Kenya drops in World Bank business ranking

By James Anyanzwa

The business environment for entrepreneurs in the five economies of the East African Community (EAC) improved in 2010 and 2011.

This follows implementation of critical regulatory reforms in Burundi, Kenya, Rwanda, Tanzania, and Uganda, according to a new International Finance Corporation (IFC) and World Bank report.

The region’s governments implemented 10 regulatory reforms last year to improve the business environment and encourage entrepreneurship in the region.

But Kenya dropped three places from 106 to 109. Uganda dropped four places, from 119 to 123 while Tanzania dropped two places - from 125 to 127.

Burundi tops

The report finds that Burundi is among the top ten most improved economies worldwide in 2010-2011, with four regulatory reforms of dealing with construction permits, protecting investors, paying taxes, and resolving insolvency.

However, Rwanda, the top performer in the region, made the most progress over the past six years. Worldwide, it made the second-most progress.

Rwanda implemented 22 reforms, making it easier to do business across nine areas of regulation. It has undertaken ambitious land and judicial reforms, introduced new corporate, insolvency, civil procedure, and secured transactions laws.

Rwanda which jumped five places in the rankings on the ease of doing business - from 50 in the previous year to 45 has also streamlined and remodeled institutions and processes for starting a business, registering property, trading across borders, and enforcing a contract through the courts.

Burundi, which featured among the top 10 improved economies moved up eight places in the global ranking - from 177 to 169. According to the report titled, Doing Business in the East African Community 2012.

Kenya, Rwanda, Tanzania and Uganda from the EAC) have made it easier to start a business since 2003.

A popular trade facilitation reform among the EAC economies has been implementing electronic systems for customs declaration. Export time in the region dropped from an average of 40 days in 2006 to 29 days in 2011.

Regulatory reforms

Regulatory reforms like consolidation of different registration processes into one single point in Rwanda and Kenya simplified the registration process in the region.

To start a business in the EAC now requires an average of 10 procedures and costs an average of 55 per cent of income per capita — compared to 12 procedures and a cost of 140 per cent of income per capita 7 years ago, in 2005.