Only two African economies rank in the top 50 on the ease of doing business, according to a report released by the World Bank. Mauritius ranks 13th, ahead of countries like Australia, Germany, Canada or China, while Rwanda ranks 38th, ahead of the Netherlands, Belgium or Hungary. 

Top Ten African Countries

In terms of performance, about ten African countries are ranked in the first 100 in the world. 

The Doing Business 2020 report also notes that effectiveness of trading across borders also varies significantly from economy to economy. 

Economies that predominantly trade through seaports incur average export border compliance costs as high as $2,223 per shipment in the Democratic Republic of Congo and $1,633 in Gabon compared to only $354 in Benin and $303 in Mauritius, the report notes.

More than half of the economies in the top-20 cohort are from the OECD high-income group; however, the top-20 list also includes four economies from East Asia and the Pacific, two from Europe and Central Asia, as well as one from the Middle East and North Africa and one from Sub-Saharan Africa. Conversely, most economies (12) in the bottom 20 are from the Sub-Saharan Africa region.

Economies that score highest on the ease of doing business share several common features, including the widespread use of electronic systems. All of the 20 top-ranking economies have online business incorporation processes, have electronic tax filing platforms, and allow online procedures related to property transfers.

The Doing Business 2020 data also suggest that a considerable disparity persists between low- and high-income economies on the ease of starting a business. An entrepreneur in a low-income economy typically spends about 50.0% of income per capita to launch a company, compared to just 4.2% for an entrepreneur in a high-income economy

Togo and Nigeria Ranked The Top Ten Improvers In The World

The Doing Business report also acknowledges the 10 economies that improved the most on the ease of doing business after implementing regulatory reforms. 

 In Doing Business 2020, the 10 top improvers are Saudi Arabia, Jordan, Togo, Bahrain, Tajikistan, Pakistan, Kuwait, China, India, and Nigeria (table O.2). These economies implemented a total of 59 regulatory reforms in 2018/19 — accounting for one-fifth of all the reforms recorded worldwide. Their efforts focused primarily on the areas of starting a business, dealing with construction permits, and trading across borders.

The motivation for reform in Nigeria, Tajikistan, and Togo was in part the developmental achievements of their neighbors. Rwanda’s progress over the past 10 years inspired authorities in Togo, leading several Togolese delegations to visit Kigali to learn about successful reforms. Togo’s president set a goal to be number one in West Africa in Doing Business 2020. To achieve this target, Togo made significant reform efforts in the areas of starting a business, registering property, and getting credit…

Nigeria has embarked on a comprehensive reform journey following the example of Kenya, the report notes. 

Sub-Saharan Africa Remains The Weakest On The Ease Of Doing Business Index

The report notes that sub-Saharan Africa remains one of the weak-performing regions on the ease of doing business with an average score of 51.8, well below the OECD high-income economy average of 78.4 and the global average of 63.0. Compared to the previous year, Sub-Saharan African economies raised their average ease of doing business score by just 1 percentage point in Doing Business 2020, whereas economies in the Middle East and North Africa region raised their average score by 1.9.

Read also: African Development Bank Invests In A New £50 Million SME Fund For Francophone West Africa

The Worst Country In Africa To Do Business In

Somalia ranks the worst country in the world as well as in Africa to do business in, followed by Eritrea, Libya, South Sudan, Central African Republic, Congo Democratic Republic (DRC), Chad, others. 

Global Performance

Worldwide, 115 economies made it easier to do business, according to the report. New Zealand however remains the number one country in the world in terms of ease of doing business, followed by Singapore, Hong Kong, Denmark, Korea Republic, United States, Georgia, United Kingdom, Norway and Sweden. 

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world