Financial & Private Sector Development …… ……. Arusha, Tanzania August 17, 2011 Doing Business in The East African Community 2011

Financial & Private Sector Development Doing Business – Overview Launched 8 years ago. Goal: to provide an objective basis for understanding and improving the regulatory environment for business. Doing Business 2011 covers 11 areas of business regulation in 183 countries. The objective: efficient regulations, accessible to all, and simple in their implementation.

Financial & Private Sector Development What does Doing Business measure? Doing Business indicators: Focus on regulations relevant to the life cycle of a small to medium-sized domestic business. Are built on standardized case scenarios. Are measured for the most populous city in each country. Are focused on the formal sector. DO NOT measure all aspects of the business environment such as macroeconomic stability, corruption, level of labor skills, proximity to markets, regulation specific to foreign investment or financial markets.

Financial & Private Sector Development 4 Property rights Investor protection Access to credit EntryAdministrative burden Flexibility in hiring Recovery rate Reallocation of assets Doing Business indicators – 11 areas of business regulation (9 included in the ranking)

Financial & Private Sector Development 5 1. Singapore16. Korea, Rep. 2. Hong Kong SAR, China17. Estonia 3. New Zealand18. Japan 4. United Kingdom19. Thailand 5. United States20. Mauritius 6. Denmark21. Malaysia 7. Canada22. Germany 8. Norway23. Lithuania 9. Ireland24. Latvia 10. Australia25. Belgium 11. Saudi Arabia26. France 12. Georgia27. Switzerland 13. Finland28. Bahrain 14. Sweden29. Israel 15. Iceland30. Netherlands Top 30 on the ease of Doing Business 2011

Financial & Private Sector Development Last year in 2009/10, SSA was second fastest reforming region: 27 economies improved business regulations 6 49 reforms in 8 areas with Paying taxes and Trading across borders the most popular

Financial & Private Sector Development Average ranking on the ease of doing business (1-183) Where do the EAC economies rank on business- friendly regulations in 2011? On average EAC ranks higher than:  Sub-Saharan Africa  COMESA  OHADA Burundi Kenya Rwanda Tanzania Uganda

Financial & Private Sector Development Average ranking of the EAC economies comparing to SSA average in 2011 The EAC economies on average rank better than the Sub Saharan African average in 8 out of 10 indicators.

Financial & Private Sector Development East African Community and selected Sub-Saharan Africa countries - overall performance on Doing Business 2011

Financial & Private Sector Development Rwanda leads on reform pace (DB change score) over past 5 years 10 Rwanda is the front runner in the region. Mauritius reformed its regulations at a steady pace from DB07. Zambia made progress recently and is among the DB11 top reforming economies. Tanzania improved its business regulatory environment in DB07. 5-year measure of cumulative change Ghana made considerable progress with 5 reforms recorded in DB08.

Financial & Private Sector Development The EAC reformers in 2009/10 11 Uganda 2 Reforms 2009/10 Rwanda 3 Reforms 2009/10 Kenya 2 Reforms 2009/10 Burundi 1 Reform 2009/10 Dealing with construction Getting Credit Trading across borders Enforcing contracts Starting a business Paying Tax

Financial & Private Sector Development EAC countriesDB 2011 rankDB 2010 rankChange in DB rank Rwanda5870Improved 12 places Kenya9894Dropped 4 places Uganda122129Improved 7 places Tanzania128125Dropped 3 places Burundi181 No change Change in EAC economies’ rank according to Doing Business 2011 Analysis of a five-year DB change score in Doing Business indicators between BD2006 and DB2011 shows positive scores for all EAC economies. EAC economy DB Change Score from DB06 to DB11 Rwanda0.4 Uganda0.08 Tanzania0.07 Burundi0.03 Kenya0.02 The DB change score illustrates the level of change in the regulatory environment for local entrepreneurs as measured by DB indicators. The DB change score ranges from -0.1 to 0.54

Financial & Private Sector Development 54 Reforms among countries in the East African Community since Doing Business 2005

Financial & Private Sector Development Topic East African Community best practice according DB 2011 Starting a businessRwanda (9) Dealing with construction permits Kenya (35) Registering propertyRwanda (41) Getting creditKenya (6) Protecting investorsRwanda (28) Paying taxesRwanda(43) Trading across borders Tanzania (109) Enforcing contractsTanzania (32) Closing a businessUganda (56) 14 The EAC business environment can be comparable to that in Japan If each East African country were to adopt the region’s best practice for each Doing Business indicator, East Africa would rank 18 th instead of 117 th bringing the community closer to the global top performers such as Japan.

Financial & Private Sector Development For more information visit: Screenshot with EAC 2011 report