Overview

2011/12 saw improvements to the business environment in all five economies making up the East African Community (EAC) — that is, Burundi, Kenya, Rwanda, Tanzania and Uganda. The EAC saw its 5 governments implement a total of 9 regulatory reforms last year to improve the business environment for local businesses and encourage entrepreneurship in the region. Continuous improvement of the business environment is important for economies seeking to benefit from increased trade and investment through regional integration.

Main Findings

• he past 8 years the 5 EAC economies implemented a total of 74 institutional or regulatory reforms improving the business environment for local entrepreneurs.
• Burundi was among the world’s most active economies in implementing regulatory reforms in 2011/12. It implemented policy changes in 4 areas measured by Doing Business: starting a business, dealing with construction permits, registering property and trading across borders.
• Rwanda made the greatest progress in improving its business environment between 2005 and 2012, followed by Burundi. Rwanda was also the second economy globally to advance in closing the gap to the frontier.
• Sharing good practices could bring East Africa closer to global top performers.
• New data show the importance of access to regulatory information. The rise in e-government initiatives in the region and around the world provides an opportunity to increase access to information and transparency.
• The EAC has achieved greater convergence in the complexity and cost of regulatory processes than in the strength of legal institutions relevant to business regulation. Of the 74 institutional or regulatory reforms implemented by EAC economies in the past 8 years, the largest numbers were in the areas of starting a business (11), registering property (9) and dealing with construction permits (8).

Examples

• Worldwide, 108 economies implemented 201 reforms making it easier to do business in 2011/12. In the EAC, all 5 economies implemented a combined 9 regulatory reforms in 2011/12 making it easier to do business — 4 were carried out in Burundi, 2 in Rwanda and 1 in each of Kenya, Tanzania and Uganda.
• Burundi jumped 10 places in the ranking in the ease of doing business in 2011/12 thanks to improvements in 4 areas as measured by Doing Business 2013: starting a business, dealing with construction permits, registering property and trading across borders.
• Rwanda, the top performer in the region, made the most progress over the past seven years. Worldwide, it made the second-most progress. Over that period, Rwanda implemented 23 regulatory reforms, making it easier to do business. The economy, among others, has undertaken ambitious land and judicial reforms, introduced new corporate, insolvency, civil procedure, and secured transactions laws.
• Regulatory reforms — such as the consolidation of different registration processes into 1 single point in Rwanda and Kenya — simplified the registration process in the EAC region. To start a business in the EAC now requires an average of 8 procedures and costs an average of 33.6% of income per capita — compared to 12 procedures and a cost of 140% of income per capita 7 years ago, in 2005.