Nation Reporter
7 September 2006
Nairobi — Kenya emerges amongst leaders when it comes to ease of doing business in the Common Market for Eastern and South Africa (Comesa) but comes out badly on a global scale.
A freshly issued report of the World Bank and its private sector arm, International Finance Corporation (IFC), puts Kenya at number three in the regional trading bloc that is planning to launch a customs union by 2008.
The report, Doing Business 2007: How to Reform, puts the country 83 overall, well below Mauritius at 32 and Swaziland at 76 respectively. Singapore is the easiest country to do business on the globe with volatile DR Congo worst off.
Doing business became easier in Africa in 2005Ð2006," said a statement from the Bretton Woods sent to newsrooms yesterday. Ironically, the report picks out at the controversial Simba 2005 implemented by the Kenya Revenue Authority (KRA) as part of the positive reforms in the country.
"Kenya replaced its paper-based customs administration with an electronic data interface system. Traders can electronically submit their customs declarations and pay for customs duties on-line," said the statement quoting the report. "Importing sped up by seven days as a result. Kenya also eliminated 26 licensing requirements for businesses, with a proposed cut of 92 more."
Tanzania, the tenth-ranked reformer worldwide, did much better, reducing the cost to register new businesses by 40 per cent through a reduction in licensing requirements. It similarly introduced a new electronic customs clearance system and implemented risk-based inspections of cargo to cut turnaround time.
Customs clearance times dropped from 51 to 39 days for imports and 30 to 24 days for exports. Tanzania also cut fees associated with transferring property by three per cent and revised its company law to better protect small investors. For the first time, Africa made the top three among reforming regions, after Eastern Europe and the OECD countries.
Forty-five regulatory reforms in 30 economies in the region substantially reduced red tape. Two-thirds of African countries made at least one reform. "Such progress is sorely needed. African countries would greatly benefit from new enterprises and jobs, which can come with more business-friendly regulations," said Michael Klein, World Bank-IFC vice president for finance and private sector development and IFC chief economist.
Two African countries, Ghana (9) and Tanzania, made the list of top 10 reformers on the ease of doing business across 175 economies.
Top 10 reformers were Georgia, Romania, Mexico, China, Peru, France, Croatia, Guatemala, Ghana, and Tanzania. Reformers simplified business regulations, strengthened property rights, eased tax burdens, increased access to credit, and reduced the cost of exporting and importing.
Doing Business 2007 also ranks 175 economies on the ease of doing business - covering 20 more economies than last year's report. The top-ranked countries in Africa are South Africa (29), Mauritius (32), and Namibia (42).
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