Rwanda Led All Nations in Business ‘Reforms’ World Bank Says

[Koba]

Rwanda Led All Nations in Business ‘Reforms,’ World Bank Says
​

By Sandrine Rastello

Sept. 9 (Bloomberg) -- Rwanda, the African nation torn apart by genocide in 1994, made more business-friendly changes to its regulations in the past year than any other government, a World Bank report showed.

The sub-Saharan country vaulted to the 67th from the 143rd rank in the bank’s 2010 “Doing Business Report,” ahead of India, Italy and Turkey. The index ranks 183 participants by their rules for setting up, running and closing a business.

“The reforms in Rwanda didn’t happen overnight -- Rwanda started reforming in 2001,” said Sylvia Solf, the report’s main author, in an interview last week. Small, landlocked nations such as Rwanda “have no choice, they don’t have the big markets, so they have to reform.”

Singapore topped the list, followed by New Zealand, Hong Kong, the U.S. and the U.K.

The report, which helps private investors decide where to direct funds, showed some emerging economies losing ground, with China sinking to 89th from 86th place and Brazil slipping to 129th from 127th.

While countries such as China and India “have a lot of advantages” and have implemented reforms, “there is still of lot of bureaucracy,” Solf said.
Rwanda, a country with about the same land mass as Maryland, improved regulations that eased access to credit, simplified business formation, strengthened minority-shareholder protections and sped up trade and property registration, according the report. It became the first sub-Saharan country to make the most improvements.

Egypt, Moldova

Egypt, Liberia, Moldova, Kyrgyzstan and Tajikistan were other countries that gained ground, the report showed.

Iraq fell to 153rd from 150th place, while Afghanistan improved to 160th from 168th.

The number of new regulations aimed at making it easier to do business rose globally by 20 percent to 287, a record, in the year through May, even as the worst global recession since World War II set in, according to the report. Most of them were aimed at cutting red tape.

While the ranking doesn’t take into account market rules or the strength of financial systems, the measures do include court and bankruptcy procedures that “can influence how well firms cope with the crisis and are able to seize opportunities when recovery begins,” the report said.

The financial crisis of the past two years may also encourage governments to ease procedures for businesses, according to Solf.

Crisis ‘Reforms’

“Historically, sometimes the financial crises have triggered reforms in areas that are covered in the report, insolvency regimes, insolvency systems, commercial courts,” she said.

The report rates countries on rules that affect starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business. It focuses on small- to medium-size companies.

At the same time, the report leaves out criteria such as macroeconomic stability, corruption and regulations specific to foreign investment.

The report tweaked methodology for its Employing Workers Indicator, one of the criteria in the ranking that has been criticized by some U.S. policy makers for encouraging countries to reduce worker protection.

For instance, “the calculation of the redundancy cost was adjusted so that having severance payments or unemployment protections below a certain threshold does not mean a better score for an economy,” the report showed.

To contact the reporter on this story: Sandrine Rastello in Paris at srastello@bloomberg.net

 

[Ngida1]

Naona Tanzania haikutajwa, wakati ukitoa ufisadi sisi pia chini ya mzee wetu JK nadhani tumepiga hatua kubwa mbele kuliko hao Rwanda. Au ni njia tu ya kuisaidia Rwanda ije juu baada ya ile 'genocide' yao?

 

[Bad Seed]

Naona Tanzania haikutajwa, wakati ukitoa ufisadi sisi pia chini ya mzee wetu JK nadhani tumepiga hatua kubwa mbele kuliko hao Rwanda. Au ni njia tu ya kuisaidia Rwanda ije juu baada ya ile 'genocide' yao?

mmmmmmmmhh??????????😕😕😕 are you sure?? Dont hate, congragulate.

 

[Nyauba]

Naona Tanzania haikutajwa, wakati ukitoa ufisadi sisi pia chini ya mzee wetu JK nadhani tumepiga hatua kubwa mbele kuliko hao Rwanda. Au ni njia tu ya kuisaidia Rwanda ije juu baada ya ile 'genocide' yao?

Doing business report inaangalia reforms initiated and implimentation process katika mazingira ya biashara.

Tz tuko kwenye track nzuri kwani tumefanya reforms nyingi katika uchumi wetu katika miaka 10 iliyopita kulikom wakati wowote wa historia yetu kiuchumi.

mapungufu yako katika utekelezaji hasa bureaucracy inayosababishwaa na limited capacity na usimamizi imara.

Jk anachotakiwa ni kukaza buti na kusimamia reforms kikamilifu kwani mtangulizi wake (BWM) alishamwekeaa mezani tayari.

BEST programe is among the initiatives, LSRP na PSRP ni mifano michache tuuu...bila kusahau MMEM na MMES.

 

[Josh Michael]

it is really suck to see all these here and not in Tanzania.. We need to more reforms in our bussiness sector man

 

[JokaKuu]

..wanazungumzia masuala ya property rights, access to credit, na urahisi ktk kuanzisha biashara.

..inawezekana mataifa mengine yalishafanya hizo reforms kwa hiyo hawawezi kupewa credit na huu utafiti uliofanyika.

TOP 10 REFORMERS:

1 - Rwanda

2 - Kyrgyz Republic

3 - Macedonia, FYR

4 - Belarus

5 - United Arab Emirates

6 - Moldova

7 - Colombia

8 - Tajikistan

9 - Egypt

10 - Liberia



TOP 10 REFORMERS:



Colombia and Egypt have been top global reformers in four of the past seven years.

 

[Mnairobi]

Way to go Rwanda, welcome to the EAC!

 

[JokaKuu]

..hapa kuna uchambuzi wa hii ripoti toka Kenya.

KENYA LOSES GRIP ON BUSINESS REFORMS.

The business environment in Kenya has changed for the worse in the past 12 months, a new report indicates, pointing to increasing difficulties in accessing permits and rampant corruption.
The World Bank and its private sector-leaning arm, the International Finance Corporation (IFC), says doing business has become more difficult in Kenya causing the country to drop by 11 points in the global ranking of nations in terms of ease of doing business.
Kenya is ranked in position 95 in the Doing Business 2010 report down from last year's position 84 – indicating that the government is losing its grip on the reform agenda it began four years ago to improve the business environment.
The report could strike a major blow to Kenya's effort to prop up its flagging economy by attracting foreign direct investments to support sluggish activity that has left many business leaders cautious with spending to guard their profit margins.
"The appetite for foreign investment is already low globally and a destination needs to be exceptionally attractive to win a portion of this little remaining portion," said Robert Shaw, an independent analyst.
The latest findings present a major setback to the government, which has only recently received international recognition for driving reforms that significantly improved the business environment in the country.
One such key area of reforms has been in the business licensing regime where some 315 licences were eliminated in 2007 and another 379 of the 1,325 identified as hindering growth of small businesses, simplified.
The government last year cut down the number of licences required to set up a business from 300 to 16 and has since lined up an additional 337 business licences for review.
Finance minister Uhuru Kenyatta has recently appointed a special committee to look into the permits and recommend whether they should be simplified or eliminated all together depending on their relevance.
"It is for this reason that an electronic register of all valid business licenses in Kenya has been developed to ensure that licensing reforms are not undermined by creeping re-regulation," he said at the launch of the national electronic registry in Nairobi a fortnight ago.
It has now emerged that these reform efforts have yet to bear fruit in the business environment, culminating to the World Bank and IFC's finding that the business landscape is not yet even in terms of regulation pointing to frustratingly high cost of landing construction permits.
"Kenya increased the cost of getting construction permits," the World Bank says in the Doing Business 2010 report.
Players in the construction industry agreed with the findings, saying the licensing reforms have failed to tackle bureaucracy that is the main obstacle to investment in the country.
"The process of obtaining the construction permits is simply cumbersome, bureaucratic and without transparency and this boils down to bloated cost in terms of time and other fundamentals," said Mr Elijah Agevi, CEO Research Triangle Africa.
Mr Agevi reckons that the situation has been worsened by a silent war between local authorities and the central government over who was in-charge of such permits.
"It has become akin to giving with one hand and taking with another in that the central government tries to cut back on the number of licences but council keep coming up with resolutions that impose new conditions that unfortunately come at a cost," he said.
Expiry of physical plans in key urban areas such as Nairobi have also left investors at the mercy of corrupt and bureaucratic officials in local authorities bent on taking advantage of the situation.
"Only about 30 per cent of urban centres are currently planned, an indication of how people are reaping from the confusion through deliberate delays in approving projects," Mr Agevi said.
Ibrahim Mwathane, a surveyor, said lengthy procedures of approving construction permits had put off many investors.
The African Competitiveness Report 2009, published in June jointly by the World Bank, the African Development Bank (AfDB) and the World Economic Forum indicates that corruption and patronage have continued to damage Kenya's viability as an investment destination.
"The country's public institutions continue to be assessed as highly inefficient, plagued by undue influence and high levels of corruption," the report says.
Mr Shaw dismisses the regulatory reforms introduced by Treasury as lacking depth and only tending to concentrate on certain sectors of the economy while leaving out others.
"There is need to coordinate reforms because we keep witnessing clashes in roles by regulators. A notable case has been the Kenya Bureau of Standards that from time to time finds itself at loggerheads with other agencies on regulatory matters," he said.
World Bank's acting vice president for Financial and Private Sector Development, Penelope Brook said business regulation would play a critical role as economies step out of recession.
"Business regulation can affect how well small and midsized firms cope with the crisis and seize opportunities when recovery begins," said Brook.
"The quality of business regulation helps to determine how easy it is to reorganize troubled firms to help them survive difficult times, to rebuild when demand rebounds, and to get new businesses started."
But despite the drop in competitiveness, the new survey acknowledged government efforts that resulted in improved access to credit following the implementation of a law on credit bureaus which provides a framework for regulated, reliable system of sharing credit information.
Last year's amendment of the banking act compels banks to share divulge details about their non-performing loans to credit reference bureaus. But as of yet, CRBs themselves are yet to be licensed by the Central Bank of Kenya (CBK).
Mrs Rose Detho, the supervision director at CBK, recently said they were working with the Kenya Bankers Association to put in place the necessary operational framework for credit information sharing.
A Business Leaders' Confidence Index, separately released by research firm Synovate two weeks ago, also showed that investors considered Kenya unattractive.
Those interviewed including executives from Nigeria, Ghana and Zambia reckon that Kenya looks unattractive compared to its peers Tanzania and Uganda.
Kenya scored 53 points in a scale of 100 as an investment destination compared to Tanzania (54), Uganda (68) and Ghana (73).
"The looming East African Community integration might benefit Uganda more, if we go by this index," said Mr George Waititu, the CEO at Synovate, arguing that the bureaucratic business regime and the heightened political risks helped lower Kenya's score.
The five member countries of the EAC are expected to have an operational common market by January 2010, creating a market of 126 million people with a total GDP of $55 billion (Sh4.4 trillion).
As Kenya and other EAC neighbours; Tanzania and Uganda faltered, the new World Bank survey report showed that Rwanda had defied the trend to record an impressive performance climbing to position 67 this year from 143 in last year.
"Rwanda has steadily reformed its commercial laws and institutions since 2001. In the past year it introduced a new company law that simplified business start-up and strengthened minority shareholder protections," the survey pointed out.
In Rwanda, entrepreneurs are now able to start a business in just two procedures that cumulatively last three days while related party transactions are subject to stricter approval and disclosure requirements. The survey further found that legal provisions determining directors' liability in case of prejudicial transactions between interested parties were also tightened.
"Rwanda improved regulations to ease access to credit through two new laws. Its new secured transactions act facilitates secured lending by allowing a wider range of assets to be used as collateral.
The law also makes out-of-court enforcement of movable collateral available to secured creditors and gives them absolute priority within bankruptcy," the World Bank said.

 

[JokaKuu]

..nadhani mwaka 2007 Tanzania na Ghana zilikuwa ranked as the best place to do business in Africa. Rwanda walikuwa ranked very low ktk ripoti hiyo.


..kitu kinachotakiwa kufanyika Tanzania sasa hivi ni ku-improve our infrastructure[barabara,maji,umeme]. ni lazima kuhakikisha GHARAMA za kufanya biashara au kuendesha kiwanda Tanzania ni rahisi kulinganisha na our competitors.

 

[WomanOfSubstance]

Naona Tanzania haikutajwa, wakati ukitoa ufisadi sisi pia chini ya mzee wetu JK nadhani tumepiga hatua kubwa mbele kuliko hao Rwanda. Au ni njia tu ya kuisaidia Rwanda ije juu baada ya ile 'genocide' yao?

Ndugu. our beloved Tz haiko anywhere near Rwanda.Post genocide Rwanda is bad news my friend.Hii inatokana na uongozi madhubuti, seriousness na mipangilio iliyo makini.Tz sasa tutannyimwa soft loans kwa sababu ya Ufisadi uliokithiri.Au kwa tafsiri yako ufisadi ni nini maana ni kama vile unaona ufisadi siyo variable au indicator of failure in governance.

 

[Masanja]

Ndugu. our beloved Tz haiko anywhere near Rwanda.Post genocide Rwanda is bad news my friend.Hii inatokana na uongozi madhubuti, seriousness na mipangilio iliyo makini.Tz sasa tutannyimwa soft loans kwa sababu ya Ufisadi uliokithiri.Au kwa tafsiri yako ufisadi ni nini maana ni kama vile unaona ufisadi siyo variable au indicator of failure in governance.

WoS labda useme wewe..wengine tukisema hapa tunaambiwa kwamba tunamtetea muuaji KAGAME!

Lakini ndo hivyo.....kikubwa ni uongozi..hakuna miracle. Juzi ulimsikia President wetu anafurahi kwamba alienda US akapewa Vyandarua....baada ya hivyo vyandarua kuchanika..sasa sijui tutarudi kwa akina RAY Cambers au.. You wonder where are our priorities!

Hivi kuna mtu anafikiria kwamba ana "uzalendo" kuliko wananchi wenzake yet we are all suffering under the same system? No way..Raisi wetu hayuko makini kabisa. Anaweza kuwa na personality nzuri lakini kichwani kwa kweli..I do wonder....what he carries.

 

[TIMING]

..wanazungumzia masuala ya property rights, access to credit, na urahisi ktk kuanzisha biashara.

..inawezekana mataifa mengine yalishafanya hizo reforms kwa hiyo hawawezi kupewa credit na huu utafiti uliofanyika.

Naona mpaka nchi kama Kyrgis, au wazee wa ma-powder Colombia, nci ya shaghalabagala Liberia wote hao wametuacha...

 

[JokaKuu]

MTM,

..kaazi kweli..hata mimi nimeona hizo nchi za ajabu-ajabu zimetuacha.

..soma hapa Malawi nao haooo!! kuna green revolution huko na hakuna Mtanzania amegutuka. kuna jamaa zangu walikuwa wanapeleka mahindi huko 3 yrs ago.

MALAWI'S GREEN REVOLUTION

Africa's elusive green revolution may be several steps nearer after a pioneering experiment in seed and fertilizer subsidies to smallholders in Malawi. On his way home from a session explaining how the programme works to the UN development agency recently, the agricultural economist Idrissa Mwale came into the Guardian's offices to talk through the Farm Input Subsidy Programme that he coordinates.
Four years ago, Malawi was in the grip of a terrible, drought-induced famine that left nearly 40% of the population in need of food aid. Yet within two years, it had become a net maize exporter. Having enough rain has helped, but twice as important, according to independent assessment, has been government subsidy for seed and fertilizer.
Malawi, like other sub-Saharan African countries, has tried government intervention before, sometimes with considerable success. But the 1980s drive for structural reform, which led to a sharp withdrawal of government from the agricultural sector, ended most of the support programmes. Where they were tried in the late 1990s, they tended to be too small in scale and too short-lived to make a difference.
"The policy has always been to increase productivity," Idrissa Mwale explained, "but it has failed in the past because of inadequate commitment and a shortage of leadership."
Now there is renewed interest in increased agricultural productivity as an engine of wider growth. Food security for the 80% of Malawians who farm smallholdings was the first, but not the only objective, and the scheme has adapted to the difficulties encountered along the way.
The programme has always involved the use of vouchers rather than the actual provision of low cost inputs that might be traded rather than used by the targeted recipients. The vouchers reduce the cost of fertilizer and hybrid seed by two-thirds. To encourage the production of cash crops, the smallholder has the choice of tobacco or maize fertilizer, and after the first year nitrogen-fixing legume seeds were added to the choice as participants were encouraged to consider the fertility of their soil.
The way the group of recipients is selected has evolved. At first it was left to local village leaders, but there were allegations of favouritism and even corruption. This year a team approach has been tried successfully, where officials from the Ministry of Agriculture work with local government, village chiefs, police and religious leaders.
They convene a village meeting at which the poorest households are identified by the villagers themselves. As well as being Malawi citizens, recipients are unlikely to have cattle or even a bicycle and certainly no income from off the farm, which will usually be only about 0.4 hectares (1 acre) in size.
And unlike earlier schemes where a package of seed and fertilizer was given away, the farmers have to contribute a certain amount of the cost themselves. Government intervention evened out the sharp spike in fertilizer prices over the past two years, which sent the cost of the programme in 2007-08 to US$120,000, and the government element of it has risen sharply. But the results have been astonishing.
In the drought year, maize yields were down to 0.8 tonnes per hectare from a previous average of around 1.2 tonnes. (In Iowa in the US, the average rain-fed maize yield is 10 tonnes per hectare). Now yields are up to 4 tonnes per hectare and average around 2.2 tonnes.
Farmers have been instructed in new sowing techniques, and local radio broadcasts are used to remind them of when to sow and when to apply fertilizer. The government has also started to distribute vouchers for pesticides to improve the quality of stored maize, as well as building communal silos and regional storage depots.
Each year, about a third of those who have received support "graduate" from the programme to make room for others. Last year, the best year yet for the programme, maize production was almost a third more than national consumption.
So far, about half of Malawi's farmers have benefited. The scheme, initially viewed with scepticism by external donors, now has widespread support from the EU and the World Bank. The UK's Department for International Development gives logistical help.
"No farmers depend on food aid now," Mwale said. "The rate of technology adoption has gone up. The government is looking at the possibilities of a tractor rental scheme. And foreign earnings have risen." Last year, Malawi's growth rate was the second highest in southern Africa.
But it has not been an easy process, and hard lessons have been learned.
"Leadership and commitment," Mwale said, "they are the two most important differences from earlier attempts. But we have also committed the resources, we have planned very carefully and the implementation – the timing of distribution, for example – has been closely monitored.
"It is very important," he concludes, "to do what you say you are going to do."