stronger legal institutions than ECOWAS
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Pace of reforms remains strong in 2011/12: share of
economies with at least one reform making it easier to
do business
OECD high
Income
68%
EU-27
88%
Eastern Europe
and Central Asia
67%
47%
Middle East and
North Africa
46%
38%
Latin America
& the
Caribbean
100%
45%
South Asia
East Asia and
Pacific
61%
EAC
Sub-Saharan
Africa
Worldwide, 108 economies implemented 201 reforms in 2011/2012.
All 5 EAC economies implemented reforms improving their business regulations
for small and medium sized business in 2011/12
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Key findings of the Doing Business in
the EAC 2013 report
 All 5 EAC economies implemented institutional or regulatory reforms - making it
easier to do business across 8 different areas in 2011/12.
 The EAC ranks 117 (out of 185) - but there is great variation in business regulations
among the EAC economies—from Rwanda (52) to Burundi (159) – this wide
variation in business regulations is among the issues that the EAC needs to tackle.
 If a hypothetical EAC economy were to adopt the region’s best regulatory practices
in each area measured by Doing Business, it would stand at 26 in the global
ranking on the ease of doing business – showing the region’s potential.
 Burundi was among the world’s most active economies in implementing regulatory
reforms in 2011/12. It implemented policy changes in 4 areas measured by Doing
Business: starting a business, dealing with construction permits, registering
property and trading across borders.
 In 3 of 5 EAC economies (Rwanda, Tanzania, Uganda) the company registry makes
fee schedules for incorporation easily accessible. In only 2 EAC economies does
the relevant agency make fee schedules for electricity connections, property
registration or building permits easily accessible.
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EAC economies rank on average higher than the
regional average in SSA in the ease of doing business
East African Community:
Burundi, Kenya, Rwanda, Tanzania, Uganda
OECD high income 30
Southern African Development Community:
Angola, Botswana, the Democratic Republic of Congo, Lesotho,
Madagascar, Malawi, Mauritius, Mozambique, Namibia,
Seychelles, South Africa, Swaziland, Tanzania, Zambia, Zimbabwe
Eastern Europe & Central Asia
East Asia & Pacific
Middle East & North Africa
Latin America & Caribbean
77
87
93
95
116
117
South Asia 117
Economic community of West
African States:
Benin, Burkina Faso, Cape Verde, Côte d’Ivoire, The
Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali,
Niger, Nigeria, Senegal, Sierra Leone, Togo
Sub-Saharan Africa 137
149
Economic Community of Central African
States:
172
Angola, Burundi, Cameroon, Central African Republic, Chad,
the Democratic Republic of Congo, the Republic of Congo,
Equatorial Guinea, Gabon, São Tomé and Príncipe
Who in the EAC made starting a business easier in
2011/12?
• Rwanda continues to make it easiest to start a
business – and it is the only low-income economy
ranking among the top 10 globally on the ease of
starting a business.
• Burundi moved up to 28 in the global ranking in
2011/12.
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Who in the EAC makes dealing with construction
permits easy – and who does not?
• Kenya is the top performer on the
ease of dealing with construction
permits.
• Since 2005, Rwanda implemented 3
reforms making it easier to deal with
construction permits: besides setting
up a one-stop shop, it introduced time
limits for processing the building
permit and the occupation permit.
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Burundi reduced the time required for property
transfers by a month in 2011/12
Reforms in 2011/12
•Burundi established a
statutory time limit for
processing property transfer
requests through an
administrative order calling
for improved workflow
processes at the land
registry. The land registry
now issues a new title in the
property purchaser’s name
30 days faster.
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Among African regional blocs, an EAC member
tops the ranking on each of the 3 aspects of
investor protections measured 1/2
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Among African regional blocs, an EAC member
tops the ranking on each of the 3 aspects of
investor protections measured 2/2
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Who in the EAC makes exporting and
importing easy?
Who in the EAC makes exporting easy – Who in the EAC makes importing easy –
and who does not?
and who does not?
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The EAC compares well globally on the speed of
contract enforcement
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How Rwanda cut the time to enforce contracts
by more than a third in Kigali
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Resolving insolvency takes longer and is
costlier in the EAC than in other regional blocs
in Africa
Reforms in 2011/12
•Uganda has substantially
improved its foreclosure
proceedings and has also
undertaken a revision of its
insolvency law. The new act
is expected to strengthen
creditors’ rights; clarify rules
on the appointment of
liquidators, managers,
administrators and trustees;
and allow debtors to enter
into an arrangement
intended to avoid
insolvency.
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Looking Ahead
 The EAC It has been among the fastest growing regional blocs
in Africa in the past decade and has made much progress in
harmonizing national policies in different areas: many good
regulatory practices can be found, especially in the areas of
starting a business, getting credit and protecting investors.
 Examples of remaining challenges: harmonization of
commercial laws, implementation of a regional e-registry,
completion of the tax simplification and harmonization agenda.
 Aggressive implementation of peer learning.
 Implementation of the EAC Common Market Scorecard
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Thank you very much.
For more information please visit:
www.doingbusiness.org
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