A World Bank Group report, Doing Business 2020 shows that Sub-Saharan Africa is trailing other regions in the ease of doing business. The report analyzes regulation that encourages efficiency and supports the freedom to do business.
Furthermore, the analysts looked into factors such as how easy it is to start a business, deal with construction permits, get electricity, register property, get credit, protecting minority investors, pay taxes, trade across borders, employ workers, and contract with the government.
The research demonstrates a causal relationship between economic freedom and gross domestic product (GDP) growth, where freedom regarding wages and prices, property rights, and licensing requirements leads to economic development.
However, the data suggests a considerable disparity between low- and high-income economies on the ease of starting a business. In this case, an entrepreneur in a low-income economy typically spends about 50.0% of income per capita to launch a company, compared to just 4.2% for an entrepreneur in a high-income economy.
Also Read: IMF predicts Sub Saharan Africa economy to grow at 3.2 % in 2019
Sub-Saharan Africa
SSA remains one of the weak-Performing regions on the ease of doing business with an average score of 51.8, well below the OECD high-income economy average of 78.4 and the global average of 63.0. Furthermore, compared to the previous year, Sub-Saharan African economies raised their average ease of doing business score by just 1 percentage point in Doing Business 2020
Mauritius is the only Sub-Saharan Africa country on the top 20 list ranking at number 13. However, Sub-Saharan Africa economies trail as most economies (12) in the bottom 20 are from the region.
Moreover, Nigeria was among the 10 economies that improved most on the ease of doing business after implementing regulatory reforms. For instance, Nigeria reduced electricity connection times.
The region has developed credit information sharing creating a key element in the infrastructure of credit markets promoting sound risk management and financial stability.
Additionally, the use of online systems for tax filing and payment resulted in efficiency gains in several economies in Sub-Saharan Africa in 2018 including Côte d’Ivoire, Kenya, Mauritius, and Togo.
