Irony As Kenya Ranks Among Top 10 In The World For Starting A Business and Getting Credit

A study by World Bank has ranked Kenya among the top 10 countries in the world where one can easily start a business and get credit.

In the sturdy, World Bank puts Kenya, Rwanda, and Zambia among the world’s top 10 in the latter category. On average, it now takes around 20 days and costs 33.5 percent of income per capita to start a new business in the region, substantially faster and less expensive than the 62 days and 305 percent of income per capita it took in 2003.

The Kenyan economy was also ranked best on doing reforms, as the country carried out six reforms, including improving the reliability of its electricity supply and introducing an online system for social security contributions, positioning its third highest in the regional rankings, behind Mauritius and Rwanda.

In the ranking trends, Mauritius is ranked as the best economy in Africa with an ease of doing business, with Rwanda and Kenya falling second and third respectively.

With four reforms implemented this year, Mauritius remains the easiest place to do business in the region, ranking 13th globally. Among other reforms, the country made resolving insolvency easier and improved contract enforcement.

From the Doing Business study, two Sub-Saharan African countries have been featured in the top 50 countries that have significantly improved the ease of doing business globally.

Nigeria which is the largest economy in Sub-Saharan Africa alongside Togo enjoyed a spot in the top 50 most improved economies in doing business.

Economies of the region enacted 73 reforms in the 12 months leading to May 1, down from a record high of 108, and the number of countries implementing at least one reform fell to 31 from 40. The regional average ease of doing business score was 51.8 on a scale of 0 to 100, below the OECD high-income average of 78.4 and the global average of 63.0.

“With reforms led by the Organization for the Harmonization of Business Law in Africa last year and the Central African Economic and Monetary Community this year, economies in Sub-Saharan Africa have demonstrated how regional cooperation can help to effectively improve the business climate,” said Santiago Croci Downes, Program Manager of the Doing Business Unit.

Despite recording significant improvements in the ease of doing business, Africa still lags behind in terms of development. While some African countries enjoyed being featured in the top rankings, 20 African countries are found at the bottom of the world rankings.

African economies lag behind in the following areas which need prompt improvement in the coming years.
Electricity connections- it costs more than 3100 percent to get included in the grid in Sub Saharan Africa, whereas it costs just 400 percent and in the Middle or 272 percent in East North Africa, Europe, and Central Asia.

Business across borders and tax payments- It takes more than 96 hours for businesses to comply versus 3.4 hours in OECD high-income economies, and small and medium-sized businesses in their second year of operation need to pay taxes more than 36 times a year, compared to an average of 23 times globally.