The small economies in Africa are at the forefront in terms of leading business reforms, while the big economies are not performing well in this area. The big economies in Africa are not undertaking reforms to improve the ease of doing business fast enough.
According to the latest World Bank Business Doing Report, Nigeria and South Africa, which are the continent's largest economies, have not made improvements as far as the ease of doing business is concerned. Out of the 190 economies ranked by the World Bank, South Africa is ranked number 82. This is measly progress made by South Africa. Nigeria recorded the biggest slump, as it is placed at number 146. This is in stark contrast with the 24-place rise it recorded last year.
The ease of doing business is measured along various parameters which include registering property, taxes, contracts, starting a business, training, dissemination, getting credit and trading across borders. These are the determinants employed by the World Bank to ascertain an economy's performance when it comes to the ease of doing business.
On the other hand, the smaller economies in Africa are doing extremely well as regards the ease of doing business. Mauritius has an impressive standing, being ranked number 20 out of 190. Mauritius is a clear sign of how consistent reforms over many years lead to a favourable business climate. Mauritius is the only African country in the top 20. It is interesting to note that since 2005, the time needed to register property in Mauritius has dropped more than 12-fold while time needed for business incorporation has also dropped nearly 10 times.
Top 10 African Nations for Doing Business
| Country | Global Rank | Score | |
|---|---|---|---|
| 1 | Mauritius | 20 | 79.58 |
| 2 | Rwanda | 29 | 77.88 |
| 3 | Morocco | 60 | 71.02 |
| 4 | Kenya | 61 | 70.31 |
| 5 | Tunisia | 80 | 66.11 |
| 6 | South Africa | 82 | 66.03 |
| 7 | Botswana | 86 | 65.40 |
| 8 | Zambia | 87 | 65.08 |
| 9 | Djibouti | 99 | 62.02 |
| 10 | Lesotho | 106 | 60.60 |
Starting a business continues to be the most popular area of reform when it comes to ease of doing business. But another key element is the issue of contracts and their enforcement. Africa's most improved economies in the ease of doing business include Cote d'Ivoire, Rwanda, Togo, and Kenya. The economies of Sub-Saharan Africa were the most active in reforming their regulatory frameworks in 2017/18.
Mauritius enjoys a favourable position with economies from North America, East Asia, and Pacific, Europe and the Middle East; a diversity which the World Bank hails. For the World Bank, this is evidence that any country can record reforms in ease of doing business "as long as it has few bureaucratic hurdles and strong laws and regulation."
However, business reforms need to be widespread on the rest of the continent and be deeply pervasive. There needs to be a more uniform improvement in terms of the implementation of the key reforms such as digitization, taxes, and accessing tax-related paperwork. Sub Saharan African economies currently score "significantly lower" on average in all areas than most high-income economies.
There is still more pressing need for African countries to be competitive globally. The successes recorded so far need to continue being worked on and further cemented, to create more avenues for the ease of doing business.
Header Image credit: Afrique Times