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South Africa slips to 84 in Doing Business Ranking

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25 October 2019 – South Africa’s position in the World Bank’s latest ‘Ease of Doing Business Ranking’ has deteriorated, dropping to 84 out of the 190 countries surveyed, from 82 in the previous report.

New Zealand once again topped the ranking, followed by Singapore and Denmark, while Somalia, Eritrea and Venezuela propped up the table. South Africa is ranked only one spot above Zambia and above Botswana (87), but below Mongolia (81), Albania (82) and Kuwait (83).

Mauritius, at 13, is the highest-ranked sub-Saharan African economy and the only economy in the region in the top 20. Rwanda (38) is the only other sub-Saharan African economy in the top 50, with Kenya next at 54.

South Africa’s fall comes despite government’s stated commitment to reforms that will improve policy certainty and reduce red tape, as well as President Cyril Ramaphosa’s target of materially improving South Africa’s ranking in the yearly Doing Business report.

In his February State of the Nation address, Ramaphosa announced that his administration had set itself a target of being among the top 50 global performers within the next three years.

By contrast, Nigeria, which made six reforms during the year under review, was listed in ‘Doing Business 2020’ as among the top ten “global improvers”, alongside Saudi Arabia, Jordan, Togo, Bahrain, Tajikistan, Pakistan, Kuwait, China and India.

South Africa made only one reform during the period, which the World Bank listed as the introduction of a specialised court dedicated to hearing commercial cases, which should make it is easier to enforce contracts.

Nigeria, the report notes, made the process of trading across borders easier by reducing the time to export and import by further upgrading its electronic system and by launching e-payment of fees. Nevertheless, the country’s ranking remained a lowly 131.

Overall, the economies of sub-Saharan Africa enacted 73 reforms in the 12 months to May 1, down from a record high of 108. The regional average ease of doing business score was 51.8 on a scale of 0 to 100, below the global average of 63.

The region underperforms in the areas of getting electricity (146), trading across borders (140) and registering property (129). For example, the cost to obtain a permanent electrical connection in sub-Saharan Africa is three times higher than the global average and 52 times higher than the Organisation for Economic Co-operation and Development (OECD) countries.

The report notes that it takes over 200 hours in Côte d’Ivoire and Cameroon to comply with export border procedures for maritime transport, compared with 13 hours in OECD high-income economies, while ports in sub-Saharan African are the least efficient of any region. Source (Engineering News)