A new study finds that a coalition of nations in west and central Africa has accelerated the pace of business reform, making it easier for entrepreneurs to operate there.
The report from the International Finance Corporation and the World Bank, “Doing Business in the OHADA Member States 2012”, draws on data from the annual global “Doing Business” study.
It provides a detailed look at business regulations and conditions faced by entrepreneurs in the 16 OHADA member nations: Benin, Burkina Faso, Cameroon, Central African Republic, Chad, the Comoros, Republic of Congo, Côte d’Ivoire, Equatorial Guinea, Gabon, Guinea, Guinea-Bissau, Mali, Niger, Senegal and Togo.
OHADA, the Organization for the Harmonization of Business Law in Africa, is a system of business laws and implementing institutions adopted by the 16 member nations, according to the World Bank.
In the past six years, the World Bank said in a press release, all 16 improved their local business environment. Across the region, the average cost of starting a business decreased from 338% to 110% of average per capita income. The typical time required to register property decreased by 28%, the World Bank said.
One of OHADA’s priorities is to create a single legal framework to govern business activities in the region’s economies. A revision of the body of commercial laws in the region simplified business entry in eight member states and strengthened secured transaction laws in all 16 member states.
“The overhaul of the common business legislation addressed two of the top constraints to enterprise development and investment in Africa: access to finance and the quality of the legal framework,” Pierre Guislain, director of Investment Climate Advisory Services of the World Bank Group, said in a press release.
The average ranking of the OHADA members is 166 out of the 183 economies measured in the “Doing Business 2012” report. Mali led the group as the easiest place for an entrepreneur to do business with a global rank of 146. Burkina Faso was second most hospitable among the OHADA members with a rank of 150, and Senegal was third with a rank of 154.
The report points out bright spots in the region – aspects of the business climate that rival world leaders. Senegal was on par with Canada in terms of time needed to set up a business (five days thanks to the nation’s “one-stop shop” system). Burkina Faso shaved the time needed to secure construction permits to 98 days – three months faster than the EU average, according to the World Bank.