The World Bank's annual Doing Business 2020 report is now available. This report ranks 190 countries across the globe based on an index score reflecting the business environment in each country.
Doing Business evaluates two key factors: the extent of implementation of business policies and cost requirements (such as time and fees required for necessary procedures). Based on these, this index indicates whether or not a country has a fair and efficient environment in which to conduct business.
African governments are highly conscious of their country's position in the Doing Business report. Despite the ranking not reflecting factors such as market size or competitive landscape, and thus often not representative of the actual "ease of doing business" or business potential, it remains a metric frequently referenced in the financial decision-making process for investments and loans. Many countries form dedicated task forces and proactively amend policies and laws in an effort to increase their rankings.
In the Doing Business report, the scores for each of the following 10 indicators (based on factors such as the extent of implementation of business policies and cost requirements) are captured into a single "ease of doing business" index:
- Starting a business
- Dealing with construction permits
- Getting electricity
- Registering property
- Getting credit
- Protecting minority investors
- Paying taxes
- Trading across borders
- Resolving insolvency
- Enforcing contracts
In the 2020 rankings, the top 10 countries were:
6. South Africa
(#1 - 6 remained unchanged from last year.)
Results for all 54 countries over the last 5 years starting in 2016 are compiled here. The delta in the rankings reflect that of the 2019 report versus the 2020 report.
Doing Business 2020 ranking of the 54 African countries
In contrast to Mauritius, Morocco, and Kenya remaining consistent in their top ranks, Rwanda notably decreased 9 places. This was due to their score being negatively impacted from the evaluation of the "Protecting minority investors" category which requires at least 10 private companies listed in the country's stock exchange.
On the other hand, Togo rose a massive 40 places in the report. This year, Togo authorities visited Rwanda to receive guidance on areas of improvement, and implemented measures that delivered on their proclaimed "#1 in West Africa" goal. Togo rose through the ranks in the "Starting a business", "Registering property", and "Getting credit" categories.
Côte d'Ivoire, Uganda, Senegal, Nigeria, Niger, and Zimbabwe all showed double-digit improvements.
Improvements noted for Nigeria includes the implementation of a platform consolidating the Corporate Affairs Commission (which oversees taxes and business registration), the land registry system in Lagos, the policy granting permits to engineers to improve electricity supply, measures to expedite commercial small claim litigation, and the Ports Authority's e-payment system.
Improvements noted for Zimbabwe includes the online business name registry lookup system, reduction of license fees, expedition of construction permits, and making progress in business policies protecting rights related to insolvency and obtaining credit.
From the graph above illustrating the transition since 2016, Kenya stands out in its rapid upward progress. This year, Kenya showed improvements in "Dealing with construction permits", "Getting electricity", "Getting credit", "Protecting minority investors", "Paying taxes", and "Resolving insolvency" categories. In particular, Kenya's efforts to increase transparency by making building permit requirements publicly available online, stabilize electricity supply by building a new substation, an automatic air brake switch, and an RMU in Nairobi, and make paying taxes easier by implementing an online filing and payment system were highly rated.
Japan ranked 29th this year, a significant improvement from 38th place last year.
To request a chart with the assessments for all 54 African countries across each of the 10 indicators in Excel format, please reach out to us via the Contact Us
For the 2019 results of the Doing Business report, please see here
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