In its 13th series, World Bank’s annual “Doing Business 2016” report presents an investigation into world’s economies and regulations that enhance or constrain business activity.
Doing Business provides investors and entrepreneurs across the world with information of 189 economies. It gives a deeper look into business reforms such as regulations and governance, indicators which it says “have huge long-run implications for an economy’s health, performance and growth,” although these (indicators) are not as obvious as macroeconomic ones.
The report titled, “Measuring Regulatory Quality and Efficiency”, presented data on these countries focusing on 10 areas of regulation 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.
Speaking on regulations, the report notes that “Without the rules that underpin their establishment, operation and dissolution, modern businesses cannot exist. And where markets left to themselves would produce poor outcomes, well-designed regulation can ensure outcomes that are socially optimal and likely to leave everyone better off.” The report adds that regulations “can lead to fairer outcomes by correcting for imbalances in power between different players.”
Using this analysis, below are Africa’s best countries you should consider to start or expand your business this year.
Mauritius
Standing at number one in Africa is Mauritius taking position 32 in the global market ranking. Using its strategic geographic location, Mauritius has made some reforms like those ‘dealing with construction permit’ which has pushed the country 39 ranks up globally.
In 2014/15, 17 economies among them Mauritius, streamlined internal review processes for building permit application. This in turn made the process faster and efficient for establishing businesses in the country.
Mauritius reduced the time dealing with the permits through hiring of a more efficient subcontractor to establish sewerage connections. Additionally, it is possible to pursue this process simultaneously with another procedure.
Other qualities that make the nation a better option for business this year include the fact that it takes 14 days to register a property, 6 days to start a business, and 81 days to get electricity.
Over the years, Mauritius has taken dominance in the African rankings for its competitive approaches in matters regulation and taxation.
Rwanda
Rwanda remains the best performing country in the East African region besides being 2nd easiest destination to do business in Sub-Saharan Africa according to the report.
Taking position 62 in the global ranking, Rwanda has seen implementation of some reforms that have kept it afloat in the competitive economy.
In the period under review, the East African nation made notable improvements for resolving insolvency and for protecting minority investors. In Africa, Rwanda dominates when it comes to ease of starting and registering a business.
The report was launched in the country by the Manager of World Bank’s Doing Business, Rita Ramalho last year. According to Ramalho, Rwanda excelled on the indicator of registering property where it garnered 25 out 30 points.
When it comes to ease of getting credit, Rwanda was ranked second best globally after Georgia and remained on top of the list in Africa.
In comparison to Mauritius, it will take up to 32 days to register a property, 5days to start a business, and 34 days to get electricity.
Botswana
Political stability provides good ground and stimulus for investment, and Botswana has managed to remain politically stable over the years.
This, and the fact that it is among world’s least corrupt countries has made the nation a better location to do business.
Botswana is ranked 3rd in Africa after the decline in ranking by South Africa. However, it stands at position 72 in the global ranking.
For those looking at electricity supply as a requirement for business, then Botswana is the place to be this year.
In comparison to the first two countries, registering a business will take 12 days, starting a business takes 48 days, while getting electricity takes up to 77 days.
Below is the overview and ranking of all African countries:
Note: The rankings are benchmarked to June 2015 and based on the average of each economy’s distance to frontier (DTF) scores for the 10 topics included in this year’s aggregate ranking. For the economies for which the data cover two cities, scores are a population-weighted average for the two cities.
Image Credit: How Africa