By Kimberlee A. Brown
A recent World Bank report has assessed the potential of East African states in garnering new investments and promoting entrepreneurship development. According to the report, "if the best of East African regulations and procedures were implemented across the board, the business regulatory environment in East Africa, as measured by the report, would be comparable to that in Japan." The report, Doing Business in the East African Community 2011, draws on data from the annual global Doing Business study and takes a detailed look at business regulations in Burundi, Kenya, Rwanda, Tanzania, and Uganda. The report states that East Africa could benefit from sharing good practices in business regulation as measured by Doing Business.
In the past five years all East African Community economies made it easier to do business. The average ranking for those countries is 117 out of 183 economies overall in Doing Business 2011. Kenya has some of the most business-friendly regulations for dealing with construction permits. Ugandan courts resolve insolvency relatively efficiently. And Rwanda is among the fastest places to start a business.
“If each East African country was to adopt the region’s best practice for each Doing Business indicator, East Africa would rank 18, bringing the community closer to the global top performers,” said Sabine Hertveldt, World Bank Senior Private Sector Development Specialist and co-author of the report.
The East African Community is the regional intergovernmental organization of the economies studied in this report. In recent years EAC economies have worked to harmonize EAC Customs Union legislation and common market protocols while establishing peer-to-peer networks such as the Network of Reformers, based on similar models in the Organization of Economic Cooperation and Development and the European Union. In July 2010, EAC countries officially entered into a common market.
“We are serious about our role in the creation of an environment which is attractive to increasing private sector activity within and across our borders. We can do this by further streamlining regulations affecting businesses and by ensuring that the business environment is reassuring to investors,” stated Enos Bukuku, EAC Deputy Secretary General in a speech delivered on behalf of the EAC Secretary General.
"Although the common market has opened several opportunities for businesses in the region, it still requires an investment climate that is properly suited to catalyzing additional trade and investment. The EAC Doing Business report serves as a platform for private sector and governments to work together to make doing business in the community easier," said Agatha Nderitu, Executive Director, East African Business Council.
Doing Business in the East African Community 2011 was prepared as part of the EAC Investment Climate Program supported by the World Bank Group and PRO€INVEST, a partnership program developed and undertaken by the European Commission on behalf of the African, Caribbean and Pacific Group of states.
Between June 2009 and May 2010, as recorded by Doing Business 2011, East African countries implemented eight reforms making it easier to do business. That brought the region’s total since 2004 to 54. Of the eight reforms, three were carried out in Rwanda, two each in Kenya and Uganda, and one in Burundi.