South Africa 28th in the world for ease of doing business

(2005-09-19)

A report just released by the World Bank ranks South Africa at 28th in the world for ease of doing business, out of 155 countries surveyed. Doing Business in 2006: Creating Jobs, cosponsored by the World Bank and the International Finance Corporation, points out that countries that make life easier for entrepreneurs to start and run businesses create more jobs.

The report, now in its third year, was based on the efforts of more than 3,500 local experts in the 155 countries. This is the first time that it has included rankings of all the countries. The rankings are based on a set of ten business environment indicators, namely starting a business, hiring and firing workers, enforcing contracts, registering property, getting credit, protecting investors, closing a business, dealing with business licenses, trading across borders, and paying taxes.

The country at the top of the list was New Zealand, followed by mostly developed nations including (in order) Singapore, the USA, Canada, Norway, Australia, Hong Kong, Denmark, the UK and Japan. The authors of the report point out that all of the top countries regulate business, but they do so in less costly and burdensome ways than those lower in the rankings.

South Africa ranked significantly higher than a number of European and other developed countries, such as Spain (30), Austria (32), France (44), Italy (70) and Greece (80). Importantly, the country also ranked higher than many of our main trade competitors, including Taiwan (35), Portugal (42), Pakistan (60), Mexico (73), China (91), Indonesia (115), India (116) and Brazil (119).

The highest ranked African country was Mauritius (23). Namibia came in at 33rd and Botswana at 40th. Most other African countries, like most poor countries in the survey, ranked relatively low. The report found that poor countries levy the highest business taxes in the world, which is actually counter productive in the long run. The Democratic Republic of Congo was ranked 155th out of the 155 countries surveyed.

The report’s authors found that since the survey was started it has helped to motivate more than 20 countries to institute reforms. Amongst the top reformers were Rwanda, Egypt, Mauritius and South Africa. South Africa has reduced taxes for small companies, provided business incentives for SMEs and ensured that it now takes only one day to register a Close Corporation.