These days I’m teaching a course on Managing Corporate Growth in IESE’s Executive MBA (EMBA) program. One of the issues we’ve discussed is international expansion. We touched upon the difficulties of getting data in the African context. We discussed the shortcomings of official statistics — if you follow this blog regularly, you may know that I’m a bit skeptical about official data. However, and despite my skepticism, official statistics are a starting point. And so is the Doing Business report that the World Bank releases regularly. The 2017 edition was published recently. It contains information about reforms during 2016 that make doing business in a country easier – or more difficult!
In my post of last week titled “Partnerships for growth”, I reported the countries in sub-Saharan Africa (SSA) that are growing at higher rates: Ethiopia, Ivory Coast, Senegal, and Kenya. I wondered how they are doing in terms of the Ease of Doing Business ranking. Obviously, if this has an impact on growth, it will be down the road. But still, I think it’s interesting to have a look as it may affect future business:
Some reference points:
- New Zealand occupies the first position, and Somalia the last one out of 190 countries.
- United States ranks 8th, and Spain 32nd.
- Mauritius (ranked 49th) occupies the first position among SSA countries, and Somalia (ranked 190th) the last one.
What has improved in Kenya and Senegal? These are the highlights:
- It’s easier to get electricity: a geographic information system has been introduced which has eliminated the need to conduct a site visit to get approval.
- The insolvency framework has been updated. Part of this reform is that the requirements for qualifications of insolvency administrators are stricter now.
- It’s easier to register property: the requirements to complete a property transaction are available online now, and the cadastral map has been updated.
- Banks can consult now a new credit bureau to assess the creditworthiness of consumer and commercial borrowers.
- The maximum corporate income tax collectable has been reduced.
What’s your personal experience about how easy or difficult it is to do business in any of these countries? This is important to put official statistics in the right perspective!