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Rwanda rebounds in doing business ranking

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Workers packaging water at Inyange Industries in Kigali, Rwanda

Once again Rwanda has recorded improvement in its global ease of doing business ranking. It is the sixth year in a row that Rwanda is maintaining a high ranking in the World Bank index which rates countries on how easily a business can be set up and how it is protected after it has been set up.

In 2009, Rwanda was ranked at 143 but it has been improving dramatically since it jumped 73 places to earn the 70th place in 2011. In the latest survey, the 2017 World Bank’s Ease of Doing Business, Rwanda moved up six positions to 56 out of 190 economies.

That is still lower than the 50 and 52 rank it held in 2012 and 2013 respectively but several notches higher than the 62 rank of last year.

The improved performance, according to the report, is hinged on the improved online business registration and streamlined post-registration procedures, a scenario that has eased to start and operate the businesses.

In the same vein, property registration was made easier through the introduction of effective time limits and increased transparency of the land administration system as well as removed mandatory pre-shipment inspection for imported products which significantly reduced multiple requirements and steps for cargo clearance.

Rwanda also introduced an electronic case management system for judges and lawyers for enforcing contracts.

The 2017 release is the 14th edition of a series of the global bank’s annual reports that examines the regulations and conditions that enhance business conduciveness around the world.

The World Bank Doing Business survey focuses on several aspects that facilitate business including; the ease of starting a business, obtaining construction permits, access to electricity, registering property, access to  credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts,  and resolving insolvency.

However, in all the indicators that the Rwanda was subjected to during the survey, accessing credit, registering property as well as  starting a business, registered rapid improvement during the year while resolving insolvency, protecting minority investors, and dealing with construction permits remained a big challenge.

Commenting on the new ranking, the Chief Executive Officer of the Rwanda Development Board, Francis Gatare said the east African country has over the past two years focused on optimizing the service industry and capitalizing on investment opportunities that promote long term sustainable growth.

“Rwanda continues to harness the role of the private sector in accelerating economic growth to make the country even much easier in conducting business,” Gatare told Chinese news agency Xinhua.

“We will therefore continue to stretch our borders and ensure that strengthening the regional economy is at the center of Rwanda’s sustainable development making Africa an investment hub as a whole.”

The authors of the report said government plays a crucial role in providing conducive environment for the growth of businesses.

“Government policy plays a huge role in the daily operations of domestic small and medium-sized firms and onerous regulation can divert the energies of entrepreneurs away from developing their businesses or innovating,” said Augusto Lopez-Claros, the director of the World Bank’s Global Indicators Group. “This is why we collect the Doing Business data, to encourage regulation that is designed to be smart, efficient, accessible, and simple.”

Throughout the African continent, however, Rwanda ranked the second easiest place to do business, behind Mauritius that ranked the first on the continent and 49th globally.  Morocco ranked 75 from 68 last year, Botswana 72 from 71 last year, and South Africa at 73 from 74 last year.

In East Africa, Rwanda ranked the best in the ease of doing business, the position it has held in the past five years while Burundi has lagged behind in implementing business reforms to ease cost of doing business during the same period.

Kenya, the second best performer in the region, was ranked position 92 compared with 108 last year, 121 in 2013 and 109 in 2012. Uganda ranked 115, up from 122 last year, 120 in 2013 and 123 in 2012.

On the hand, Tanzania moved seven positions to 132, up from 139 last year.  In 2013, Tanzania ranked 134 compared with 127 in the previous year.

However, top ten countries with conducive environment to do business includes; New Zealand, Singapore, Denmark, China, Korea, Norway, United Kingdom, United States, Sweden, and Macedonia

More than 75% of regulatory reforms were implemented in 2015/16 by developing countries, according to the report. Sub-Saharan Africa implemented 80 regulatory reforms in the past year, with six reforms implemented in Niger and five – in Kenya only.

Since the inception of Doing business report in 2004, more than 2,900 regulatory reforms have been recorded, making it easier to do business.

 

Ranking of EAC Countries in the World Bank’s ease of doing business report

Country/Year 2011/12 2012/2013 2013/14 2014/15 2015/16
Rwanda 45 50 52 62 56
Kenya 106 109 121 108 92
Uganda 119 123 120 122 115
Tanzania 125 127 134 139 132
Burundi 117 169 159 152 157

 

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