The Independent (Kampala)

Uganda: Business Easier - World Bank

Doing Business Report 2013 puts Uganda ahead of Kenya in ease of doing of business:

It is now easier to do business in Uganda than it is in Kenya, according to a new report by the World Bank, but private sector leaders say it is not yet time to celebrate as major hurdles still hamper the business community in Uganda. According to the report titled, Doing Business 2013: Smarter Regulations for Small and Medium-Size Enterprises, Uganda - ranked 120th among 185 countries - is now the second-best country in ease of doing business in the region; but lies way behind top reformer Rwanda (52). Kenya (121) and Tanzania (134) follow. However, Burundi is credited for being one of the biggest improvers in the world, having jumped from 174 in 2008 to 169 last year to 159 this year.

According to an analysis by the Competitiveness and Investment Climate Strategy (CICS) Secretariat, this year's report surveyed 185 countries compared to 183 last year when Uganda was ranked 123rd out of 183 countries. When the country's ranking of last year is re-adjusted, it places Uganda in the 119th position out of 185 economies for the 2012 ranking, which means a slight decline. However, Uganda is credited for making it easier by digitizing records at the title registry, increasing efficiency at the assessor's office and making it possible for more banks to accept the stamp duty payment. Also, Uganda's ranking was boosted by the action to strengthen its insolvency process by clarifying rules on the creation of mortgages, establishing the duties of mortgagors and mortgagees, defining priority rules, providing remedies for mortgagors and mortgagees and establishing the powers of receivers.

However, private sector players are citing the recently released Global Competitiveness Report 2012-2013, which Uganda ranked 123 out of 144 economies - lower than 121st last year - as an indication that it not yet time to celebrate. In East Africa, Uganda's competitiveness - a measure of the ability of a company or a country to offer products and services that meet the quality standards of both local and international markets at prices that provide sufficient returns on investment - lags behind Rwanda as well as Kenya and Tanzania. On the other hand, the Doing Business Report basically focuses on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business while complying with relevant regulations.

New Ugandan entrepreneurs still have to go through a massive 15 procedures over a period of 33 days - one of the worst in the world. Comparatively, entrepreneurs in Rwanda go through less stress - with just two procedures and are able to complete the registration process within just three working days. The report encourages as few procedures as possible as a complex start-up process with many procedures allows more contact between new entrepreneurs and public officials--and thus more chances for bribery and other forms of corruption. Uganda had proposed a one-stop centre for new entrepreneurs but the plan is yet to be implemented.

Economies that rank high on the ease of doing business index tend to combine efficient regulatory processes with strong and efficient institutions. Similarly, simpler entry regulations encourage the creation of many more new firms and thus new jobs. The report found that the majority of countries in Sub-Saharan Africa are still bedeviled with weaker legal institutions and more complex and expensive regulatory processes, compared to developed economies, which have stronger legal institutions and simpler and less expensive regulatory processes. Several countries, including Rwanda are said to have used the Doing Business report over the years as a bench-marking resource for exposing potential challenges as well as identifying good practices and lessons learned.

In June, the CICS Secretariat published a report that showed that the country simplified the process of registering a company by going online and passed the Companies Act, which now recognizes sole-proprietor companies.

Indicator

Uganda

Kenya

Rwanda

Tanzania

Burundi

Mauritius

S.Africa

Overall/185 countries

120

121

52

134

159

19

39

African Region/46 countries

9

10

3

15

28

1

2

Starting a business

144

126

8

113

28

14

53

Dealing with construction permits

118

45

98

174

141

62

39

Getting electricity

127

162

49

96

164

44

150

Registering property

124

161

63

137

127

60

79

Getting credit

40

12

23

129

167

53

1

Protecting investors

139

100

32

100

49

13

10

Paying taxes

93

164

25

133

137

12

32

Trading across borders

159

148

158

122

177

15

115

Enforcing contracts

117

149

39

36

175

58

82

Resolving insolvency

69

100

167

129

161

64

84

(Source: Extracted from Doing Business 2013)

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