Doing business in Africa is getting easier

According to Doing Business 2012: Doing Business in a More Transparent World, an annual report from the IFC and World Bank, a record number of African countries have taken decisive steps to encourage more local entrepreneurs to come into the formal economy over the past 12 months. Trade barriers have also been lowered. Liberia, Seychelles and Tanzania are the latest countries to accept customs declarations electronically. But, 21 of the bottom 30 countries in this year’s rankings are in Africa. Eleven countries implemented no reforms at all, while nine adopted policies that made things worse. In most African countries, getting access to essential information, such as what types of documents are needed to ship a container abroad or even what the fee schedule is, requires a meeting with an official. This can cause unnecessary delays and perhaps even open the door to improper payments, says the report. On the plus side, 15 countries lowered barriers to entry for new businesses; 23 facilitated access to credit; and seven made it easier to pay taxes. As a case in point, when the second Doing Business report was published in 2004, it took 153 days, 14 procedures, and a minimum capital equivalent to 14.5% of the country’s per capita income to start a business in Mozambique. Today it takes 13 days, nine procedures, and no minimum capital. Over the past year alone, 36 out of 46 countries (more than three-quarters) implemented reforms in at least one of the 10 areas measured by Doing Business. For the fourth year in a row, Mauritius was the easiest place in sub-Saharan Africa for an entrepreneur to do business. Ranking 23rd on the global scene, the island nation is followed by South Africa (35th place globally), Rwanda (45th), Botswana (54th), and Ghana (63rd place). South Africa ranks first globally on access to credit, and Rwanda is the world’s 8th best country when it comes to starting a business.