East African Community 2012 - Doing Business

Doing Business in the East African Community 2012

Author: Doing Business
Published: April 11, 2012 (2,422 KB PDF)

Overview

2010/11 saw improvements to the business environment in all five economies making up the East African Community (EAC) — that is, Burundi, Kenya, Rwanda, Tanzania and Uganda. The EAC saw its 5 governments implement a total of 10 regulatory reforms last year to improve the business environment for local businesses and encourage entrepreneurship in the region. Continuous improvement of the business environment is important for economies seeking to benefit from increased trade and investment through regional integration.

Main Findings

Over the past 7 years, all 5 EAC economies implemented a total of 62 regulatory reforms improving the business environment for local entrepreneurs.
Burundi was among the most active economies in the world implementing regulatory reforms across several areas in 2010/11. Burundi implemented policy changes in 4 areas measured by Doing Business: dealing with construction permits, paying taxes, protecting investors and resolving insolvency.
Rwanda made the greatest progress in improving its business environment between 2005 and 2011, followed by Burundi. Rwanda was also the second economy globally to advance in closing the gap to the frontier.
Sharing good practices could bring East Africa closer to global top performers.
New data show the importance of access to regulatory information. The rise in e-government initiatives in the region and around the world provides an opportunity to increase access to information and transparency.

Examples

Worldwide, 125 economies implemented 245 reforms making it easier to do business in 2010/11. In the EAC, all 5 economies implemented a combined 10 regulatory reforms in 2010/11 making it easier to do business — 4 were carried out in Burundi, 3 in Rwanda and 1 in each of Kenya, Tanzania and Uganda.
Burundi jumped 8 places in the ranking in the ease of doing business in 2010/11 thanks to improvements in 4 areas as measured by Doing Business 2012: dealing with construction permits, paying taxes, protecting investors 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 regulatory reforms, making it easier to do business. The economy, among others, has undertaken ambitious land and judicial reforms, introduced new corporate, insolvency, civil procedure, and secured transactions laws.
In the past 6 years, economies in the EAC implemented 11 trade facilitation reforms in areas such as the electronic submission of documents, risk management systems for inspections and joint border cooperation.
Regulatory reforms — such as the consolidation of different registration processes into 1 single point in Rwanda and Kenya — simplified the registration process in the EAC region. To start a business in the EAC now requires an average of 10 procedures and costs an average of 55% of income per capita — compared to 12 procedures and a cost of 140% of income per capita 7 years ago, in 2005.