9 June 2014

East Africa: Burundi Deserves Praise On Red Tape

Excessive bureaucracy is every business person's nightmare. To their credit, the East African Community (EAC) governments are very aware of this and have been making urgent efforts to ease the burden.

The regional Presidents themselves have been forthright in their public statements over the issue. They stress the importance of the private sector to boost economic growth and tame runaway unemployment levels.

Recently, Burundi reported that someone can register a new business in one day by going through just one procedure. This is bound to improve the country's ranking in the annual Doing Business Survey and attract interest from foreign investors.

Burundi has been able to achieve this significantstep by getting some technical assistance from the International Finance Corporation, who also happen to be the main people behind the Doing Business Survey.

They say time is money. Therefore any time spent in filling out endless forms and waiting for officialdom to reach decisions, is time wasted. Time that could otherwise be used in more productive activities than lining up in a slow moving queue.

In the past, business growth in the region was hampered by too much bureaucracy. Many days were characterised by being tossed about between different offices and making appointments with officials who seemed far more concerned about the power that they held rather than helping you with your problems. That in itself was a big turn-off for business people and especially start-ups, because corruption then becomes inevitable. Frequently, there was also a mish mash of procedures and excessive paperwork, all which conspired to dampen any enthusiasm one had in getting their project off the ground.

Small businesses have long complained about the amount of bureaucratic legislation they have to understand and comply with. The wide variety of legislation, which is inevitable accompanied by detailed form-filling (in triplicate), often kills morale.

To be sure, the situation in some cases is still pretty frustrating, but the move towards improving things is also there to see. The trend today is towards making things as simple as possible.

Burundi has showed some great innovation by eliminating the clutter. Many business people using borrowed money would appreciate a one day procedure.

Cutting red tape and streamlining processes provides many benefits for citizens, business and government but when it comes right down to it, the main objective is to save valuable money and time

However the bureaucratic quagmire and slow processing can lead to the demise of many companies relying borrowed funds.

Burundi should once again be congratulated and even perhaps become a benchmark for other EAC countries. It has been shown that economies with the least bureaucracy tend to grow much faster.

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