Ghana given template for improved international business competitiveness

…What top ranked African countries have done right

Following the recent release of the World Bank’s Ease of Doing Business Report, IMANI Africa has pointed out that Ghana has been given the strategies it requires to climb into the top 100 positions on the log by 2020.

IMANI Africa is a highly respected policy think tank and it suggests that correct public policy as demonstrated by some other African countries that have climbed the rankings fastest can also propel Ghana up the rankings, thereby certifying it as a highly attractive destination for international trade and investment.

The report ranked Ghana in the 114th position, six places up from last year’s 120th position. Some economic players have attributed the gains largely to the implementation of Ghana National Single Window (GNSW) programme, an automated and integrated initiative introduced to link government agencies and private sector operators involved in international trade.

According to the report, countries in the Sub Saharan region set a new record for three consecutive years running, implementing a total of 107 reforms which subsequently improved the ease of doing business for domestic Small and Medium Enterprises (SME’s).

Some of the continent’s economies including Kenya, Togo, Rwanda and Ivory Coast have seen massive improvements in the 2018 global top improvers; Mauritius is Africa’s top ranked country, placing 20th in the world.

Mauritius regained the top spot in the region whiles Kenya moved 19 places up, from its previous 80th position to 61st. The achievements that propelled the improvements in their rankings, which reflect improvements in their competitiveness as trading partners and investment destinations, were as a result of some major economic reforms that led to the creations of more jobs, most especially start-ups which in turn opened their respective economies for business activities to flourish.

Speaking during stakeholder discussions aimed at finding the balance between trade facilitation and revenue mobilization in Accra, president of IMANI, Mr. Franklin Cudjoe mentioned the current administration has inherited some major growth enhancing projects making it possible for the target to be achieved.

“We must do more to be at least 100th position by 2020”. Government must redouble its efforts, it is doable”, he said.

According to him, this must be done by first doing away with some taxes, reducing some and reducing the size of government’s appetite in personnel and effectively implementing systems to tackle corruption.

Importantly, Ghana can obtain a template for improving its competitiveness as a trading partner and investment destination by identifying and replicating the reforms that have done the same for other African countries, especially those that in the highest positions on the world rankings.

The stakeholder forum was held to finding suitable ways to maximizing government revenues. Key among the discussion focused on the recent implementation of the Cargo Tracking Note (CTN) policy and Paperless Port System.

These policies seek to remove all bottlenecks associated with the activities at the ports. However, imports undervaluation is still common, although the Ghana Revenue Authority (GRA) has declared its readiness to tackle the matter and bring the culprits to book.

What Mauritius, Kenya and Rwanda have done right                                                                                            

Mauritius implemented five major interventions aimed at strengthening and consolidating the economy for equal business opportunities to thrive. One of the major interventions was the enactment of Business Facilitation Act (BFA) on May 2017 as well as some budgetary measures.

The objective of the BFA was to “provide for amendments to the legislative framework that are necessary for the removal of constraints in relation to permits, licenses, authorizations and clearances to further facilitate the doing of business, and for related matters”.

The Act was aimed at giving a new drive to investments which sought to create a favorable atmosphere for doing business. It was also intended at encouraging a modern and digital business community by bringing significant amendments and innovation. Aside these, various administrative constraints were also addressed by the act.

Currently, it is estimated that the growth rate of Mauritius is around 3.9 percent while unemployment is expected to decrease to less than seven percent.

Kenya

One of the best ways to solve the problem of unemployment and spur faster economic growth is to start a business. Kenya has improved itself by adopting international best practices in business regulation in implementing major reforms to remove various bottlenecks associated with starting and registering businesses.

According to the World Bank, Kenya’s performance which has taken it to the 61st position out of 190 countries in the ranking was as a result of key reforms implemented to improve the growth of business climate for SMEs – a segment that is critical to the creation of more jobs and business opportunities in every economy.

World Bank Kenya Country Director, Felipe Jaramillo, has mentioned that in recent years, the country has embraced a strong reform agenda to boost investment and create jobs.

These major interventions earned Kenya a spot among the global top improvers, “a distinction it has earned four times in the past 11 years”. Kenya are the only economy in the region that has recorded improvement in the Ease of Doing Business Index for two years in a row.

Rwanda

Rwanda is the only Low-Income Country (LIC) to have entered the Top 30, out of the 190 countries ranked. The country moved 11 places up to the 29th position, from last year’s 41st position. This was as a result of a deliberate approach to reforming its business environment.

Out of the ten Doing Business indicators, Rwanda improved on almost all indicators. The country recorded the biggest gains by making electricity accessible and resolving insolvency which reflected a 20 percent increase in the absolute score.

In the categories of registering properties and quality credit information system procedures, Rwanda ranked second and third respectively.

In 2005 for instance, it took 354 days averagely to register property; in 2018 it takes an average of 7 days. Using the same comparing years, it costs the equivalent of 317% of annual per capita income to register a new business. However, it now costs less than 15%.

This portrays a favourable surge in the economy of Rwanda making the country one of the easiest places to do business in the world and thus a most attractive destination for international trade and investment.

Rwanda further improved its rank on ease of starting a business by replacing the electronic billing machine system with free software from the Rwanda Revenue Authority to allow taxpayers issue VAT invoices from any computer.

By Dundas Whigham