Rwanda tops EAC in Business Regulations for SMEs
A new IFC and World Bank report shows that the business environment for entrepreneurs in all five economies of the East African Community—Burundi, Kenya, Rwanda, Tanzania, and Uganda—improved in 2010-2011 yet Rwanda shines above all in terms of business regulation—thanks to critical regulatory business reforms that the country has implemented lately.
The report, released on Wednesday April 11, 2012, in Bujumbura, Burundi,- compares business regulations and identifies good practices across the EAC on the 11 areas covered by the World Bank Group’s annual Doing Business report.
The report, Doing Business in the East African Community 2012, shows that the five countries of the EAC implemented a combined 10 regulatory reforms across nine areas measured.
The report finds that Burundi is among the top ten most improved economies worldwide in 2010-2011, with four regulatory reforms: dealing with construction permits, protecting investors, paying taxes, and resolving insolvency.
Rwanda, the top performer in the region, made the most progress over the past six years. Worldwide, it made the second-most progress. Over that period, Rwanda implemented 22 reforms, making it easier to do business across nine areas of regulation. Additionally, the economy has undertaken ambitious land and judicial reforms, introduced new corporate, insolvency, civil procedure, and secured transactions laws.
Rwanda has also streamlined and remodeled institutions and processes for starting a business, registering property, trading across borders, and enforcing a contract through the courts.
The study finds that adopting the region's best practices for each indicator measured by the global Doing Business report can reap many benefits landing the EAC member countries’ average at 19 on the ease of doing business, comparable to Germany which ranked 19 in the 2011 published report, rather than the 115 current average of EAC member countries.
Over the past seven years, regulatory reforms in the EAC have focused on simplifying regulatory processes—such as trading across borders and starting a business. 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. Meanwhile, import time was cut nearly in half—from 60 days in 2006 to 33 days in 2011.
This is the third report in this series analyzing business regulations in the EAC.
The regional report released today, draws on the global Doing Business project and its database, as well as the findings from Doing Business 2012, the ninth in a series of annual reports investigating the regulations that enhance and constrain business activity globally.