African business regulations improved

African, business, regulations, improved, sub-saharan, Burundi, Liberia, Sierra Leone, Mauritius, World BankNew report from IFC and the World Bank finds that record number of economies in Sub-Saharan Africa improved business regulations for local entrepreneurs in the past year

'Doing Business 2012: Doing Business in a More Transparent World' was released recently and assesses regulations affecting domestic firms in 183 economies, ranking the economies in 10 areas of business regulation, such as starting a business, resolving insolvency, and trading across borders. This year, the rankings on ease of doing business have expanded to include indicators on getting electricity.

The pace of regulatory improvements has picked up across Sub-Saharan Africa. Six years ago, a third of Sub-Saharan African economies made improvements to the regulatory climate for domestic firms. Between June 2010 and May 2011, 36 of 46 governments in the region implemented reforms in at least one of the 10 areas measured by the report.



“Entrepreneurship is constrained when regulation is too complex or onerous,” said Augusto Lopez-Claros, Director, Global Indicators and Analysis, World Bank Group. “With their impressive improvements this year, the governments of Sub-Saharan Africa are improving prospects for local businesses.”

For the fourth year in a row, Mauritius was the easiest place in Sub-Saharan Africa for an entrepreneur to do business, with a global rank of 23. By implementing reforms in areas such as paying taxes, getting credit, starting a business, dealing with construction permits, registering property, and resolving insolvency, São Tomé and Príncipe, Cape Verde, Sierra Leone and Burundi are among the region’s most-improved economies for entrepreneurs.


Burundi, Liberia, and Sierra Leone

“Post-conflict economies such as Burundi, Liberia, and Sierra Leone are among those that have implemented broad regulatory reforms,” said Sylvia Solf, lead author of the report. “They demonstrate that despite challenges, economies can move forward to encourage entrepreneurship.”

New data show that improving access to information on business regulations can aid entrepreneurs. In many Sub-Saharan African economies, getting essential information often requires meeting with an official, demonstrating that improving access to information remains one of the region’s areas for improvement.

Over the past six years, 43 economies in Sub-Saharan Africa have made their regulatory environment more business-friendly. Recently, steps have also been taken to improve business regulation through regional coordination to overhaul a body of harmonized commercial laws—a legal reform requiring consensus from the 16 member states of the Organization for the Harmonization of Business Law in Africa (OHADA).

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