The Ease of Doing Business Initiative (EDBI) is helping turn sub-Saharan Africa’s markets into attractive investment destinations.
Over the past 15 years, Sub-Saharan African countries have been on a tremendous journey to reform their business environments. The results speak for themselves: In the “Doing Business” 2016 report, Sub-Saharan Africa recorded about 30 percent of the reforms that were implemented worldwide, and the region boasted half of the world’s top 10 improvers – making it the best-reforming region worldwide. As one example of what those trends mean: It takes four days to register a company in Kenya today, as compared to 54 days as recently as 10 years ago. In Rwanda, it takes an entrepreneur 32 days to transfer property – less time than it takes in Germany – compared to the 370 days that were required 10 years ago.
Despite the encouraging improvements, however, most Sub-Saharan African countries rank in the lower tier of the Doing Business measurements. Beyond the data about business conditions, it takes an average of 130 days for a business in the region to get a new electricity connection – yet, even after that business has such a connection, it experiences frequent power outages. The outages consume almost 700 hours per year – the highest such figure in the world.
We know that good practices, which are being implemented in the region, can help address such problems. The great challenge is to share that knowledge of good practices across reforming countries.
The EDBI is a peer-to-peer learning event that was requested by African countries that hope to facilitate knowledge-sharing about Doing Business reforms. For three days last month, Kenya hosted this year’s conference, whose theme focused on leveraging ICT to improve governments’ service to businesses – and ultimately to each country’s citizens. That theme seemed fitting for Kenya, which is a global success story on seamlessly integrating technology in citizens’ lives. Kenya, as you may recall, is the country that invented MPESA, the unique mobile-money payment system, and that is now rolling out “eCitizen,” the online government service portal.
It was inspiring to see the Rwandan and Malagasy delegations discussing government-service portals with the event’s Kenyan hosts, and to see delegates from Comoros and Guinea going back and forth on how to set up online tax-filing portals. The energy to learn and to share was certainly there.
Helping ‘business unusual’ work
Several fragile countries – Burundi, Côte d’Ivoire, Somalia, South Sudan and Zimbabwe – took part in the EDBI 2016 event. For some of those countries, coordinating competing priorities on the road to recovery can sometimes overshadow the business-reform agenda.
In fragile countries, the reform agenda is sometimes more about turning “best practice” into “best fit,” to make sure that reforms can adapt to and can have an effect on local environments. It is also a sign that tides are turning. Zimbabwe, where the World Bank Group's Trade & Competitiveness Global Practice is supporting an ambitious reform program, actively participated in EDBI 2016 – a sure sign that the country is opening up for more, and better, business and that it is willing to take stock of best practices from around the region.
Four key messages emerged from EDBI 2016. First: Reforming countries must focus on reform impact on the ground and must systematically engage with the private sector, from reform design to implementation. Second: Governments from the region urgently need to improve access to electricity and to make progress on regional integration in order to enable enterprise growth. Third: It is critical to communicate in order to explain reforms, to ensure stakeholder buy-in and to facilitate implementation. Fourth: The Doing Business report has spurred positive competition among reforming countries and has catalyzed business growth in the region.
So, what comes next? Policy reformers and decision-makers who attended EDBI 2016 put it best: Ultimately, reforms in Sub-Saharan Africa must make economies in the region more competitive. That means making them more predictable and more efficient, which would make them more attractive places for investors to build businesses, which in turn would create jobs and increase revenue.
Learning from each other’s successes, and failures, will help achieve this goal – and that’s a positive reason for our team to continue to support the annual EDBI.