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HomeArticlesThe Un-Easyness of Doing Business in Kenya, Nigeria and South Africa

The Un-Easyness of Doing Business in Kenya, Nigeria and South Africa

The recently released World Bank Group’s Ease of Doing Business 2020 report indicates that Kenya and Nigeria continue to make improvements with Nigeria jumping 15 places in the latest ranking. South Africa however is trending in the opposite direction.

Significant reforms to ease paying taxes, dealing with construction permits, getting electricity, and starting a business, cross border trade all benefited from improvement. The most common reform focused on enhancing online platforms and empowering registries snd credit bureaus.

Kenya performs best in the subset achieving a top 10 world ranking in getting credit. The Sub-Saharan average now takes less time to start a new business and cheaper with statistics of 20 days and costs 33.5% of per capita income which is a massive improvement from 2003 when it took 62 days and 305% of per capita income

Most of these reforms addressed aspects of starting a business, dealing with construction permits, getting electricity, and paying taxes; the least reformed area was resolving insolvency. The most common reform features included advancing the functionality of credit bureaus and registries, developing or enhancing online platforms to comply with regulatory requirements, improving the reliability of power supply, reducing certain taxes, strengthening minority investor protections, streamlining property registration processes, and automating international trade logistics.

wdt_ID Economy Kenya South Africa Nigeria
1 GlobalRank 56 84 131
2 Rank within group 3 4 17
3 Starting a Business 25 26 18
4 Dealing with Construction Permits 15 12 4
5 Getting Electricity 3 10 33
6 Registering Property 24 12 48
7 Getting Credit 1 13 5
8 Protecting Minority Investors 1 2 4
9 Paying Taxes 14 5 29
10 Trading across Borders 12 24 40
Economy Kenya South Africa Nigeria

Altogether as an average Sub-Saharan economies gained 1 percent  in 2020

Kenya

With six reforms and consolidation on past efforts including launching an online system for social security contributions and  improving reliable electricity supply Kenya positions itself as third highest in the regional rankings and number one in the subset

South Africa

South Africa implemented a single reform this year and four in the past five years, evidently with this minimal effort South Africa will continue to fall downwards in the ranking.

Cape Town bucks the trend by being the top opportunity city in Africa. Cape Town is placed 6th among middle-income cities such as Beijing, Moscow, and Mexico City.

Nigeria

Nigeria is making progress in its goal to achieve a ranking below 70 by 2023.  As of 2020, Nigeria was named a top 10 improving economy. The key efforts focused on six indicators inclusive of making enforcements of contracts easier. Challenges still exist in resolving insolvency, registering property, and getting electricity

Jigawa, Kano and Katsina continue the lead in the EoDB ranking.  Jigawa in particular is benefiting from efforts established in 2016 by the Jigawa Investment Promotion Council (InvestJigawa)

 

Conclusion

Kenya and Nigeria continue to improve on the rankings while South Africa is going backward. In comparison to other world regions, Sub-Saharan Africa must improve getting electricity, cross border trade, and paying taxes. At present, it costs  400% in North Africa and the Middle East, 262% in Central Asia and Europe but 3,100% of per capita for electricity grid connectivity. The global annual average for tax payment is 23 times but 36 times per year for small and medium-sized business in Sub-Saharan Africa

On a positive note collectively 59 regulatory reforms were completed in 2018/2019 and, Sub-Saharan Africa enacted 107 legislative reforms constituting more than a third of global records.

 

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