Rwanda led the Sub-Saharan Africa region in all the three pillars of the World Bank's inaugural Business Ready report which assessed the business and investment climate of 50 economies globally.
The survey, which replaces Doing Business, looks at three main aspects that measures a country's business climate, including the quality of regulations, effectiveness of public services such as electricity and tax administration as well as operational efficiencies.
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The report also measures ten indicators, which include business entry, business location, utility services (water, electricity, and internet), labour force, financial services (access), international trade, taxation, disputes resolution, market competition (public procurement), and business insolvency.
The new report indicates that economies tend to perform better at enacting regulations to improve the national business climate than they do in providing the public services needed to secure actual progress.
However, despite the sizeable implementation gap, the latter shrinks when the quality of regulations improves.
The authors of the report noted that while wealthier economies tend to be more business-ready, a country needs not be wealthy to create a good business environment.
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Norman Loayza, director of the World Bank's Global Indicators Group highlighted Rwanda's performance at the launch, noting that the country has doubled the size of its economy and its Foreign Direct Investment (FDI) inflows over the past decade.
Rwanda's performance
Rwanda is among the top performers in several key areas, a move officials said reflects the country's sustained drive to enhance its business environment and foster a "welcoming climate" for investors.
According to the outlook, the country achieved the third spot globally scoring 81.31 in operational efficiency.
Rwanda also achieved the eighth spot globally with a score of 67.37 in public services, and a 17th spot globally in regulatory framework. This positions Rwanda as one of the top-performing countries globally and in Sub-Saharan Africa.
The breakdown
The World Bank report indicated that Rwanda remains one of the fastest countries in Africa and globally for company registration. This efficiency stands in contrast to global averages of 32 days for domestic firms and 39 days for foreign firms.
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The report also hailed the country's digitisation of public services as a key driver of its strong performance, thanks in large part to systems like the Integrated Electronic Case Management System (IECMS) for the judiciary and the e-titles system for land services.
It commended the country's legal reforms, which continue to enhance its global competitiveness.
The World Bank noted that recent legislative efforts, including the 2021 Investment Promotion Law, the Company Law, and the Insolvency Law, have created a more business-friendly regulatory environment in the country.
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The country's commercial courts and streamlined processes for business registration and dispute resolution set benchmarks for the region.
The report highlighted Rwanda's leadership in integrating environmental sustainability into its business practices.
Key reforms in the country include free online business registration, automated tax filing, and payments, and one-stop center services for business permits and licenses.
Others include support for foreign ownership and ease of profit repatriation, among others.
Way forward?
Speaking at the launch of the report, Francis Gatare, the chief executive of the Rwanda Development Board (RDB), maintained that as Rwanda builds on these achievements, efforts are underway to further improve the country's business environment.
Ongoing initiatives include the digitisation of the one-stop center, upgrades to business and mortgage registration systems, and the integration of trade services under a Single Transaction Portal.
"Rwanda's performance in the B-READY report reflects our unwavering commitment to creating a conducive environment for private sector growth and investment."
"These reforms are the foundation of our socioeconomic transformation, and we will continue to prioritize innovation, sustainability, and efficiency to attract investment and grow the private sector," he pointed out.
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From 2003 until 2023, Gatare pointed out that Rwanda has seen private capital contribute to the economy growing 14 times.
"We have seen the personal incomes grow on a compound growth rate of 11 percent on average and we are seeing that continue to be the impact, thanks to the growth of private capital on our economy," Gatare said.
Overall, economies in the top quintile perform well across multiple pillars,
often ranking highly across various topics.
For instance, Estonia scores in the top quintile of economies in 7 of the 10 topics, and Rwanda scores in the first quintile in 6 of the 10 topics.
"This strong performance across pillars showcases the broad strengths of these economies, although it also reveals specific areas where further improvements could enhance their overall competitiveness."
Rwanda was the only low-income economy in the top quintile. Colombia was also the only upper-middle-income economy in the quintile, while the rest of the top quintile were high-income economies.
