Rwanda and Kenya bolster trade across borders to ease doing business

East Africa received a mixed bag of results in doing business in the latest report by World Bank; with Rwanda and Kenya leading while Burundi, South Sudan and Somalia brought up the rear. FOTOSEARCH 

By DICTA ASIIMWE

In Summary

• East Africa received a mixed bag of results in doing business in the latest report by World Bank; with Rwanda and Kenya leading while Burundi, South Sudan and Somalia brought up the rear.
• Rwanda tops region at position 56; Kenya moved 21 places to position 92; Uganda is ranked at 115 from last year’s 122, while Tanzania moved to position 132 from 144.
• 10 measures were used to come up with the ranking are: Starting a business; dealing with construction permits; getting electricity; registering property; getting credit; protecting minority investors; paying taxes; resolving insolvency; enforcing contracts and trading across borders.

East Africa received a mixed bag of results in doing business in the latest report by World Bank; with Rwanda and Kenya leading while Burundi, South Sudan and Somalia brought up the rear.

The World Bank cited implementation of projects meant to improve trading across borders as key to the good showing while civil strife hampered those countries that did poorly.

According to the World Bank’s Doing Business 2017 report, Rwanda — ranked 56 from last year’s 59 — remains the easiest place to start a business in the region. Rwanda is also the second easiest country within which to do business in sub-Saharan Africa after Mauritius, which is ranked 49th.

Kenya — the bloc’s biggest economy — though at second place, was the most improved, moving 21 places up the ranking from 113 last year to 92. Uganda is ranked at 115 from last year’s 122, while Tanzania moved to position 132 from 144.

Troubled by civil strife, Burundi is ranked at 157. South Sudan, another East African country dogged by incessant conflict, was ranked at 186, four places short of being the worst performing country in the world. At 190, Somalia which also suffers the debilitating effects of war, terrorism and a fledgling government is ranked as the worst country to start a business in the world.

Rwanda saw its biggest improvement in its trading across borders measure, having moved 44 places from last year’s position of 131 to position 87 now. Uganda moved up five places in the trading across borders measure, while Kenya moved up two places.

Tanzania, which was hailed for improvements at Dar es Salaam Port, remained in the same position of 180 in the trading across borders measure due to the country’s high border compliance costs for importers and exporters.

Access to credit

But, Tanzania improved its overall ranking because of its rating in improving access to credit where the country moved up 108 places from last year’s 152 to 44 this year.     

The country’s credit bureau system, which had by January 2016 registered 6.5 per cent of the adult population, is expected to ease the cost of borrowing money.

According to the World Bank doing business manager Rita Ramalho, 10 measures were used to come up with the ranking.

They are: Starting a business; dealing with construction permits; getting electricity; registering property; getting credit; protecting minority investors; paying taxes; resolving insolvency; enforcing contracts and trading across borders.

According to the World Bank’s Doing Business 2017 report, the East African Community did well in the trading across borders measure on account of several investments that have mostly been financed by TradeMark East Africa. These include investments in improvement of infrastructure at the region’s different entry points.