INVESTMENT CLIMATE AFRICA
Reform trends on the ease of Doing
Business in Sub-Saharan Africa
Cemile Hacibeyoglu
Trade and C...
Doing Business indicators:
 Focus on regulations relevant to the life cycle
of a small to medium-sized domestic business....
3
Doing Business measures 11 areas of business regulation (10
included in the DB2014 ranking, covering 189 economies)
3
4
Mauritius is among top 30 economies on the ease of
doing business in 2012/13
The classification of sub-Saharan African economies on the
overall ease of Doing Business in 2012/13
Rankings (1 – 189)
5
2009 2010 2011 2012 2013 2014
No. of reforming
countries
28 29 27 36 28 31
No. of reforms 58 67 49 75 44 66
Countries in t...
Pace of reforms remains strong in 2012/13: share of
economies with at least one reform making it easier to do
business
 W...
With a total of 66 reforms, 28 economies in Sub-Saharan
Africa improved business regulations this year
8
Reforms reducing regulatory complexity and cost
continued to be more common in 2012/13
9
10
The time to open a business has fallen from 55 days to 30 days
Sub-Saharan Africa is the region that has shown the most...
Indicator variability across areas of business regulation in some of
the best performing Sub-Saharan African economies
11
Indicator World’s top ranked Sub-Saharan’s top ranked
Starting a business New Zealand
Rwanda (9)
Mauritius (19)
Dealing wi...
Four African economies are among the 10 economies that
improved the most in at least three areas assessed by Doing
Busines...
14
The top 20 economies improving the most over the past 5
years - 9 of them in Sub-Saharan Africa
Distance to frontier (p...
The 50 economies narrowing the distance to frontier
the most since 2005 – 18 of them in Sub-Saharan Africa
Note: Rankings ...
Strategy for successful reform
• Leadership at the highest political level
• Long-term vision and clear targets
• Appropri...
IFC Investment Climate in Africa
 IC Africa has grown its project portfolio
by 45% a year between 2006 and 2013.
 The co...
IFC Investment Climate in Africa
Sources: Advisory services operations portal data. Notes: Kenya data does not include new...
IC in Africa
IC reform and competitiveness
 A vibrant private sector drives economic growth and employment.
Supporting th...
Thank you
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Session 2 ppt 1 edbi j mathekga last

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Session 2 ppt 1 edbi j mathekga last

  1. 1. INVESTMENT CLIMATE AFRICA Reform trends on the ease of Doing Business in Sub-Saharan Africa Cemile Hacibeyoglu Trade and Competitiveness Practice The World Bank Group Maputo, June 30, 2014 1
  2. 2. Doing Business indicators:  Focus on regulations relevant to the life cycle of a small to medium-sized domestic business.  Are built on standardized case scenarios.  Are measured for the most populous city in each country.  Are focused on the formal sector. DOES NOT measure all aspects of the business environment such as macroeconomic stability, corruption, level of labor skills, proximity to markets, or of regulation specific to foreign investment or financial markets. 2 What does Doing Business measure? 2
  3. 3. 3 Doing Business measures 11 areas of business regulation (10 included in the DB2014 ranking, covering 189 economies) 3
  4. 4. 4 Mauritius is among top 30 economies on the ease of doing business in 2012/13
  5. 5. The classification of sub-Saharan African economies on the overall ease of Doing Business in 2012/13 Rankings (1 – 189) 5
  6. 6. 2009 2010 2011 2012 2013 2014 No. of reforming countries 28 29 27 36 28 31 No. of reforms 58 67 49 75 44 66 Countries in top 10 3 2 3 4 1 4 Senegal, Burkina Faso, Botswana Liberia, Rwanda Rwanda, Cape Verde, Zambia Sao Tome Principe, Cape Verde, Sierra Leone, Burundi Burundi Rwanda, Djibouti, Cote d’Ivoire, Burundi Top SSA country rank 24 20 20 23 19 20 Mauritius Mauritius Mauritius Mauritius Mauritius Mauritius Sub-Saharan Africa’s progress over the years for Sub- Saharan Africa in Doing Business  Every year about 30 countries in SSA have undertaken at least one Doing Business reform, with the region usually accounting for 3 of the world’s top 10 reformers. 6 Booking Doing Business reforms (Annual reform and country count for SSA) Rwanda top global reformer Rwanda top global reformer ever; South Sudan included Record no. of SSA countries Sources: Internal WB-IFC documents, www.doingbusiness.org. Note: SSA total reform count for 2012 pending confirmation.
  7. 7. Pace of reforms remains strong in 2012/13: share of economies with at least one reform making it easier to do business  Worldwide, 114 economies implemented 238 reforms in 2012/2013, 18% rise with respect to 2011/2012.  66% of Sub-Saharan economies reformed in 1 or more areas of business regulation in 2012/13 66% 40% 75% 73% Latin America and the Caribbean OECD high Income Europe and Central Asia Middle East and North Africa South Asia East Asia and Pacific Sub-Saharan Africa 7
  8. 8. With a total of 66 reforms, 28 economies in Sub-Saharan Africa improved business regulations this year 8
  9. 9. Reforms reducing regulatory complexity and cost continued to be more common in 2012/13 9
  10. 10. 10 The time to open a business has fallen from 55 days to 30 days Sub-Saharan Africa is the region that has shown the most improvement in reducing the time to start a business 10
  11. 11. Indicator variability across areas of business regulation in some of the best performing Sub-Saharan African economies 11
  12. 12. Indicator World’s top ranked Sub-Saharan’s top ranked Starting a business New Zealand Rwanda (9) Mauritius (19) Dealing with construction permits Hong Kong SAR (China) South Africa (26) Namibia (31) Getting electricity Iceland Mauritius (48) Rwanda (53) Registering property Georgia Rwanda (8) Sudan (41), Botswana (41) Getting credit Malaysia / United Kingdom Kenya (13), Nigeria (13), Rwanda (13), Zambia (13) Ghana (28), South Africa (28) Protecting investors New Zealand South Africa(10) Mauritius (12) Paying taxes United Arab Emirates Mauritius (13) Seychelles (19) Trading across borders Singapore Mauritius (12) Seychelles (29) Enforcing contracts Luxembourg Cape Verde (35) Rwanda (40) Resolving insolvency Japan Botswana (34) Mauritius (61) Several Sub-Saharan economies rank highly in numerous areas of business regulations 12
  13. 13. Four African economies are among the 10 economies that improved the most in at least three areas assessed by Doing Business in 2012/13 13 Ease of Doing Business rank Starting a Busines s Dealing with constructi on permits Getting electricity Registering property Getting credit Protecting investors Paying taxes Trading across borders Enforcing contracts Resolving insolvency 1 Ukraine 112 √ √ √ √ √ √ √ √ 2 Rwanda 32 √ √ √ √ √ √ √ √ 3 Russian Federation 92 √ √ √ √ √ 4 Philippines 108 √ √ √ 5 Kosovo 86 √ √ √ 6 Djibouti 160 √ √ √ 7 Côte d’ Ivoire 167 √ √ √ √ 8 Burundi 140 √ √ √ √ √ √ 9 Macedonia, FYR 25 √ √ √ √ √ √ 10 Guatemala 79 √ √ √
  14. 14. 14 The top 20 economies improving the most over the past 5 years - 9 of them in Sub-Saharan Africa Distance to frontier (points of percentage) Economy Region 2009 2013 Improvement (percentage points) 1 Ukraine ECA 43.3 58.4 15.2 2 Burundi SSA 35.3 48.9 13.6 3 Belarus ECA 53.5 65.6 12.1 4 Sierra Leone SSA 40.1 52.2 12.1 5 Guinea-Bissau SSA 34.3 45.8 11.4 6 Rwanda SSA 60.8 71.1 10.3 7 Kosovo ECA 55.3 65.0 9.8 8 Russian Federation ECA 52.9 61.9 9.1 9 Macedonia, FYR ECA 65.1 74.1 9.0 10 Poland OECD 63.1 72.0 8.9 11 Armenia ECA 60.4 68.2 7.8 12 Georgia ECA 73.6 81.1 7.5 13 Togo SSA 42.3 49.7 7.3 14 Solomon Islands EAP 54.2 61.5 7.3 15 Benin SSA 39.0 46.2 7.2 16 Liberia SSA 44.5 51.6 7.1 17 Moldova ECA 57.5 64.5 7.0 18 Malaysia EAP 74.9 81.9 7.0 19 Côte d'Ivoire SSA 43.1 50.1 7.0 20 Guinea SSA 36.7 43.7 6.9
  15. 15. The 50 economies narrowing the distance to frontier the most since 2005 – 18 of them in Sub-Saharan Africa Note: Rankings are based on the difference for each economy between its distance to frontier in 2005 and that in 2013. The data refer to the 174 economies included in Doing Business 2006 (2005). Fifteen economies were added in subsequent years. The distance to frontier measure shows how far on average an economy is at a point in time from the best performance achieved by any economy on each Doing Business indicator since 2003 or the first year in which data for the indicator were collected. The measure is normalized to range between 0 and 100, with 100 representing the frontier. EAP = East Asia and the Pacific; ECA = Europe and Central Asia; LAC = Latin America and the Caribbean; MENA = Middle East and North Africa; OECD = OECD high income; SAS = South Asia; SSA = Sub-Saharan Africa. a. Reforms making it easier to do business as recorded by Doing Business since 2005. 15
  16. 16. Strategy for successful reform • Leadership at the highest political level • Long-term vision and clear targets • Appropriate structure (steering committee, technical taskforce) • Broad but realistic program of improvement of the business environment • Coherent reform efforts, year after year: “start with quick wins and build on demonstrable effects” • Clear definition of responsibilities among implementing agencies • Follow-up, communication strategy and training Key aspects of success in the reform process 16
  17. 17. IFC Investment Climate in Africa  IC Africa has grown its project portfolio by 45% a year between 2006 and 2013.  The country and product focus has been varied:  75% of total expenditure is spread across 12 countries  The product portfolio is widely spread, with business regulation and infrastructure /social sectors accounting for the largest share. Sources: Advisory services operations portal data. Notes: Kenya data does not include new project starting in 2013; country and product data includes projections to 2016. Rapid growth (IC Africa expenditure, 2006-13; US$) Country focus (IC Africa expenditure, 2006-16; US$) Product focus (IC Africa expenditure, 2006-16; US$) 17 CAGR 45%
  18. 18. IFC Investment Climate in Africa Sources: Advisory services operations portal data. Notes: Kenya data does not include new project launched in 2013. IDA countries defined as having GNI per capita of less than $1,195 in 2013. Sudan Algeria Niger Angola Zambia Botswana Madagascar Mauritius Seychelles South Africa Namibia Morocco Mauritania Lybia Egypt Chad Mali Nigeia Ethiopia Eritrea Somalia Democratic Republic of the Congo Central African Rep. Tanzania Kenya Mozambique Rep. of the Congo Uganda Liberia Ivory Coast Ghana Camer- oon Gabon Equatorial Guinea Guinea Gambia Sierra Leone Tunisia Guinea-Bissau Togo Benin Lesotho Swaziland Zimbabwe Malawi Djibouti South Sudan Investment climate program expenditure SSA quintile and approx range 1st , $5-10m 5th , <$250K 4th , $250k-1m 3rd , $1-2.5m 2nd , $2.5-5m  In FY 13 IC Africa supported reform efforts in 36 countries:  18 Fragile and Conflict- Affected Situations (FCS)  31 International Development Association (IDA)  3 non-IDA.  In addition there are 5 regional programs:  Health in Africa  East African Community  OHADA (Organization for the Harmonization of Business Law in Africa)  Indicator Based Reforms  IC Power  In FY 13 there were 61 projects at various stages of implementation. Burkina Faso Rwanda Burundi Comoros Senegal Cape Verde Sao Tomé and Principe Continental spend (Total project expenditure by country, 2006-16) Collaboration with WB 18
  19. 19. IC in Africa IC reform and competitiveness  A vibrant private sector drives economic growth and employment. Supporting this growth requires price liberalization and macroeconomic stabilization programs, against which considerable progress has been made over the past two decades.  Beyond this, the quality of laws, regulations and institutions that effect businesses are key, particularly as economies strive to move from factor to efficiency-driven growth.  This is the major focus of the World Bank Group’s Investment Climate (WBG-IC) reform efforts, many of which have focused on reforms as captured by the Doing Business index. Factor-driven economies  Pillar 1. Institutions  Pillar 2. Infrastructure  Pillar 3. Macroeconomic environment  Pillar 4. Health and primary education Efficiency-driven economies  Pillar 5. Higher education and training  Pillar 6. Goods market efficiency  Pillar 7. Labor market efficiency  Pillar 8. Financial market development  Pillar 9. Technological readiness  Pillar 10. Market size Innovation-driven economies  Pillar 11. Business sophistication  Pillar 12. Innovation Pillars of competitiveness (GCR focus areas) DB as a litmus test of deeper competitiveness performance (Correlation between DB and GCI rankings, 0.82) DB ranking GCIranking Sources: World Bank, “Doing Business 2012,” 2012; WEF/WBG/AfDB, “Africa Competitiveness Report 2013,” 2013. Note: Global Competitiveness Report/Index 19
  20. 20. Thank you

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