Africa leads assault on business regulation

Africa leads assault on business regulation

For decades, doing business in Africa was synonymous with overbearing regulation, meddlesome bureaucrats and corruption.

According to the World Bank’s Doing Business 2016 report, that unwanted reputation is finally beginning to shift.

Sub-Saharan Africa accounted for 30% of the worldwide regulatory reforms that made it easier to do business in 2014/15, according to this year’s report.

African countries took half of the places in the top 10 most improved performers this year, with Uganda, Kenya, Senegal, Benin and Mauritania leading the way on efforts to create a more business-friendly environment.

The top 10 were singled out for improvements around starting a business, getting credit and electricity, and registering property. The top African countries were also praised for streamlining company registration processes.

Rwanda continues to burnish its business-friendly reputation, drawing praise for making reforms in all of the areas measured by Doing Business, particularly property registration and the availability of credit.

The country is ranked as the second-most improved in the world over the 12-year lifespan of Doing Business, narrowly being beaten to the top spot by Georgia. Sub-Saharan Africa stands as the second most improved region over the same period. 

The report highlights the important role played by the Organization of the Harmonization of Business Law in Africa, an initiative adopted by 17 West and Central African states, which it says has made significant progress on removing regulatory barriers.

Fourteen of its member states implemented a combined 29 business regulation reforms over the past year. Of those reforms, 24 targeted regulatory costs and complexity, while five strengthened legal institutions.

Since 2006, the organisation has reduced business start-up times by 60% and property registration times by 25%. The overall cost of starting a business, registering property and dealing with construction permits in the region has fallen by 68%.

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Written by David Thomas

David Thomas is deputy editor at African Business Magazine. He has also been published in the Financial Times, the Wall Street Journal, the Economist and South Africa's Cape Times.

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