Sub-Saharan Africa Implements the Most Business Regulatory Reforms Worldwide

Washington, D.C: A new World Bank Group report finds that Sub-Saharan Africa had the highest number of business regulatory reforms globally in 2013/14, with 74 percent of the region’s economies improving their business regulatory environment for local entrepreneurs.

Released today, Doing Business 2015: Going Beyond Efficiency finds that Benin, the Democratic Republic of Congo, Côte d’Ivoire, Senegal, and Togo are among the 10 top improvers worldwide, having improved business regulation the most in the past year among the 189 economies covered. Since 2005, all countries in the region have improved the business regulatory environment for small and medium-size businesses, with Rwanda implementing the most reforms, followed by Mauritius and Sierra Leone.

 The report series shows that over the past five years, 11 different Sub-Saharan African countries have appeared on the annual list of the 10 global top improvers. Some have done so multiple times, such as Burundi, Cabo Verde, Côte d’Ivoire, and Rwanda.

 “Sub-Saharan African economies have come a long way in reducing burdensome business regulations,” said Melissa Johns, Advisor, Global Indicators Group, Development Economics, World Bank Group. “Our data show that Sub-Saharan Africa accounts for the largest number of regulatory reforms making it easier to do business in the past year, with 75 of the 230 documented worldwide. Yet despite broad regulatory reform agendas, challenges persist in the region, where business incorporation continues to be costlier and more complex on average than in any other region.”

 Kenya improved its credit information system by passing legislation that allows the sharing of both positive and negative credit information and establishes guidelines for the treatment of historical data. However, it made dealing with construction permits more costly by increasing the building permit fees. And it made paying taxes more costly for companies by increasing employers’ social security contribution rate.

Kenya is ranked 136th globally in the ease of doing business ranking.

 This year, for the first time, Doing Business collected data for a second city in the 11 economies with a population of more than 100 million. In Nigeria, the report now analyzes business regulations in Kano as well as in Lagos.

 The report this year also expands the data for three of the 10 topics covered, and there are plans to do so for five more topics next year. In addition, the ease of doing business ranking is now based on the distance to frontier score. This measure shows how close each economy is to global best practices in business regulation. A higher score indicates a more efficient business environment and stronger legal institutions.

 The report finds that Singapore tops the global ranking on the ease of doing business. Joining it on the list of the top 10 economies with the most business-friendly regulatory environments are New Zealand; Hong Kong SAR, China; Denmark; the Republic of Korea; Norway; the United States; the United Kingdom; Finland; and Australia.