On Tuesday, October 31, the World Bank released its annual Doing Business report. The Doing Business indicators measure aspects of business regulation and their implications for firm establishment and operations. The report assesses economies using 11 indicators, including starting a business, getting credit, and trading across borders, among others. Sub-Saharan Africa showed improvement in many areas, but particularly across categories driven by the adoption of electronic platforms and other e-governance initiatives.
Research Analyst - Africa Growth Initiative
Since last year’s report, sub-Saharan African countries have implemented the most reforms with Nigeria, Zambia, and Malawi among the top-10 most improved countries globally. Notably, Figure 1 below shows that sub-Saharan Africa’s implemented reforms actually have had the greatest impact per reform, on average, when it comes to catching up to global best practices (which the report refers to as the “frontier score”). Despite this achievement, according to the report, this large impact is because sub-Saharan Africa is currently furthest from global best practices, so reforms have greater a impact on bringing it closer whereas the impact is incremental for regions closer to the top.
Figure 1. The average number of reforms per economy is highest in South Asia but the average impact is biggest in Sub-Saharan Africa
As noted in Figure 1, trading across borders and starting a business were common areas of reform in sub-Saharan Africa. Though the region ranks 137th globally in the trading across borders indicator, it is making progress: The region accounted for 46 percent of all trading across borders reforms. Below, Figure 2 shows the cumulative improvement made in reducing time for trade across borders through the implemented reforms. In sub-Saharan Africa, almost half of all time savings came from the introduction of or upgrades to various electronic processing systems while most others come from infrastructure improvements.
Figure 2. Reforms affecting customs, especially those regarding the implementation of electronic systems, produce the highest time savings across regions
Introduction of electronic platforms and online access to information reforms had major impacts in several countries across different indicators besides just trading across borders. For example, Namibia made significant improvement in enforcing contracts in part due to the implementation of a new case management and information and communications system for its judiciary (Figure 3). According to the report, the seven-year reform process has led to a case clearance rate over 110 percent higher than some advanced economies.
Figure 3. Namibia has reduced its case backlog by implementing a case management system
In other e-governance reforms, Botswana, Kenya, Rwanda, and Zambia either implemented or improved their electronic tax compliance systems while Angola, Mauritania, Senegal, and Togo are in the process of introducing online tax compliance systems. Other countries, including Benin, Ghana, and Gabon, improved transparency in the construction sector by making relevant regulatory information available online.