Sub-Saharan Africa Casa Africa - Madrid & Valencia February 21, 2018

Transcription

1 Sub-Saharan Africa Casa Africa - Madrid & Valencia February 21, 218 HULYA ULKU Senior Economist Global Indicators, Development Economics

2 I. About Doing Business II. Findings of Doing Business 218 III. Doing Business in Sub-Saharan Africa

3 What does Doing Business measure? Doing Business indicators: Focus on regulations relevant to the life cycle of a small to medium-size domestic business. Are built on standardized case scenarios. Are measured for the largest business city in each economy, and the second largest business city in countries with more than 1 million inhabitants as of 213. Are focused on the formal sector. Job creation is one of the transformational gains that countries and communities can achieve when the private sector is allowed to flourish. Fair, efficient and transparent rules, which Doing Business promotes, improve governance and tackle corruption Kristalina Georgieva, World Bank Chief Executive Officer 2

4 The 11 areas of business regulation measured by Doing Business affect firms throughout their life cycle New 3

5 15 years of Doing Business: Now and then 5 Topics 23 Indicators 3 Team Members 133 Economies 873 Contributors Doing Business 24 Doing Business Topics 12 Indicators 85 Team Members 19 Economies and 21 Cities 13,147 Contributors 118, Data Points 4

6 15 years of Doing Business 925 Reforms inspired by Doing Business Doing Business has identified 3,188 Business reforms Doing Business has reached 114,532 Contributions 5 Doing Business has visited 169 Countries

7 I. About Doing Business II. Findings of Doing Business 218 III. Doing Business in Sub-Saharan Africa

8 Source: Doing Business database. Note: Economies are selected on the basis of the number of reforms and ranked on how much their distance to frontier (DTF) score improved. First, Doing Business selects the economies that implemented reforms making it easier to do business in three or more of the 1 areas included in this year s aggregate distance to frontier score. Regulatory changes making it more difficult to do business are subtracted from the number of those making it easier. Second, Doing Business ranks these economies on the increase in their distance to frontier score from the previous year. The improvement in their score is calculated not by using the data published in 217 but by using comparable data that capture data revisions and methodology changes. The choice of the most improved economies is determined by the largest improvements in the distance to frontier score among those with at least three reforms. 7

9 Sub-Saharan Africa is the region that reformed the most since 24 Total number and share of reforms recorded per region, from Doing Business 24 to Doing Business 218 South Asia 126 Middle East & North Africa East Asia & Pacific Latin America & Caribbean 292 OECD High-Income % 529 OECD High-Income Latin America & Caribbean 12% 9% 25% 21% Middle East & North Africa Sub-Saharan Africa Europe & Central Asia 4% South Asia 12% East Asia & Pacific Europe & Central Asia 673 Sub-Saharan Africa 798 # Total number of reforms per region % Share of reforms recorded globally 8 Source: Doing Business database.

10 Worldwide, 119 economies implemented 264 reforms in 216/17 % Share of economies that reformed in a region Average number of reforms per economy in a region OECD highincome.5 45% Latin America & Caribbean 5% % 65% % 1.8 Middle East & North Africa Sub-Saharan Africa 44 Europe & Central Asia 75% 2.5 South Asia 2 56% East Asia & Pacific Total number of reforms per region % of regulatory reforms in 216/17 were implemented by developing countries. While in 24/5 only 38% of the economies in Sub-Saharan Africa implemented business regulatory reforms, in 216/17 75% of the economies did so. Doing Business has recorded 3,188 regulatory reforms making it easier to do business since Source: Doing Business database.

11 Since 24, reforms reduced the time of doing business across regions Starting a Business Democratic Republic of Congo 24: 166 days 217: 7 days Paying Taxes China 27: 832 hours 217: 27 hours Registering Property Belarus 26: 23 days 217: 3 days Dealing with Construction Permits Mexico 26: 165 days 217: 82 days 1 Source: Doing Business database.

12 I. About Doing Business II. Findings of Doing Business 218 III. Doing Business in Sub-Saharan Africa

13 How do economies in Sub-Saharan Africa perform on the ease of doing business in 216/217? 12 Rank Economy DTF score 25 Mauritius Rwanda Kenya Botswana South Africa Zambia Seychelles Lesotho Namibia Malawi Swaziland Ghana Uganda Cabo Verde Tanzania Mozambique Côte d'ivoire Senegal Mali Niger Nigeria Gambia, The Burkina Faso Mauritania 5.88 One of the top 1 improvers Rank Economy DTF score 151 Benin Guinea Togo Comoros Zimbabwe Sierra Leone Ethiopia Madagascar Cameroon Burundi Gabon São Tomé and Príncipe Sudan Liberia Equatorial Guinea Angola Guinea-Bissau Congo, Rep Chad Congo, Dem. Rep Central African Republic South Sudan Eritrea Somalia Source: Doing Business 218.

14 Mauritius Rwanda Kenya Botswana South Africa Zambia Seychelles Lesotho Namibia Malawi Swaziland Ghana Uganda Cabo Verde Tanzania Mozambique Cote d'ivoire Senegal Mali Niger Nigeria Gambia, The Burkina Faso Mauritania Benin Guinea Togo Comoros Zimbabwe Sierra Leone Ethiopia Madagascar Cameroon Burundi Gabon São Tomé and Príncipe Sudan Liberia Equatorial Guinea Angola Guinea-Bissau Congo, Rep Chad Congo, Dem Rep Central African Republic South Sudan Eritrea Somalia An economy s regulatory environment may be more businessfriendly in some areas than in others in Sub-Saharan Africa Average range in top 5: 26.5 points Average range in bottom 5: 49. points Average of all topic scores Average of the 3 highest topic scores Average of the 3 lowest topic scores Source: Doing Business database. Note: The distance to frontier scores reflected are those for the 1 Doing Business topics included in this year s aggregate distance to frontier score.

15 Rwanda Senegal Sierra Leone Burundi Cote d'ivoire Burkina Faso Mali Niger Malawi Benin Mozambique Madagascar Togo Nigeria Mauritania Guinea Kenya Ghana Angola Mauritius Liberia Lesotho Tanzania Ethiopia Zambia Uganda São Tomé and Príncipe Guinea-Bissau Congo, Dem Rep Gambia, The Cameroon Congo, Rep Botswana Cabo Verde South Africa Sudan Central African Republic Comoros Gabon Seychelles Equatorial Guinea Eritrea Swaziland Zimbabwe Chad Namibia South Sudan Somalia Sub-Saharan Africa has made a big improvement in business regulation over time Average year-on-year improvement in distance to frontier score DB 218 DB DB DB Source: Doing Business database. Note: The measure is normalized to range from to 1, with 1 representing the frontier. Because of changes over the years in methodology and in the economies and indicators included, the improvements are measured year on year using pairs of consecutive years with comparable data. 14

16 Who in Sub-Saharan Africa reformed in areas measured by Doing Business in 216/17? Starting a business Trading across borders Cameroon, Congo (Dem. Rep.), Congo (Rep.), Equatorial Guinea, Ethiopia, Gabon, Kenya, Madagascar, Mauritania, Mauritius, Niger, Nigeria, Senegal, Sierra Leone, Zimbabwe Angola, Botswana, Cabo Verde, Comoros, Ethiopia, Kenya, Malawi, Mauritania, Mauritius, Mozambique, São Tomé and Príncipe, Sierra Leone, Swaziland, Uganda, Zambia Dealing with construction permits Angola, Benin, Cabo Verde, Côte d'ivoire, Gabon, Ghana, Kenya, Malawi, Mauritius, Niger, Nigeria, Rwanda, Seychelles, Tanzania 14 Getting credit Benin, Burkina Faso, Cameroon, Guinea-Bissau, Kenya, Madagascar, Malawi, Nigeria, Swaziland, Togo, Zambia 11 Registering property Benin, Mauritania, Mauritius, Niger, Nigeria, Rwanda, Senegal, Seychelles 8 Paying taxes Botswana, Kenya, Mauritania, Nigeria, Rwanda, Senegal, Zambia 7 Getting electricity Angola, Kenya, Mozambique, Niger, Senegal 5 Enforcing contracts Mauritania, Namibia, Rwanda, Senegal 4 Resolving insolvency Labor market regulations Cabo Verde, Liberia, Malawi Congo (Dem. Rep.) 1 3 Protecting minority investors 15 Rwanda 1

17 Sub-Saharan Africa has reduced the time and cost of starting and formally operating a business Note: Above figures refer to the time and cost of starting a business for men only, as data for women are only available starting from Doing Business 217. Figures shown above are from Doing Business 214 and

18 Source: Bruhn, Miriam. 28. "License to Sell: The Effect of Business Registration Reform on Entrepreneurial Activity in Mexico." Policy Research Working Paper 4538, World Bank, Washington, DC. Development impact of efficient regulations in starting a business Evidence suggests that regulatory reforms making it easier to start a formal business are associated with increases in the number of newly registered firms and with higher levels of employment and productivity. Conversely, excessively cumbersome regulation of startup is associated with higher levels of corruption and informality. Source: Klapper, Leora and Inessa Love The Impact of Business Environment Reforms on New Firm Registration. Policy Research Working Paper 5493, World Bank, Washington, DC. Motta, Marialisa, Ana Maria Oviedo and Massimiliano Santini. 21. An Open Door for Firms: The Impact of Business Entry Reforms. Viewpoint 323, World Bank Group, Washington, DC. Regulatory reforms can have a significant impact when they tackle the right bottleneck. After a reform simplifying business registration in different municipalities at different points in time across Mexico, a study found that the number of registered businesses increased by 5% and employment by 2.8%.

19 Sub-Saharan Africa has reduced the time and cost of complying with formalities to build a warehouse Figures shown above are from Doing Business 214 and 218.

20 Development impact of efficient regulations on obtaining construction permit Economies that score well on the ease of Dealing with Construction Permits tend to have rigorous yet expeditious and transparent permitting processes. In a 29 survey of 218 companies in 19 Asia-Pacific Economic Cooperation (APEC) member economies, respondents identified the time and procedures in construction permitting as the biggest regulatory impediment to doing business. Source: Singapore Business Federation. 29. Key Findings from ABAC Ease of Doing Business (EoDB) Survey. Presentation at Singapore Business Federation Removing Barriers for Business Growth in APEC dialogue session, Singapore. For many entrepreneurs, construction regulations are a critical factor when deciding where to establish their businesses. A recent competitiveness report by KPMG indicated that construction costs and the permitting process were among the top 2 factors in determining the location of a start-up in the United States. Source: KPMG. 29. Competitive Alternatives: KPMG s Guide to International Business Location.

21 Sub-Saharan Africa has reduced the time and cost of obtaining an electricity connection Figures shown above are from Doing Business 214 and 218.

22 Development impact of reliability and price of electricity supply Infrastructure services (or lack thereof) are a major concern for businesses around the world. Unreliable electricity supply and high tariffs, in particular, can be hurdles to entrepreneurial activity. According to 217 World Bank Enterprise Survey data for 136 economies, business owners find electricity services as the fourth biggest obstacles to their activities. Source: World Bank Enterprise Surveys (22 16). The data sample includes 139 economies Studies have also shown that poor electricity supply adversely affects the firm productivity and their investments productive capacity. Further research shows that capital (domestic and foreign) tends to go to countries that are able to offer a reliable and competitively priced supply of electricity. Source: Calderon,César, and Luis Servén. 23. The Output Cost of Latin America s Infrastructure Gap. In The Limits of Stabilization: Infrastructure, Public Deficits, and Growth in Latin America, ed. William R. Easterly and Luis Servén. Washington, DC: World Bank Audinet, Perre: Rodriguez Pardina, Martin, 21. Managing an Electricity Shortfall: A guide for policy makers, The World Bank, Washington, D.C.

23 Sub-Saharan Africa slightly reduced the time and cost of transferring property between local firms Figures shown above are from Doing Business 214 and 218.

24 Development impact of registered property and efficient, reliable land registration Evidence shows that owners with properly registered titles are more likely to invest in the local economy and engage in the economy s workforce and boost productivity. The benefits of land registration go beyond the private sector. For governments, having reliable, up-to-date information in cadastres and land registries is essential to correctly assess and collect tax revenue. Source: Burns, Anthony. 22. Land Registration to Improve Security, Transparency, Governance & Sustainable Resource Management. In Comparative Study of Land Administration Systems, World Bank Asia Regional Workshop on Land Policy and Administration working paper, World Bank, Washington, DC. Field, E. (27). Entitled to work: Urban property rights and labor supply in Peru. The Quarterly Journal of Economics, 122(4),

25 Sub-Saharan Africa reduced the time and cost of resolving commercial dispute through the courts Figures shown above are from Doing Business 214 and 218.

26 Development impact of efficient judiciary process for resolving commercial disputes Economies with a more efficient judiciary, in which courts can effectively enforce contractual obligations, have more developed credit markets and a higher level of development overall. Source: Dam, Kenneth W. 26. The Judiciary and Economic Development. John M. Olin Law & Economics Working Paper 287 (Second Series), University of Chicago Law School, Chicago. A stronger judiciary is also associated with more rapid growth of small firms. Overall, enhancing the efficiency of the judicial system can improve the business climate, foster innovation, attract foreign direct investment and secure tax revenues. Source: Islam, Roumeen. 23. Do More Transparent Governments Govern Better? Policy Research Working Paper 377, World Bank, Washington, DC. Esposito, Gianluca, Sergi Lanau and Sebastiaan Pompe Judicial System Reform in Italy: A Key to Growth. IMF Working Paper 14/32, International Monetary Fund, Washington, DC.

27 Sub-Saharan Africa slightly reduced the time it takes to resolve insolvency, though cost stayed the same Figures shown above are from Doing Business 214 and 218.

28 Development impact of efficient insolvency process Source: Neira, Julian Bankruptcy and cross-country differences in productivity. Journal of Economic Behavior & Organization (217). Claessens, Stijn, and Leora Klapper. 23. "Bankruptcy around the World: Explanations of Its Relative Use." Policy Research Working Paper 2865, World Bank, Washington, DC. If at the end of insolvency proceedings creditors can recover most of their investments, they can keep reinvesting in firms and improving companies access to credit. Similarly, if a bankruptcy regime respects the absolute priority of claims, this allows secured creditors to continue lending and maintains confidence in the bankruptcy system. Source: Armour, John; Menezes, Antonia; Uttamchandani, Mahesh; and Van Zweiten, Kristen. How Creditor Rights Affect Debt Finance in Research Handbook on Secured Financing in Commercial Transactions (Dahan, F., ed.), 215, Elgar Publishing. Simeon Djankov, "Bankruptcy Regimes during Financial Distress," World Bank, Washington, DC, 29.

29 Sub-Saharan Africa reduced the time it takes to prepare, file returns and pay taxes as well as the total tax rate Figures shown above are from Doing Business 214 and 218.

30 Development impact of efficient tax administration and lower tax rates A study of 118 economies over six years found that a 1% reduction in the tax administrative burden as measured by the number of tax payments per year and the time required to pay taxes led to a 3% increase in annual business entry rates. Source: Pontus Braunerhjelm and Johan E. Eklund, Taxes, tax administrative burdens and new firm formation, KYKLOS, Vol. 67 February 214 No. 1, Higher tax rates are associated with fewer formal businesses and lower private investment. A 1 percentage point increase in the effective corporate income tax rate is associated with a reduction in the ratio of investment to GDP of up to 2 percentage points and a decrease in the business entry rate of about 1 percentage point. Source: Djankov, Simeon, Tim Ganser, Caralee McLiesh, Rita Ramalho and Andrei Shleifer. 21. The Effect of Corporate Taxes on Investment and Entrepreneurship. American Economic Journal: Macroeconomics 2 (3):

31 Sub-Saharan Africa reduced the time for documentary and border compliance when exporting and importing Figures shown above are from Doing Business 217 and 218.

32 Total cost of documentary and border compliance when exporting in Sub- Saharan Africa did not changed, while the cost of documentary and border compliance when importing decreased slightly Figures shown above are from Doing Business 217 and 218.

33 Development impact of trade logistics and trade In many economies, redundant procedures add to the time and cost for border and documentary compliance. Evidence from a study investigating customs procedures delays shows that customs-driven delays have a significant negative impact on firms' foreign sales through reduced number of shipments, number of buyers and exports per buyer. Source: Martincus, Christian Volpe, Jerónimo Carballo, and Alejandro Graziano "Customs." Journal of International Economics 96(1): Greater international trade is strongly correlated with economic growth. A study using data from 118 countries over nearly 5 years (195 98) found that those opening up their trade regimes experienced a boost in their average annual growth rates of about 1.5 percentage points. Source: Wacziarg, Romain, and Karen Horn Welch. 28. "Trade liberalization and growth: New evidence." The World Bank Economic Review 22(2):

34 Distance to frontier score (-1) Malawi reformed 4 areas measured by Doing Business in 216/17 Where did Malawi reform to improve its business environment in 216/17? 216/17 215/16 How did Malawi do it? 1 9 Dealing with Construction Permits It costs 11.6% of the warehouse value. It cost 15.1% of the warehouse value. Halved the fees charged by the city council to process building plan approvals Getting Credit Depth of credit information index is 7. Strength of legal rights index is 11. Depth of credit information index was. Strength of legal rights index was 9. Established new credit bureau and adopted a new law that establishes clear priority rules inside and outside bankruptcy procedures DB218 rank: 11

35 Distance to frontier score (-1) Malawi reformed 4 areas measured by Doing Business in 216/17 Where did Malawi reform to improve its business environment in 216/17? Trading Across Borders 216/17 215/16 Time to export: Documentary compliance and Border Compliance are 75 and 78 hours, respectively Time to import: Documentary compliance and Border compliance are both 55 and 55 hours. Time to export: Documentary compliance and Border Compliance were 83 and 85 hours, respectively Time to import: Documentary compliance and Border compliance were 63 and 64 hours, respectively. How did Malawi do it? Upgraded to a webbased customs data management platform, ASYCUDA World Resolving Insolvency Strength of insolvency framework index is 8.5. Strength of insolvency framework index was 5. Introduced a reorganization procedure. DB218 rank: 11

36 Doing Business in Malawi score Results on individual indicators Malawi scored points in DTF in Doing Business 218, giving it a ranking of 11 overall. Getting credit Starting a business Trading across borders Registering property Paying taxes Dealing with construction permits Protecting minority investors Enforcing contracts Getting electricity Resolving insolvency DTF score 35 Source: Doing Business 218

37 Doing Business in Malawi ranking Rankings on Doing Business topics Malawi (Scale: Rank 19 center, Rank 1 outer edge) Starting a business (152) Resolving insolvency (138) Dealing with construction permits (144) Enforcing contracts (151) Getting electricity (166) Trading across borders (117) Registering property (96) Paying taxes (134) Getting credit (6) Protecting minority investors (96) 36 Source: Doing Business 218

38 Distance to frontier score (-1) Nigeria reformed 5 areas measured by Doing Business in 216/17 Where did Nigeria reform to improve its business environment in 216/17? Starting a Business Dealing with Construction Permits Registering Property 216/17 215/16 It takes 19 days and costs 28.8% of income per capita. It takes 15 procedures and costs 18.5% of the warehouse value. It takes 11 procedures and 69 days. Quality of land administration index is 7. It took 25 days and costs 31% of income per capita It took 16 procedures and costs 19.8% of the warehouse value. It takes 12 procedures and 7 days. Quality of land administration index is 6. How did Nigeria do it? Allowed electronic stamping of registration documents. This reform applies to both Kano and Lagos. Increased transparency (Nigeria-Kano). Streamlined the permitting process and increased transparency (Nigeria-Lagos). Increased transparency (Nigeria-Kano). Increased transparency and streamlined procedures (Nigeria- Lagos) DB218 rank: 145

39 Distance to frontier score (-1) Nigeria reformed 5 areas measured by Doing Business in 216/17 Where did Nigeria reform to improve its business environment in 216/17? Getting Credit Paying Taxes 216/17 215/16 Depth of credit information index is 8. Strength of legal rights index is 1. It takes 36 hours per year to prepare, file and pay. Depth of credit information index is 6. Strength of legal rights index is 7. It took 429 hours per year to prepare, file and pay. How did Nigeria do it? Guaranteed borrowers the legal right to inspect their credit data from the credit bureau. Adopted a new law on secured transactions. This reform applies to both Kano and Lagos. Introduced new channels for payment of taxes. This reform applies to both Kano and Lagos DB218 rank: 145

40 Doing Business in Nigeria score Results on individual indicators Nigeria scored 52.3 points in DTF in Doing Business 218, giving it a ranking of 145 overall. Getting credit Starting a business Protecting minority investors Dealing with construction permits Enforcing contracts Paying taxes Getting electricity Registering property Resolving insolvency Trading across borders DTF score 39 Source: Doing Business 218

41 Doing Business in Nigeria ranking Rankings on Doing Business topics Nigeria (Scale: Rank 19 center, Rank 1 outer edge) Starting a business (13) Resolving insolvency (145) Dealing with construction permits (147) Enforcing contracts (96) Getting electricity (172) Trading across borders (183) Registering property (179) Paying taxes (171) Getting credit (6) Protecting minority investors (33) 4 Source: Doing Business 218

42 Distance to frontier score (-1) Zambia reformed 3 areas measured by Doing Business in 216/17 Where did Zambia reform to improve its business environment in 216/17? Getting Credit Paying Taxes 216/17 215/16 Strength of legal rights index is 11. Number of payments per year is 11. It takes 164 hours per year to prepare, file and pay. The total tax rate is 15.6% of the profit. Time to comply with a corporate income tax audit is 3.3 hours. Strength of legal rights index was 7. Number of payments per year was 26. It took hours per year to prepare, file and pay. The total tax rate was 18.6% of the profit. Time to comply with a corporate income tax audit is 8.3 hours. How did Zambia do it? Adopted a new Movable Property Act and set up a new collateral registry. Introduced an online platform for filing and paying taxes. Also reduced of the property transfer tax rate DB218 rank: 85

43 Distance to frontier score (-1) Zambia reformed 3 areas measured by Doing Business in 216/17 Where did Zambia reform to improve its business environment in 216/17? Trading Across Borders 216/17 215/16 Time to export: Documentary compliance and Border Compliance are 96 and 12 hours, respectively Time to import: Documentary compliance and Border compliance are 72 and 12 hours, respectively. Time to export: Documentary compliance and Border Compliance were 13 and 148 hours, respectively Time to import: Documentary compliance and Border compliance were 134 and 163 hours, respectively. How did Zambia do it? Implemented a webbased customs data management platform, ASYCUDA World DB218 rank: 85

44 Doing Business in Zambia score Results on individual indicators Zambia scored 64.5 points in DTF in Doing Business 218, giving it a ranking of 85 overall. Getting credit Paying taxes Starting a business Dealing with construction permits Trading across borders Protecting minority investors Enforcing contracts Getting electricity Registering property Resolving insolvency DTF score 43 Source: Doing Business 218

45 Doing Business in Zambia ranking Rankings on Doing Business topics Zambia (Scale: Rank 19 center, Rank 1 outer edge) Starting a business (11) Resolving insolvency (89) Dealing with construction permits (69) Enforcing contracts (128) Getting electricity (155) Trading across borders (15) Registering property (149) Paying taxes (15) Getting credit (2) Protecting minority investors (89) 44 Source: Doing Business 218

46 Distance to frontier score (-1) Rwanda reformed 5 areas measured by Doing Business in 216/17 Where did Rwanda reform to improve its business environment in 216/17? Dealing with Construction Permits Registering Property Protecting Minority Investors 216/17 215/16 It costs 13.2% of the warehouse value. Building quality control index is 14. It takes 7 days. Extent of conflict of interest regulation index is 7.. Extent of shareholder governance index is 7.7. It cost 14.1% of the warehouse value. Building quality control index is 13. It took 12 days. Extent of conflict of interest regulation index was 6.3. Extent of shareholder governance index was 5.. How did Rwanda do it? Increased quality control during construction. Implemented online services to facilitate the registration of property transfers. Made it easier to sue directors, clarified ownership and control structures, and required greater corporate transparency DB218 rank: 41

47 Distance to frontier score (-1) Rwanda reformed 5 areas measured by Doing Business in 216/17 Where did Rwanda reform to improve its business environment in 216/17? Paying Taxes 216/17 215/16 Number of payments per year is 8. It takes 94.5 hours per year to prepare, file and pay. Number of payments per year was 29. It took 124 hours per year to prepare, file and pay. How did Rwanda do it? Established an online system for filing and paying taxes Enforcing Contracts Quality of the judicial administration index is 14. Quality of the judicial administration index was 13. Made judgments rendered at all levels in commercial cases available to the general public on the judiciary s website DB218 rank: 41

48 Doing Business in Rwanda score Results on individual indicators Rwanda scored 73.4 points in DTF in Doing Business 218, giving it a ranking of 41 st overall. Registering property Getting credit Starting a business Paying taxes Protecting minority investors Trading across borders Dealing with construction permits Getting electricity Enforcing contracts Resolving insolvency DTF score 47 Source: Doing Business 218

49 Doing Business in Rwanda ranking Rankings on Doing Business topics Rwanda (Scale: Rank 19 center, Rank 1 outer edge) Starting a business (78) Resolving insolvency (78) Dealing with construction permits (112) Enforcing contracts (85) Getting electricity (119) Trading across borders (87) Registering property (2) Paying taxes (31) Getting credit (6) Protecting minority investors (16) 48 Source: Doing Business 218

50 Distance to frontier score (-1) Mauritania reformed 5 areas measured by Doing Business in 216/17 Where did Mauritania reform to improve its business environment in 216/17? 216/17 215/16 How did Mauritania do it? 1 9 Starting a Business It takes 4 procedures and 6 days. It took 7 procedures and 8 days. Combined multiple registration procedures. 8 7 Registering Property Quality of land administration index is 7. Quality of land administration index was 6. Increased transparency of the land registry Paying Taxes Number of payments per year is 33. It takes 27 hours per year to prepare, file and pay. Number of payments per year was 45. It took 3 hours per year to prepare, file and pay. Allowed quarterly filing and payment of social security contributions. 2 1 DB218 rank: 15

51 Distance to frontier score (-1) Mauritania reformed 5 areas measured by Doing Business in 216/17 Where did Mauritania reform to improve its business environment in 216/17? Trading Across Borders Enforcing Contracts 216/17 215/16 Time to export: Border compliance is 62 hours. Time to import: Border compliance is 69 hours. Quality of the judicial administration index is 5. Time to export: Border compliance was 72 hours. Time to import: Border compliance was 84 hours. Quality of the judicial administration index is 4. How did Mauritania do it? Improved the Port of Nouakchott: eliminated the requirement to weigh all import containers, invested in infrastructure, streamlined the movement of cargo and consolidated the payment of fees. Made judgments rendered at all levels in commercial cases available to the general public on the courts websites DB218 rank: 15

52 Doing Business in Mauritania score Results on individual indicators Mauritania scored 5.88 points in DTF in Doing Business 218, giving it a ranking of 15 overall. Starting a business Dealing with construction permits Registering property Enforcing contracts Trading across borders Getting electricity Protecting minority investors Paying taxes Getting credit Resolving insolvency DTF score 51 Source: Doing Business 218

53 Doing Business in Mauritania ranking Rankings on Doing Business topics Mauritania (Scale: Rank 19 center, Rank 1 outer edge) Starting a business (43) Resolving insolvency (168) Dealing with construction permits (19) Enforcing contracts (65) Getting electricity (148) Trading across borders (138) Registering property (98) Paying taxes (179) Getting credit (159) Protecting minority investors (18) 52 Source: Doing Business 218

54 Distance to frontier score (-1) Morocco reformed 2 areas measured by Doing Business in 216/17 Where did Morocco reform to improve its business environment in 216/17? 1 216/17 215/16 How did Morocco do it? 8 Starting a Business 4 Procedures Time is 9 days 5 Procedures Time was 1 days Combined the stamp duty payment with the application for business incorporation Paying taxes Time is 155 hours Time was 211 hours Made paying taxes easier by improving the online system for filing and paying taxes DB218 rank: Source: Doing Business 218

55 Doing Business in Morocco score Results on individual indicators Morocco scored points in DTF in Doing Business 218, giving it a ranking of 69 overall. Starting a business Paying taxes Trading across borders Dealing with construction permits Getting electricity Registering property Enforcing contracts Protecting minority investors Getting credit Resolving insolvency DTF score 54 Source: Doing Business 218

56 Doing Business in Morocco ranking Rankings on Doing Business topics Morocco (Scale: Rank 19 center, Rank 1 outer edge) Starting a business (35) Resolving insolvency (134) Dealing with construction permits (17) Enforcing contracts (57) Getting electricity (72) Trading across borders (65) Registering property (86) Paying taxes (25) Getting credit (15) Protecting minority investors (62) 55 Source: Doing Business 218

57 THANK YOU! Doing Business

58 I. Annex I: about Doing Business

59 Advantages and limitations of the Doing Business methodology Feature Advantages Limitations Solutions Use of standardized case scenarios Focus on largest business city Makes data comparable across economies and methodology transparent, using case scenarios that are common globally Makes data collection manageable (costeffective) and data comparable Reduces scope of data; only regulatory reforms in areas measured can be systematically tracked; the case scenarios may not be the most common in a particular economy Reduces representativeness of data for an economy if there are significant differences across locations Complement the Doing Business data with Enterprise Surveys which cover a representative sample of the private sector The subnational Doing Business covers several cities in large economies 58

60 Advantages and limitations of the Doing Business methodology Feature Advantages Limitations Solutions Focus on domestic and formal sector Keeps attention on formal sector where regulations are relevant and firms are most productive Unable to reflect reality for informal sector important where that is large or for foreign firms facing a different set of constraints Enterprise Surveys cover foreign owned firms and in some economies the informal sector Reliance on expert respondents Ensures that data reflect knowledge of those with most experience in conducting types of transactions measured Indicators less able to capture variation in experiences among entrepreneurs Enterprise Surveys provides across firm variation within the same economy; the set of Doing Business respondents are constantly increasing and include both private and public sector 59

61 Advantages and limitations of the Doing Business methodology Feature Advantages Limitations Solutions Focus on the law Makes indicators actionable because the law is what policy makers can change Where systematic compliance with the law is lacking, regulatory changes will not achieve full results desired Covers both de facto (such as the time to start a business) and de jure indicators (such as the features of insolvency law) 6

62 Country engagement Since October 216, the team has met with 44 delegations in Washington DC. Several engagements spanned a two-day period. The team has travelled to 26 economies for data collection. In many, the team held methodology workshops with government officials. The team has engaged in 65 video conferences with government officials. 61

63 Examples of the frontier in different indicators Starting a business Registering property Indicator Frontier Who set frontier? Worst performance Indicator Frontier Who set frontier? Worst performance Procedures (number) 1 New Zealand 2 Procedures (number) 1 Georgia 14 Time (days).5 New Zealand 23. Time (days) 1 New Zealand 513. Cost (% of income per capita). United Kingdom Quality of land administration index (-3) 3 - Enforcing contracts Resolving insolvency Indicator Frontier Who set frontier? Worst performance Indicator Frontier Who set frontier? Worst performance Time (days) 12 Singapore 1785 Recovery rate (cents on the dollar) 93.1 Norway. Cost (% of claim).1 Iceland Strength of insolvency framework index (-16) 16 - Each indicator y is rescaled to: worst y (worst frontier) 1 Distance to frontier score Note: Best result on the Quality of land administration index was achieved by Singapore with 29 points. Best result on the Strength of insolvency framework index was achieved by Bosnia and Herzegovina, Germany, Kazakhstan, FYR Macedonia, Puerto Rico (US) and the United States with 15 points each. 62

64 I. Annex II: Findings of Doing Business 218

65 Distance to frontier score (-1) Tracking economies progress over time Score in DB Score in DB21 1 Source: Doing Business database. Note: The data since DB215 follow new methodology. 64

66 Doing Business recorded 54 gender disparities in 36 economies Number of recorded gender restrictions: Source: Doing Business database. 65

67 Distance to frontier score on starting a business (-1) The Democratic Republic of Congo reduced gender restrictions in 216 The Democratic Republic of Congo made starting a business easier by eliminating the requirement that a woman obtain her husband s permission to start a business and by combining multiple business registration procedures The Family code of the Democratic Republic of Congo (Law 87-1 of August 1st, 1987) was amended by the law 16/8 of July 15, 216 (which entered into force at the same date by promulgation by the president) Law 16/8 eliminated article 45 of the family code according to which a married woman could not start legal civil proceedings, acquire, alienate or enter into a contract without the authorization of her husband, which included starting a business. This in turn facilitated the creation of equal conditions for starting a business for men and women DB218 rank:

68 Strong convergence across economies on efficiency since Doing Business 27 Time to start a business (days) Time to prepare, file and pay taxes (hours) Best 3 Quartiles Worst Quartile Best 3 Quartiles Worst Quartile Time to register property (days) Time to deal with construction permits (days) Best 3 Quartiles Worst Quartile Best 3 Quartiles Worst Quartile 67 Source: Doing Business database. Note: These numbers use a consistent sample of 174 economies as measured in Doing Business 27, for which data are available starting from 25.

69 Strong convergence across economies on costs since Doing Business Cost to start a business (% of income per capita) Cost to deal with construction permits (% of warehouse value) Best 3 Quartiles Worst Quartile Best 3 Quartiles Worst Quartile Cost to register property (% of property value) 1 96 Total tax rate (% of profit) Best 3 Quartiles Worst Quartile Best 3 Quartiles Worst Quartile 68 Source: Doing Business database. Note: These numbers use a consistent sample of 174 economies as measured in Doing Business 27.

70 Crises are opportunities for reform fragile states show trends of convergence with non-fragile states Paid-in minimum capital requirement to start a business (% of income per capita) Cost to enforce contracts (% of claim value) Non-fragile states Fragile states Non-fragile states Fragile states Cost to register property (% of property value) Cost to get electricity (% of income per capita) 7,266 4,87 1,384 9 Non-fragile states Fragile states Non-fragile states Fragile states 69 Source: Doing Business database. Note: These numbers use a consistent sample of 174 economies as measured in Doing Business 27.

71 Employment growth rate between 214 and 215 (percentage points) Unemployment growth rate between 214 and 215 (percentage points) Better business regulation is associated with employment growth and worse regulation with higher unemployment Distance to frontier score, DB215 (-1) Distance to frontier score, DB215 (-1) Source: Doing Business database; International Labor Organization data ( Note: Both relationships shown are significant at the 1% level after controlling for income per capita. The left-most relationship is also significant when using employment growth rate and distance to frontier average score between 21 and

72 Resolving insolvency reforms (average number per economy) Reform intensity tends to rise in response to crises Source: Simeon Djankov, Dorina Georgieva, Rita Ramalho Determinants of Regulatory Reform.

73 Doing Business in Senegal ranking: Rankings on Doing Business topics Senegal (Scale: Rank 19 center, Rank 1 outer edge) Starting a business (63) Resolving insolvency (91) Dealing with construction permits (145) Enforcing contracts (142) Getting electricity (118) Trading across borders (135) Registering property (121) Paying taxes (178) Getting credit (142) Protecting minority investors (138) 72 Source: Doing Business 218

74 Distance to frontier score (-1) Mauritius reformed 4 areas measured by Doing Business in 216/17 Where did Mauritius reform to improve its business environment in 216/17? 216/17 215/16 How did Mauritius do it? 1 9 Starting a Business It takes 5 days and 1% income per capita. It takes 6 days and 1.8% income per capita. Exempted trade fees for licenses below MUR 5, and introduced the electronic certificate of incorporation Dealing with Construction Permits It takes 98 days. It took 156 days. Outsourced the design and construction of sewerage connection works DB218 rank: 25

75 Distance to frontier score (-1) Mauritius reformed 4 areas measured by Doing Business in 216/17 Where did Mauritius reform to improve its business environment in 216/17? 216/17 215/16 How did Mauritius do it? 1 9 Registering Property It costs.6% of the property value. Quality of land administration index is 17. It cost 1.6% of the property value. Quality of land administration index was 16. Eliminated the transfer tax and registration duty, implemented a complaint mechanism and published service standards Trading Across Borders Time to export: Border compliance is 38 hours. Time to import: Border compliance is 41 hours. Time to export: Border compliance was 48 hours. Time to import: Border compliance is 51 hours. Improved the Cargo Community System, introduced advanced electronic document submission and updated the riskbased inspection system DB218 rank: 25

76 Doing Business in Mauritius score Results on individual indicators Mauritius scored points in DTF in Doing Business 218, giving it a ranking of 25 overall. Starting a business Paying taxes Dealing with construction permits Getting electricity Trading across borders Registering property Enforcing contracts Resolving insolvency Protecting minority investors Getting credit DTF score 75 Source: Doing Business 218

77 Doing Business in Mauritius ranking Rankings on Doing Business topics Mauritius (Scale: Rank 19 center, Rank 1 outer edge) Starting a business (4) Resolving insolvency (36) Dealing with construction permits (9) Enforcing contracts (27) Getting electricity (51) Trading across borders (7) Registering property (35) Paying taxes (1) Getting credit (55) Protecting minority investors (33) 76 Source: Doing Business 218

78 Distance to frontier score (-1) Mozambique reformed 2 areas measured by Doing Business in 216/17 Where did Mozambique reform to improve its business environment in 216/17? Getting Electricity 216/17 215/16 It takes 5 procedures and 68 days. It took 7 procedures and 91 days. How did Mozambique do it? Streamlined procedures through the utility instead of different agencies. Eliminated the security deposit for large commercial clients Trading Across Borders Time to export: Border compliance is 66 hours. Time to export: Border compliance was 78 hours. Improved infrastructure at the Maputo-Matola port complex DB218 rank: 138

79 Doing Business in Mozambique score Results on individual indicators Mozambique scored 54. points in DTF in Doing Business 218, giving it a ranking of 138 th overall. Starting a business Dealing with construction permits Trading across borders Paying taxes Registering property Getting electricity Resolving insolvency Protecting minority investors Enforcing contracts Getting credit DTF score 78

80 Doing Business in Mozambique ranking Rankings on Doing Business topics Mozambique (Scale: Rank 19 center, Rank 1 outer edge) Starting a business (137) Resolving insolvency (75) Dealing with construction permits (56) Enforcing contracts (184) Getting electricity (15) Trading across borders (19) Registering property (14) Paying taxes (117) Getting credit (159) Protecting minority investors (138) 79 Source: Doing Business 218

81 Distance to frontier score (-1) Senegal reformed 5 areas measured by Doing Business in 216/17 Where did Senegal reform to improve its business environment in 216/17? 216/17 215/16 How did Senegal do it? 1 9 Starting a Business It costs 33.8% of income per capita. It cost 62.7% of income per capita. Reduced the notary fees for company incorporation. 8 7 Getting Electricity It costs % of income per capita. Reliability of supply and transparency of tariff index is 5. It cost % of income per capita. Reliability of supply and transparency of tariff index was. Improved the monitoring and regulation of power outages Registering property It takes 56 days and costs 7.8% of the property value. It took 71 days and cost 1.2% of the property value. Lowered the costs and reduced the time to transfer property. 1 DB218 rank: 14

82 Distance to frontier score (-1) Senegal reformed 3 areas measured by Doing Business in 216/17 Where did Senegal reform to improve its business environment in 216/17? Paying Taxes 216/17 215/16 Time to obtain a VAT refund is 16.9 weeks. Time to obtain a VAT refund was 41.7 weeks. How did Senegal do it? Introduced time limits to the General Tax Code for processing value added tax cash refunds Enforcing Contracts It takes 74 days. It took 925 days. Introduced stricter pre-trial hearing rules DB218 rank: 14

83 Doing Business in Senegal score Results on individual indicators Senegal scored 53.6 points in DTF in Doing Business 218, giving it a ranking of 14 overall. Starting a business Trading across borders Getting electricity Dealing with construction permits Registering property Enforcing contracts Resolving insolvency Protecting minority investors Paying taxes Getting credit DTF score 82 Source: Doing Business 218