Tuesday, May 21, 2024
BusinessEthiopia slides in Doing Business report

Ethiopia slides in Doing Business report

Ethiopia is currently in worse shape compared to the previous year, according to this year’s World Bank Doing Business Report— sliding from 159 to 161 in overall ranking, out of a total of 190 economies.

The report released last week came up with mixed results when it comes to a number of parameters listed under the doing business index.

The report, among other things, evaluates and measures economies in terms of starting business, availability of credit and electricity, paying taxes, cross-border trading and protecting minority investors.

In this respect, when it comes to ease of starting business, Ethiopia is ranked 174th, improving by five levels from last year’s. This measure includes minimum capital requirements, time, cost and number of procedures required to establish a small to medium sized company. 

On the contrary, things like paying taxes showed a significant decline. Last year, Ethiopia was ranked 90th in terms of paying taxes though this year it ranked 133rd. This particular parameter basically measures and records taxes and mandatory contributions which a medium-size company is expected to pay or withhold in a given year. It also measures administrative burden in paying taxes and contributions.

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Yet on parameters like cross-border trading the country’s ranking remained unchanged at 167 when compared to last year’s.

The report shows that Ethiopia is among the best performers in the sub-Saharan region on enforcing contracts, which looks into cost and time of resolving commercial disputes and quality of judicial process. On this index, Ethiopia comes at 68th, bettering off its neighbors Rwanda and Kenya, which stand at 85th and 90, respectively.

In the area of dealing with construction permits, Ethiopia ranks 169th worldwide, making only one level improvement over last year’s.

With regard to the indicator on registering property, Ethiopia ranks139th, sliding by six levels.

At the regional level, Rwanda comes at the top of the Doing Business ranking, attaining 41th place at a global rank. In addition, Kenya stands at the 80th mark.

Rwanda not only led sub-Saharan Africa but also managed to come ahead of countries like China, Brazil and South Africa.

The report also indicated that 3,188 business reforms have been made since the inception of Doing Business 15 years ago.

Developing countries carried out 206 reforms, accounting for 78 percent of the total reforms, with Sub-Saharan Africa implementing 83 reforms, a record for a second consecutive year for the region, and South Asia implementing a record 20 reforms. A large number of reforms centered on improving access to credit and registering a new business, with 38 reforms each, as well as facilitating cross-border trade, with 33 reforms,” reads the report.

In this respect, Rwanda has implemented the highest number of business reforms, with a total of 52 reforms.



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