Africa Rising: Starting a business? Look south of the Sahara.
The latest Ease of Doing Business Index found the vast majority of sub-Saharan countries have improved their business environments in the past year, and six made the top 15 most improved.
A vendor outside Kigali, Rwanda, offers hard-boiled eggs for sale.
Mary Knox Merrill/Staff/File
Freetown, Sierra Leone
鈥� Africa Rising is a weekly look at business, investment, and development trends.
Entrepreneurs, listen up: Sub-Saharan Africa isn鈥檛 such a bad place to open up shop these days, thanks to legal and regulatory reforms that have made life easier for businesses in many parts of the continent.
The recent improvements have been totted up in the latest Ease of Doing Business Index, a set of rankings published each year by the World Bank and the International Finance Corporation. Taking into account factors like how many days it takes to set up a new company and how much it costs to get a shipping container through a port, the index serves as a global guide to business friendliness.
鈥淓conomic activity requires good rules 鈥� rules that establish and clarify property rights and reduce the cost of resolving disputes,鈥� Janamitra Devan, the World Bank鈥檚 vice president of Financial and Private Sector Development, wrote in the report鈥檚 preface. 鈥淭he objective is regulations designed to be efficient, accessible to all and simple in their implementation.鈥�
Sub-Saharan Africa has a reputation for weak legal institutions and lax property rights, but the region has made some huge strides, as this year鈥檚 index shows.
Thirty-six of the region鈥檚 46 economies have improved their business environments in the past year, the report found. That鈥檚 a five-year record for the region, and it means that sub-Saharan Africa has made more progress than any other part of the world except Eastern Europe in making life easier for businesses. 聽
Rwanda is the continent鈥檚 standout performer, having improved its business environment more than any country in the world, bar one 鈥� Georgia 鈥� since 2005. Among Rwanda鈥檚 recent changes: slashing the fees associated with starting a business, making credit information more readily available, and reducing the frequency of a company鈥檚 value-added tax filings from monthly to quarterly. Rwanda now ranks 45th overall in the index, just one slot behind Spain.
Along with Rwanda, five other sub-Saharan nations 鈥� Burkina Faso, Mali, Sierra Leone, Guinea-Bissau, and Senegal 鈥� fall within the index鈥檚 top 15 most improved.
But those countries are starting from a very low level, and there鈥檚 still a long way to go. Despite the recent gains, sub-Saharan Africa as a whole remains the world鈥檚 least business-friendly region.
Just consider the case of Ghana, the highest-ranked country in West Africa. On average, it costs $1,315 and takes 29 days to import a shipping container through the country鈥檚 main port. That鈥檚 compared with $439 and four days in Singapore, the country that came out at the top of this year鈥檚 rankings.
South Africa, by far most powerful economy in sub-Saharan Africa, is also the most friendly to businesses. The country placed 35th in the latest index, up one slot from the previous year.
The United States ranked fourth this year, behind Singapore, Hong Kong, and New Zealand.