LAW, JUSTICE AND DEVELOPMENT WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT November 14-17, 2011 Washington DC LJD LAW JUSTICE and DEVELOPMENT

The World Bank’s support to OHADA Gilberto de Barros, World Bank November 16, 2011 Washington D.C. 2LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT

The New World Bank Strategy for Africa (03/2011) Two pillars (i) competitiveness and employment and (ii) vulnerability and resilience underpinned by a transversal theme or foundation: Governance and public sector capacity. While the implementation will use the Bank’s traditional instruments (partnership, knowledge and finance), greater emphasis will be put on the first two. Competitiveness and employment will emphasize the improvement of the investment climate, particularly with regard to three key constraints: (i) infrastructure; (ii) business climate and (iii) Skills development for increased productivity. LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT3

The investment climate  Private firms of all types are key actors in growth and poverty reduction – Create more than 90 percent of jobs. – Provide most of the goods and services consumed in society. – Pay most of the taxes needed for public funding of health, education, and other services.  Size of contribution depends largely on how governments shape the investment climate – The opportunities and incentives for firms to invest productively, create jobs, and expand LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT4

5 The investment climate (2)

6 The investment climate (3)

Driving growth 7 l Main sources of long-term growth are investment and productivity improvements - A good investment climate drives both, while protecting other social interests. l China, India & Uganda illustrate power: Private investment as % of GDP Growth experiences China – Ave. nearly 10% p.a. India – Doubled rate since 1970s. Uganda – 8 times ave. rate in sub- Saharan Africa.

 Prioritized in several national development strategies.  Need to improve is reflected in the ranking of OHADA countries in the 2011 Doing Business. LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT8 Improving the Investment Climate is a key priority in OHADA Member Countries

Doing Business Ranking as of November 2011 LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT9 CountriesRanking Mali146 Burkina Faso150 Senegal154 Gabon156 Senegal157 Cameroon155 Equatorial Guinea161 Togo162 Source: Out of 183 countries

Doing Business Ranking as of November 2011 LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT10 CountriesRanking Cote d'Ivoire167 Niger173 Benin175 Guinea Bissau178 Guinea179 Congo181 CAR182 Chad183 Source: * Out of 183 countries

IFC Technical Assistance Program 11 Launched in 2008, the IFC TA program is a partnership with the World Bank (AFR, LEG), France and ICF to help OHADA modernize the OHADA Laws in force and the Registry. Phase 1 – Diagnostic: 8 OHADA Laws are thoroughly reviewed by independent experts who propose general recommendations for their improvement. A diagnostic of the OHADA Registry (RCCM for Company and Collaterals) was conducted jointly with France, paving the way for its modernization. Phase 2 – Amendment Drafting & Presentation: OHADA Secretariat commissions a group of experts to draft amendments for each of the Laws based on the Phase 1 Diagnostic. The OHADA Secretariat presents a new draft Law to stakeholders in the region and ask the National OHADA Commissions to officially examine them. Draft laws are finalized based on discussions/comments. After securing legal opinion from the CCJA, OHADA Secretariat submits a proposed Law to the Council of Ministers for adoption.

OHADA Business Law Reform Program 12 December Major breakthrough: OHADA Council of Ministers adopted: Revised OHADA General Commercial Law (AU-DCG) Revised Secured Transactions Law (AU-DS) Improvements include:  Modernization of secured transactions regime and computerization of registries for collateral expected to greatly facilitate access to credit for the local private sector in OHADA zone  Streamlined formalities for business registration and operation  New “entrepreunant” status for micro and small businesses aim to encourage informal entrepreneurs country to join the formal economy

OHADA : Current Work Program 13 Ongoing and Future Developments Reform process continues, with the amended Company Act to be adopted in July 2012 and the Insolvency Act in December 2012 (TBC). A new IFC project is being prepared to support member countries in implementing revised laws at national level, to maximize impact of reforms.

Project Development Objective Strengthen OHADA regional institutions Improvement of aspects of the investment climate within OHADA member countries. LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT14

Key Expected Project Outcomes Improved investment climate within OHADA. A.OHADA effectiveness, as measured by the Permanent Secretariat’s ISO 9001 quality management certification. B.Increased number of commercial disputes resolved through alternative dispute mechanisms. C.Increased number of registered companies within OHADA member countries. D.Accounting and auditing norms harmonized with international standards in the field. LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT15

Strengthen the capacity of 3 regional OHADA institutions 1.Permanent Secretariat 2.Joint Court of Justice & Arbitration, and 3.Regional Superior School for the Magistracy in Benin (ERSUMA) World Development Report 2011: Conflict, Security and Development, strengthening the capacity of institutions is critical to fostering development. LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT16

Strengthening the OHADA Permanent Secretary’s Capacity 1.Building capacity through training and technical assistance. 2.Establishing a modern MIS within OHADA. 3.Developing and implementing a communication strategy. 4.Supporting project implementation and ISO certification LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT17

Strengthening the capacity at CCJA & Alternative Dispute Resolution 1.Building capacity through technical assistance at the joint Court of Justice & Arbitration. 2.Reviewing the Uniform Act on Arbitration. 3.Developing capacity in alternative dispute resolution through training in ADR. 4.Establishing a modern MIS within the joint Court of Justice & Arbitration and Regional Superior School for Magistry in Benin. LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT18

Strengthening the capacity of the Regional Superior School for the Magistracy in Benin 1.Building capacity and technical assistance at the Superior School for Magistracy (review content of curriculum & courses). 2.Supporting the delivery of selected course & disseminating existing courses. 3.Establishing a modern MIS within the Superior School for Magistry. LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT19

Fostering Better Financial Reporting  Modernizing OHADA’s accounting standards and adopting the International Financial Reporting Standards (IFRS).  Supporting the Adoption the International Standards on Auditing, the IFAC Code of Ethics for Professional Accountants, and the International Standard on Quality Control (ISQC) 1.  Developing an accountancy professional qualification scheme in line with IFAC requirements LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT20

Modernizing business and movable property registry  Support to the development of national registries (RCCM) based on harmonized guidelines.  Support the establishment and/or functioning of One stop shop for business and movable property registration.  Support the interconnection of the commercial registries into a virtual regional registries. LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT21

Thank you! LJD WEEK 2011 INNOVATION AND EMPOWERMENT FOR DEVELOPMENT22