Five SADC countries are ranked in this year’s Doing Business index. The index, released in May, is a ranking system created by the World Bank Group to indicate the regularity environment of businesses. A higher ranking, which is indicated by a lower numerical value, specifies stronger protection of property rights and vice versa.
For the past 15 years, the World Bank has annually been measuring the quality of worldwide business environments with its Doing Business ranking system. Over 190 economies have been scrutinised on criteria including electrification and ease of business creation, the tax burden and the protection of property rights.
Doing Business measures regulations of the labour market (which has not been included in this year’s ranking) and for 11 areas in the life cycle of a business. Ten of these areas have been included in this year’s ranking on the “ease of doing business”. They are:
- Starting a business
- Obtaining a building permit
- Connecting to electricity
- Transferring ownership
- Getting credits
- Protecting minority investors
- Payment of taxes
- Cross-border trading
- Enforcing contracts
- Resolving insolvency
The top 10 African economies, as ranked in the 2019 Doing Business report
#1 Mauritius:Mauritius is positioned in 20th place worldwide and in 1st place in Africa with a score of 79.58. The country is ranked 20 places higher this year, from its position in the 2018 Doing Business report.
#2 Rwanda:Rwanda emerged in the top 30 countries of the World Bank’s Doing Business report for the first time with a score of 77.88. Globally, Rwanda is 29th on the “ease of doing business” ranking, compared to the 41st position in last year’s report.
#3 Morocco:Morocco is ranked 60th in the world with a score of 71.02 points. Therefore, Morocco confirms its position as a leader in North Africa, ahead of Tunisia (80th), Egypt (120th), and Algeria (157th). On the African continent, Morocco maintained its 3rd position with a score of 71.02 out of 100.
#4 Kenya:Kenya came in 4th position among African countries in Doing Business report 2019 and 61st globally with a score of 70.31 points compared to the 2018 report when it was ranked 80th. Kenya has gained 53 positions over the last three years.
#5 Tunisia:Tunisia is now ranked at 80th position globally with a score of 66.11 points in Doing Business report 2019, rising 8 places from its spot at 88 in the 2018 report.
#6 South Africa: With a score of 66.03, the 2019 report ranks South Africa 82nd globally. South Africa has always been the most powerful country in Africa in terms of touristic attraction, as millions of tourists visit South Africa each year to enjoy its beauty.
#7 Botswana: While it was marked as the 71st country in the global World Bank’s 2017 report, Botswana lowered its status in the 2018 report. It is now ranked at 86th globally and 7th in Africa with a score of 65.40.
Economists explain that this drop was caused by the lack of interest to invest in the diamond industry. Investors assume that Botswana does not need international investment. The results show a noticeable decline in the rates of investment from 2015 to 2016 (25% to 30%).
The ranks occupied by Botswana under these various indicators are:
- Start-up (157th)
- Obtaining a building permit (31st)
- Connection to electricity (133rd)
- Registering property (80th)
- Access to credits (85th)
- Protection of minority investors (83rd)
- Payment of taxes (51st)
- Cross-border trade (55th)
- Execution of contracts (134th)
- Resolving of insolvency (81st)
Generally, Botswana’s mining sector attracts the majority of its foreign direct investment. However, investment in the service sector (insurance and banking) are expanding rapidly. Foreign Direct Investment (FDI) comes mainly from the Southern African Customs Union and the European Free Trade Association, as well as from Canada and Zimbabwe.
#8 Zambia:According to the 2019 Doing Business report, Zambia has dropped two places from the 85th position 2018 to the 87th position 2019 globally with a score of 65.08. Zambia is also among one of the world’s top 10 economies with the most notable improvements.
#9 Seychelles: Seychelles scored 62.41 in the 2019 Doing Business report, placing the country in the 96th position globally. By removing administrative barriers and offering a variety of economic incentives, the government has worked hard to create a strong environment for investment.
#10 Djibouti: With a score of 62.02, Djibouti is ranked in the 99th position worldwide and 10th in Africa. Government officials are making efforts to improve the foreign investment rates in the country, mainly in the tertiary and mining sectors. Djibouti has risen from the 154th position 2018 to the 99th position 2019.