Nairobi — The World Bank has urged East African governments to speed up the reform of their business environment, in order to improve their global competitiveness and attract investment.

According to the Bank, the region is capable of attracting more investment than it is currently doing. Tanzania attracted investments worth $2.27 billion last year while Uganda registered $1.57 billion down from $2.4 billion the previous year.

It turns out that the "smaller economies" - Rwanda and Burundi - are reforming at a faster pace than their counterparts. For instance, the International Finance Corporation considers Rwanda the world's top reformer in doing business. Rwanda has moved up 76 places to the 67th spot out of 183 countries surveyed. It defied the global financial crisis and attracted a record $1.1 billion in investments last year, an increase of 41 per cent over its 2008 performance.

Rwanda's miracle storyThe huge investments were recorded despite Rwanda still having to grapple with the crippling factor of being landlocked. Its import and export route is mainly by air and the Northern Corridor to Mombasa port - which has logistical problems of its own.

But the highlight of Rwanda's reforms is its Company Law, which reduces registration of business from months to just three days.

"If we can tackle trade logistics issues, especially congestion and delays at the Mombasa port, we will achieve 37 per cent reduction in the number of days required to import," said Bernice Byamukama. Besides trade logistics, Rwanda is yet to overcome two critical challenges, namely land registration and tax administration.

Not to be outdone, Burundi also started on a business reform path recently, and has aligned most of its business laws with the East African Community's legal regime.

In addition, Burundi is developing its competition law in conformity with that of the EAC. And for good measure, the French speaking country is also planning to ease language barriers for potential investors.

"Business laws will be translated into English. We are in the process of enacting a new Company Law and once we have it, we shall reduce the time required to form an enterprise from 30 to five days," a Burundian official said.

Relevance of regulatory reforms

According to World Bank Uganda country manager Kundhavi Kadiresan, regulatory reforms across the region are more relevant now than ever before following the adoption in November last year of the Common Market Protocol. Investors will now expect ease of doing business and harmonised laws that guarantee the region's competitiveness to help its economies are to surpass the current level of investments.

In a follow up to last year's peer-to-peer reformers meeting in Arusha, the World Bank Group convened another meeting in Kampala recently to assess progress and how much ease has been created for businesses to operate in the region.

The Bank's experts say the region now requires more business-friendly regulation and faster legislation of business laws, preferably handled by the region's parliament. Reforms are also needed in tax payment systems, land registration and business licensing.