According to the 2018 ease of doing business report released by the world bank, Rwanda is now ranked 29 in the world out of 190 countries. This remarkable achievement means that Rwanda has a better business environment than several economic powerhouses including France, Spain, Netherlands, Japan and Switzerland. Rwanda is 2nd in the continent behind Mauritius. Rwanda improved its ranking from 41st last year to 29th this year.
The ease of doing business report
The ease of doing business report was pioneered by Simeon Djankov. Every year the world bank releases the report that measure the cost to companies of doing business in 190 countries. The report ranks countries after assessing several indicators such as analysis of costs, requirements and procedures private firms are subject to in all countries. Thus, it shows which countries and leaders are promoting business environment reforms. The report is an important knowledge source. Developing countries especially use the report as guideline in reforming their business environments.
How Rwanda achieved this position
Rwanda has improved its business regulatory environment and will very soon catch up with the global best regulatory practices. This outstanding feat was achieved through the various reforms implemented by the visionary leadership of President Paul Kagame. Firstly, the country implemented the highest number of reforms globally in 2017/2018 at seven. Secondly, the country has significantly improved its land dispute resolution mechanism. Consequently, the country ranks second globally for property registration.
Thirdly, the country’s reforms in access to credit placed it among the top ten worldwide when it comes to access to credit. Finally, the country introduced electronic online business registration. As a result, starting a business in the country is relatively easy. Similarly, the cost of starting a business has greatly reduced from 317 percent of GDP per capita in 2005 to below 15 percent in 2018.
President Kagame’s vision
President Kagame’s vision is to transform Rwanda into middle-income status by 2035 and high-income status by 2050. Since the 1994 genocide, Rwanda has achieved one of the fastest economic growth in the world at 7 percent per annum. As a result, several improvements have been observed in the country.
For instance, life expectancy increased from 31 to 69 years and less than 40 percent of the population are below the poverty line. Additionally, several social indicators especially the health sector has drastically improved. With hard work and improved strategies it is possible for the country to fast-tract the developmental goals and bring the dates forward.
Sub-Saharan African countries on the move
For the third consecutive year, sub-Saharan countries implemented the most reforms globally. In the past year the region implemented 107 reforms to improve the ease of doing business especially for small and medium enterprises. Malawi, Zambia, Nigeria and Djibouti were among the top ten list of countries with the most improvements across three or more indicators.
The region has done extremely well in improving the ease of doing business in the past three years. However, there are still significant regulatory challenges to overcome. Policy makers in African countries should continue implementing more reforms in order to place the region among the top globally in ease of doing business. Rwanda is proof that with the right leadership, African countries could be among the best globally in ease of doing business. Once this is achieved, millions of Africans will be lifted out of poverty.