SA 35th for ease of business
28 September 2007
South Africa ranks 35th out of 178 countries in the World Bank and International Finance Corporation's Doing Business 2008 report, an annual survey that measures the time, cost and hassle for businesses to comply with legal and administrative requirements.
The rankings track indicators of the time and cost to meet government requirements in business start-up, operation, trade, taxation, and closure. Variables such as macroeconomic policy, quality of infrastructure, currency volatility and investor perceptions are not measured.
While South Africa dropped from 29th in the previous year's rankings, it remains higher than developed countries such as Portugal (37th) and Spain (38th) as well as major developing economies like Mexico (44th), China (83rd), Russia (106th), India (120th) and Brazil (122nd).
South Africa also ranks ninth globally for its protection of investors, while it recorded significant improvements in the areas of starting a business and getting credit.
According to Doing Business 2008, South Africa carried out two reforms over the survey period, abolishing the regional services and regional establishment levies, and passing the National Credit Act, which requires lenders to check overall debt levels before granting loans and guarantees borrowers the right to access and challenge their credit records.
South Africa is the second-highest ranked country in Africa after Mauritius (27th) in the survey.
Within sub-Saharan, South Africa ranks in the top 10 in all but four of 10 categories. It ranks first for protecting investors (9th globally), second for getting credit (26th globally), third for starting a business (53rd globally), sixth for dealing with licences (45th globally), seventh for closing a business (68th globally) and eighth for registering property (76th globally).
African reformers
According to the report, the year's most improved economy -
or "top reformer" - was Egypt, which rose to 126th globally as a result of remarkable improvements in starting a business, trading across borders, registering property, getting credit and protecting investors.
Ghana and Kenya also both rank among the top 10 reformers worldwide for the year, while Burkina Faso and Mozambique continued to climb the rankings.
The report finds that higher rankings for ease of doing business are associated with higher percentages of women among a country's entrepreneurs and employees.
"The benefits of regulatory reform are especially large for women," report author Sylvia Solf said in a statement. "Women often face regulations that may be designed to protect them but that instead force them into the informal sector. These women have little job security and few social benefits."
The report points out that in the Democratic Republic of Congo, women require the consent of their husbands to start a business, and presently run only 18% of small businesses. By contrast, in neighbouring Rwanda, which has no such regulations, women run more than 41% of the country's small businesses.
Top economies
Singapore retains its position as the overall top-ranked economy, with New Zealand, the US, Hong Kong and Denmark completing the top five.
Egypt, Croatia, Ghana, the former Yugoslavian Republic of Macedonia, Georgia, Colombia, Saudi Arabia, Kenya, China and Bulgaria make up the top 10 for improved performance.
Another 11 countries, including three in Africa - Armenia, Bhutan, Burkina Faso, the Czech Republic, Guatemala, Honduras, Mauritius, Mozambique, Portugal, Tunisia, and Uzbekistan - had three or more reforms during the survey period.
SAinfo reporter
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