Ghana drops in World Bank ease of doing business ranking

Independence ArchGhana’s ranking in ease of doing business has reduced slightly from 112th to 114th in the Doing Business Report, a flagship report of the World Bank which assesses business regulations and the ease of doing business in countries.

The report noted that there is a strong association between performance in the ease of doing business ranking and performance in other measures of economic competitiveness and quality of government and governance.

“Economies that rank well on the ease of doing business also score well on such measures as the Global Competitiveness Index and Transparency International’s Corruption Perceptions Index.”

Ghana’s new rank in the previous year’s report – Doing Business 2015 – was 112th after the World Bank revised the rankings in accordance with a change in the methodology of the annual report.

Though Ghana’s overall score in the ranking improved from 57.65 (over 100) in 2015 to 57.69 in 2016, it was offset by good performance in other countries, especially in sub-Saharan Africa.

On the continent Ghana ranks 10th out of 47 countries.

“Doing Business 2016: Measuring Regulatory Quality and Efficiency”, the 2016 edition of the report which measures regulations affecting 11 areas in business, exempted the area of labour market regulation and assessed ten areas: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

Ghana went up two places from 134th to 132nd in the area of dealing with construction permits, showed stagnation in trading across borders and exhibited a 2.875 average downward slip in rank over the other eight categories, ranging from as low as a -1 slip in rank for Enforcing Contracts and Resolving Insolvency, to a -6 slip in Getting Credit.

According to the report, it takes an average of eight procedures to register a firm in Ghana, and sub-Saharan Africa (where a procedure is defined as any interaction of the company founders with external parties such as government agencies, lawyers, auditors or notaries), in contrast with 4.7 procedures in high income member countries of the Organization for Economic Cooperation and Development (OECD).

Also, the median number of days to start a firm in Ghana, according to the report, is 14 and 26.8 in sub-Saharan Africa, against 9.6 in OECD countries.

However, the World Bank says sub-Saharan Africa is improving.

Of 231 positive reforms in business regulations implemented worldwide during the past year, sub-Saharan Africa alone accounted for about 30 per cent, with a total of 69 reforms made in 35 economies, according to the report released on Tuesday October 27.

The region also stood out in implementing reforms under the Getting Credit indicator. Of the 32 reforms made globally under the indicator, 14 were carried out in sub-Saharan Africa, with Kenya and Uganda making significant progress.

Of the top 10 improvers – countries that implemented at least three reforms and moved up on the global rankings scale, sub-Saharan Africa also boasts half of the ten countries: Costa Rica, Uganda, Kenya, Cyprus, Mauritania, Uzbekistan, Kazakhstan, Jamaica, Senegal and Benin.

However, the said sub-Saharan countries still rank poorly on the global scale: of the 189 countries, Kenya ranks 108th, Uganda is ranked 122nd, Senegal, 153rd, Benin, 158th; and Mauritania, 168th.

The report says, “use of the Internet to streamline business regulation remains largely confined to more developed economies” and the region will still need to continue implementing reforms in regulations to enhance the business climate.

The region remains the one with the smallest share of economies using electronic filing or payments, though the use of electronic tax filing and payment systems has increased substantially in several regions of the world since 2006, especially in Europe and Central Asia.

“In sub-Saharan Africa, very few economies use electronic platforms in business regulation. Of the nine possible regulatory transactions included in the analysis, Australia, Denmark and Estonia enable entrepreneurs to complete eight or more online. The Central African Republic, the Republic of Congo and Equatorial Guinea are among the few economies where none of these transactions exist,” it says.

Ghana is said to be among the countries that introduced or improved systems which allow electronic submission and processing of trade-related documents for imports and exports.

Singapore leads the pack in the ease of business ranking with a score of 87.34, followed by New Zealand with 86.79, Denmark in third with 84.40.

They are followed by the Republic of Korea, Hong Kong SAR, China and the UK, USA, Sweden, Norway and Finland.

By Emmanuel Odonkor

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