African business red tape easing

By Nqobile Ndlovu, Johannesburg Bureau, AND, http://business.andnetwork.com

Botswana has been declared the fourth easiest country in Africa for companies to conduct their businesses, this is according to a new report by the World Bank and the International Finance Corporation.

On the African continent, Botswana was behind South Africa, Mauritius and Namibia, and just ahead of Swaziland for ease of doing business. Zambia ranked 10th and Zimbabwe 29th out of the 45 African countries on the list. Worldwide Botswana placed 48th out of the 176 nations that were ranked.

Singapore topped the rankings for ease of doing business, and the Asian island nation was followed by New Zealand, the United States, Canada, Hong Kong and the United Kingdom.

The World Bank report also said doing business generally became easier worldwide in 2005/06.

"Two hundred and thirteen regulatory reforms in 112 economies reduced the time, cost, and hassle for businesses to comply with legal and administrative requirements," the bank said.

The report also found that Africa was reforming and ranked the region’s progress ahead of Asia, Latin America, and the Middle East.

"The report points out that in many economies the costs of doing business are so prohibitive that most entrepreneurs are forced to operate outside the formal economy," World Bank President Paul Wolfowitz said.

"The report is a critical tool for developing countries to determine where more reforms are needed," he added.

According to reports Africa, for the first time made it to the top-three among reforming regions, after Eastern Europe and the mostly-developed OECD countries with Tanzania and Ghana ranking among the top 10 reformers.

Georgia was judged to have made the most progress with reforms, and China also made progress, although it remains only the 93rd easiest country in which to do business.
In the past year, it reportedly cut red tape, reduced the amount of time firms must wait to incorporate and set up a credit database providing information about consumer loans.

Improving business regulation was crucial to job creation, the World Bank said, stressing that many important reforms were simple to implement and did not require major legislative changes, said the report.

More than 65 sub-Saharan countries made progress in at least one area, while Ghana and Tanzania pushed through a series of reforms providing greater protection for firms and improving the tax system.

But Zimbabwe was censured for making it more difficult for firms to take on workers, while Eritrea was criticized for banning all private firms from bidding for construction work.