Last week Kampala hosted the fifth edition of the Ease of
Doing Business Initiative (EADBI), a peer-to-peer review by sub Saharan
countries on their progress in facilitating private sector led growth.
The initiative comes out of the World Bank’s annual Ease of
Doing Business report, which judges countries public policies and
implementation on the subject.
Uganda has lagged in the lower quartile of the 190 or so
countries polled coming in at rank 150 last year compared to 152 the previous
year.
"The Ease of Doing Business Index which was started in 2001 came after years of development aid history pointed to the fact that for economies to grow sustainably they have to be private sector driven....
But how to facilitate the private sector to drive the
economy was the question.
It is all very nice to build transport, energy and
communication networks; to improve literacy and health levels; it’s even nice
to engineer the breakup of state monopolies and liberalise the markets. This
are all necessary, even crucial for economic growth but even more critical is
to reduce the red tape that many governments have tied their businessmen up in.
And it makes sense.
According to the latest EDB report Uganda ranks 166 for
starting up business – it takes 15 procedures to register a business compared
to the sub-saharan average of about eight. IN addition it takes 32 days to
start a business compared to the sub-Saharan average of 27 days or the even
lower figure of nine days in the western economies.
Uganda does relatively well in enforcing contracts and
winding up insolvent companies.
It does not take an advanced science degree to recognise
that being 150 out of 189 economies in making life easy for our businessmen
means we have a lot of work to do.
But their countries around us who have excelled with some of
our most pressing issues. Across the border from us in Rwanda it takes eight
procedures and about six days to register a business.
Think about the savings in money and time this comes with,
allowing businessmen to do what they are supposed to do, not chasing and
buttering up public officials.
During the conference Rwanda also announced that it was
coming close to full registration of its lands and by the same time next year
they will have streamlined their processes to allow for online transfers of
property.
In Uganda where it takes 11 procedures and 43 days to
register property would do well to learn from Rwanda, which was the reason for
the conference – a sharing of challenges and experiences.
Uganda has made some significant steps in the last decade
and a half that the EDB index has been coming out but more has to be done.
Peer learning is a good an avenue for this as any.
"Regulating business is necessary even important but with changes in technology and the urgency of having an efficient business sector, we need to constantly re-evaluate whether our regulations are hampering or enabling business. Some regulations are obsolete while others just serve as opportunities for public servants to pad their nests...
Making things easy for business also comes from the
realisation that governments are not the major drivers of job or wealth
creation. It is the private sector. So government should really confine itself
to creating a conducive environment for business to thrive but not at the
expense of the general population.
If Uganda for instance can reduce the burdensome regulation
around business they may solve another issue.
Uganda has been recognised as one of the most
entrepreneurial countries in the world. The rate of opening businesses is here
in phenomenal unfortunately very few of these businesses grow to be giant
enterprises with a regional or even national presence.
Part of the reason for this is the high cost in time and money
it takes to move from informal to formal businesses. What this means is that
many of our businesses remain subsistence operations, serving only to sustain
its owners lifestyles, with no ambition beyond that.
The loss to the general economy in terms of lost jobs and
economic activity is obvious.
So yes, putting easing doing business top of our agenda makes not only economic but political sense as well...
