10 November 2014
Practice Group(s):
Africa
World Bank Publishes New Findings on Doing
Business in Africa
Global Africa Alert
By James Green and Ngofeen Mputubwele
The World Bank has recently released the 2015 edition of its annual Doing Business
report. This publication is significant for businesses considering expansion in Africa
because it signals which countries may be poised to attract and support more investment
in the coming year.
Background on the Report
The Doing Business report is the World Bank’s annual publication that analyzes how
easy it is to do business around the globe. This year, the World Bank worked with more
than 10,000 experts worldwide to measure key factors that impact business operations in
189 countries. Through questionnaires, conference calls, and visits to selected countries,
the World Bank surveyed several topics, including the procedures, cost, and time
necessary to start a business in a given country, transfer title to real property, enforce a
contract, import and export goods, obtain electricity, and mediate a minority shareholder
dispute. After aggregating this information into a single “ease of doing business” ranking
for each country, the Doing Business report presents global and regional emerging
trends.
Although the report examines the ease of, and barriers to, doing business for
domestically-owned small and medium-sized enterprises, the report’s findings are
important for all companies. The report measures regulatory procedures that can affect
any business operating in a given national market. In addition, policymakers consider the
report in deciding how to reform procedures that impact commerce. 1 Thus, for companies
and investors considering expansion into African markets, Doing Business 2015 is a key
indicator of which countries may have the most (or least) conducive environments to
operating a business.
Africa’s Performance in Doing Business 2015
Doing Business 2015 noted several improvements to doing business in Africa in the past
year. The report’s findings allow for useful comparisons on the regional and national
levels.
In sub-Saharan Africa, the report ranks Mauritius, South Africa, and Rwanda as the three
easiest places to do business. These countries also performed well on an international
level, joining the top 50 performers worldwide. Thirty-nine of the 47 countries in sub1
Every year, the Doing Business report generates significant attention. Last year’s report received almost 6,000
media citations within two weeks of its publication, and the Doing Business website generated over half a million
page views within ten days of the report’s publication. See World Bank Group, DB News, Doing Business: Measuring
Business Regulations, http://www.doingbusiness.org/newsletters/dbnews-11 (last visited Nov. 7, 2014); World Bank
Group, Starting a Business Questionnaire, Doing Business: Measuring Business Regulations,
http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Methodology/SurveyInstruments/DB15/DB15-Starting-a-Business-questionnaire.pdf (last visited Nov. 7, 2014).
World Bank Publishes New Findings on Doing Business
in Africa
Saharan Africa covered in the report implemented one or more regulatory reforms
making it easier to do business. Of the 230 business reforms documented worldwide,
countries in sub-Saharan Africa were responsible for the largest share.
In North Africa, the report found that it is easiest to do business in Tunisia and Morocco,
which ranked 60th and 71st globally. After a significant gap came Egypt, ranking third in
North Africa and 112th worldwide. North African countries also achieved notable rankings
in the individual subject areas measured by the report. For example, Tunisia ranked 38th
worldwide for ease in getting electricity, coming in above Australia (55), the United States
(61), and the United Kingdom (70). 2
The ranking of African countries within the report’s individual subject areas is noteworthy.
For instance, the countries with the strongest protections for minority investors are South
Africa (17), Mauritius (28), Ghana (56), and Seychelles (56). The countries in which it is
easiest to start a business are Burundi (18), São Tomé and Príncipe (23), and Mauritius
(29). Finally, the easiest countries for registering property are Rwanda (15), Ghana (43),
and Sudan (46).
Top Ten and Bottom Ten Performers in Africa
TOP 10
COUNTRIES
GLOBAL
RANKING
BOTTOM 10
COUNTRIES
GLOBAL
RANKING
Mauritius
28
Mauritania
176
South Africa
43
178
Rwanda
46
Congo (Republic
of)
Guinea Bissau
Tunisia
60
Angola
181
Ghana
70
Congo (DRC)
184
Morocco
71
Chad
185
Botswana
74
South Sudan
186
Seychelles
85
187
Namibia
88
Central African
Republic
Libya
Swaziland
110
Eritrea
189
179
188
The Most Improved Nations
Doing Business 2015 highlights the performance of the 10 most-improved countries
worldwide. Five of these countries are in sub-Saharan Africa, and several of their reforms
bear additional consideration:
• Benin: Benin reduced the minimum capital requirement and fees for starting a
business; reduced the number of documents needed for customs clearance of
imports; introduced greater disclosure requirements for related-party transactions; and
made it possible for shareholders to inspect documents and appoint auditors to
inspect such transactions.
2
Numbers in parentheses represent a country’s international ranking within the relevant subject area (e.g., getting
electricity).
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World Bank Publishes New Findings on Doing Business
in Africa
• Democratic Republic of Congo: The Democratic Republic of Congo simplified its
corporate income tax returns; abolished a minimum tax that was payable based on a
company’s size; established a credit registry; and increased disclosure requirements
for related-party transactions.
• Côte d’Ivoire: Côte d’Ivoire digitized its land registry system; lowered the property
registration tax; reduced the minimum capital requirement for starting a business; and
increased disclosure requirements for related-party transactions.
• Senegal: Senegal simplified the transfer of property by removing the requirement that
property transfers first be authorized by the tax authority (instead, one need only notify
the tax authority); abolished the vehicle tax; made declaration forms for the valueadded tax (VAT) available online; and reduced the time necessary for processing
building permit applications.
• Togo: Togo reduced the property registration and the payroll tax rates; enabled the
publication of notices of incorporation; and introduced greater requirements for
disclosures in related-party transactions.
Overall, the report shows positive improvements in Africa. Several countries have
implemented practical reforms, reducing the complexity and cost of regulatory processes
and strengthening legal institutions to simplify doing business. On an international scale,
however, most African countries fall low in the report’s ranks, and additional improvement
is needed.
Conclusion
Companies considering expansion in African markets should review Doing Business
2015 for several reasons: the report provides a database for researching specific issues
and costs that affect operating a business in Africa, it influences governments and their
policies towards doing business in Africa, and it shapes public perceptions towards doing
business in the region. The combination of these factors sheds light on which countries in
Africa may be optimal locations for a company to expand.
Like any index, the Doing Business 2015 report cannot measure all the factors that
influence doing business in Africa; therefore, it is critical to seek legal counsel with
experience in the region. K&L Gates has extensive experience in Africa, having worked
in more than 40 countries to represent public and private companies, governments, and
state-owned enterprises in their business, financing, regulatory, compliance, litigation,
and dispute resolution activities. K&L Gates has over 2,000 lawyers on five continents,
and nearly 100 of those lawyers practice in the firm’s Africa Group, which regularly helps
businesses make informed decisions about doing business in Africa.
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World Bank Publishes New Findings on Doing Business
in Africa
Authors:
James Green
james.green@klgates.com
+44.(0)20.7360.8105
Ngofeen Mputubwele
ngofeen.mputubwele@klgates.com
+1.412.355.8915
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