World Bank releases report on Doing Business in the East African Community 2010

Countries in East Africa generally show mixed results in Doing Business’s annual reports, but there are pockets of good practice that, if adopted by all countries in the region, would yield a very healthy business environment, according to Doing Business in the East African Community 2010.

Released on May 24, the 62-page report takes a close look at business regulations in Burundi, Kenya, Rwanda, Tanzania, and Uganda. These countries are members of the East African Community, an intergovernmental organization aiming to create a common market for the region.

The average rank of these five countries is 116 out of 183, ranging from Rwanda at 67th to Burundi at 176th (see table to right).

A closer examination shows areas were these economies actually shine: reforms have made Rwanda one of the fastest places in the world to start a business (11th overall), securing credit is very straightforward in Kenya (4th in the world), and Tanzania ranks well in enforcing contracts (31st).

These same countries, however, create complexities in other areas of business that hamper overall economic development. For example, Rwanda ranks dead last in terms of the time and cost of liquidating a business, and securing a construction permit is so complex in Tanzania (ranked 178th) that it takes 32 steps and 328 days -- and at a cost approximately 33 times per capita income.

If best practices in the region were adopted by all, how would these countries rank globally? A remarkable 12th overall. This is comparable to Thailand and ahead of Japan, Sweden and many other wealthy nations.

Doing Business in the East African Community 2010 was prepared as part of the EAC Investment Climate Program supported by the World Bank Group and the United Kingdom’s Department for International Development.

Source: www.doingbusiness.org