We're sinking!
South Africa's position drops in global ease of doing business rankings.
Felicity Duncan 27 Set 2007If the World Bank is right, South Africa has been steadily slipping behind in the ease of doing business ranks.
Every year, the World Bank publishes the Doing Business Report, which looks at the regulations various countries impose on businesses that make doing business more difficult. In 2006, South Africa ranked 28th in the world, a respectable showing. We slipped to 29th in 2007, and in the latest rankings, for 2008, we are down to 35.
While South Africa has not necessarily been moving backwards in terms of the ease of doing business in our country, other countries have been reforming rapidly as globalisation becomes an ever-more present reality.
The table bellows summarises the information contained in the 2008 report. It compares South Africa with the global best and worst, and the SADC best on all the categories the report considers.
Some points are worth highlighting. South Africa does well in the investor protection stakes, and has relatively reasonable cost structures overall. But there are several areas in which we perform poorly.
Note the relatively long time it takes to start a business in South Africa, especially when compared to our SADC cousin Madagascar. South Africa's employment rigidity index is also high relative to our neighbors in Swaziland. Finally, our corporate tax rate is relatively high.
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| World Best | World Worst | South Africa | SADC Best |
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| Starting a business |
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| Number of procedures | 2 (Australia) | 20 (Equatorial Guinea) | 8 | 5 (Madagascar) |
| Time (days) | 2 (Australia) | 694 (Suriname) | 31 | 7 (Madagascar) |
| Cost (% of per capita income | 0 (Denmark) | 1075.2 (Sierra Leone) | 7.1 | 5.3 (Mauritius) |
| Paid in minimum capital (% of per capita income) | 0 (Various) | 3673 (Syria) | 0 | 0 (Various) |
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| Dealing with licenses (using construction as an example) |
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| Number of procedures | 6 (Denmark) | 54 (Russia) | 17 | 12 (Namibia) |
| Time to deal with licenses (days) | 34 (Korea) | 1179 (Haiti) | 174 | 93 (Swaziland) |
| Cost (% of per capita income) | 1.5 (United Arab Emirates) | 61049 (Liberia) | 30.4 | 30.4 (South Africa) |
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| Employing workers |
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| Rigidity of employment index | 0 (Hong Kong) | 79 (Venezuela) | 42 | 17 (Swaziland) |
| Firing costs (weeks of salary) | 0 (Various) | Not possible (Venezeula) | 24 | 446 (Zimbabwe) |
| Non-wage costs (% of salary) | 0 (Various) | 55 (Belgium) | 3.8 | 0 (Botswana) |
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| Registering property |
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| Procedures | 1 (Norway) | 14 (Nigeria) | 6 | 4 (Botswana) |
| Time (days) | 2 (New Zealand) | 513 (Kiribati) | 24 | 23 (Namibia) |
| Cost (% of property value) | 0 (Saudi Arabia) | 28.1 (Syria) | 8.8 | 3.3 (Malawi) |
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| Getting credit |
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| Borrowers covered by credit bureax (% of adults) | 100 (Various) | 0.02 (Guinea) | 52.1 | 59.9 (Namibia) |
| Strength of legal rights index | 10 (Hong Kong, China) | 0 (Cambodia) | 5 | 7 (Botswana) |
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| Protecting investors |
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| Strength of investor protection index | 9.7 (New Zealand) | 0 (Afghanistan) | 8 | 8 (South Africa) |
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| Paying taxes |
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| Payments (number per year) | 1 (Maldives) | 124 (Belarus) | 11 | 7 (Mauritius) |
| Time to administer (hours per year) | 0 (Maldives) | 2600 (Brazil) | 350 | 76 (Seychelles) |
| Total tax rate (% of profit) | 8.4 (Vanuatu) | 286 (Gambia) | 37 | 16 (Zambia) |
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| Trading across borders |
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| Documents to export | 3 (Various) | 13 (Fiji) | 8 | 4 (Madagascar) |
| Documents to import | 3 (Various) | 18 (Central African Republic) | 9 | 5 (Seychelles) |
| Time to export (days) | 5 (Denmark) | 102 (Iraq) | 30 | 17 (Mauritius) |
| Time to import (days) | 3 (Singapore) | 104 (Uzbekistan) | 35 | 16 (Mauritius) |
| Cost to export (per container $) | 390 (China) | 4867 (Chad) | 1087 | 728 (Mauritius) |
| Cost to import (per container $) | 367 (Singapore) | 5520 (Chad) | 1195 | 673 (Mauritius) |
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| Enforcing contacts |
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| Procedures | 20 (Ireland) | 58 (Brunei) | 30 | 29 (Botswana) |
| Time (days) | 120 (Singapore) | 1800 (Timor-Leste) | 600 | 270 (Nambia) |
| Cost (% of claim) | 0.1 (Bhutan) | 163.2 (Timor-Leste) | 33.2 | 14.3 (Tanzania) |
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| Closing a business (bankrupcy law) |
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| Time to go through insolvency (years) | 0.4 (Ireland) | 10 (India) | 2 | 1.5 Namibia |
| Cost (% of estate) | 1 (Colombia) | 76 (Central African Republic) | 18 | 8 (Lesotho) |
