In October last year, after the launch of the 2018 World Bank Doing Business Report, the government announced that they would be introducing about 15 reforms in various sectors. Last week, a number of reforms were rolled out, and they include indicators like getting electricity, getting a construction permit, reducing time exporters spend at customs, among others. With the deadline to review of the World Bank Doing Business reforms looming (end of April), The New Times’ Collins Mwai, caught up with Louise Kanyonga the Head of Strategy and Competitiveness Department at Rwanda Development Board (RDB) who talked about the ongoing doing business reforms.
Below are excerpts;
With the deadline of the review of the World Bank Doing Business reforms looming, how many reforms have so far been completed?
The number of reforms went up because we ended up with about 25 reforms or so as time went by. Of those that we have been able to complete, there are about 16.
We think that we should be able to finish by the deadline which this year was brought forward to around end of April. We should have completed most of them in time.
Often, business reforms have been interpreted as a pursuit for ranking as opposed to improving business environment for investors’ sake. What would you respond to this?
It is important to understand why we take the reforms seriously and why we associate our reforms to the rankings. To be honest, the tool is a very good measure of what your business climate is like.
It’s not just rank and number; it’s the indicators that show the stuff that you are supposed to reform. It provides us a very good starting point on what we need to do. It is important that people understand that it is not just a ranking.
It is a tool that helps you improve your business environment.
There is also the benefit of bench marking; we would not be able to do much just by making adjustment when just looking at our local private sector. The report helps you understand how you compare to other economies.
It gives you a very good sense of where you are and on a good sense of who is doing well and we can share experience with.
It is an extremely good signal that your country is a good investment destination; these are some of the things that investors look out for when they decide to invest in your country.
It is one thing showcasing opportunities which we do and which is useful but when we have an institution like the World Bank saying that that this is the second easiest place to do business in Africa, it is useful in investment promotion.
We have a lot of engagement that we do with the private sector to understand the business environment. We have public-private dialogue; we have aftercare services, among others.
We keep having constant dialogue with investors to understand areas they would like improved and addressed.
We are also starting to move to the micro-levels, the firm level. There are different initiatives where we try to understand issues within firms and how we can better improve affairs for them.
For aftercare, we visit firms to try and understand what we can do with existing firms to understand what issues they face and what approaches could improve the environment.
There is really a lot of engagement that is ongoing beyond the reforms.
Speaking of engagement, is there a set feedback collection mechanism that enables you to know the reception of reforms and if they can be adjusted further for increased impact?
Reforms are an ongoing business, it has to be an ongoing process, the dialogue has to continue and we have to continue to understand whether the reforms are making lives easier.
We have not had cases where the reforms have made it more difficult to do business. What we have encountered is that, at times, people are not fully aware of the reforms; therefore they do not apply it and do not benefit.
Reforms are a continuous process which requires us to refine and improve further. In the past, and currently, we have been doing workshops. This has been to communicate for the business community to understand how the reforms will ease their business processes.
We have workshops with the various stakeholders and concerned parties on the various reforms to make sure that they understand how they are applied and how reforms are improving processes.
We hope to keep the conversation going beyond the reform cycle to ensure that there is more impact.
We have been considering setting up a specific feedback mechanism or platform such as an application that could help us collect feedback on reforms and the business environment.
Once in a while, there are instances where despite the reform in a given sector, not much changes and target beneficiaries keep using the older ways they were used to. Why is this?
There are several factors that could be behind this. It could be because some people are not aware of the reforms. Sometimes there are vested interest in continuing to use the old ways before the reforms.
For instance, a service provider could keep charging clients for something that no longer has a fee associated with it. There are multiple reasons but I think, overall, most of the reforms that we report to the World Bank are verified as implemented.
We have hardly had to interact with the World Bank to correct some of these reforms. The private sector practitioners are usually informed through the various outreach mechanisms.
This year, we are having increased communication efforts that go beyond the practitioners to the wider public to know what they are entitled to.
We are also engaging strongly with the World Bank to work hand in hand to ensure that they understand the various methodologies of the reforms and the thinking behind it.
At times, the reforms come at a cost to the government or cause the government to forego certain incomes such as fees. What is usually the cost benefit analysis in such scenarios?
For a business, efficiency in regards to time could mean saving or using up the money. It is extremely important for us to be as efficient as possible. A lot of time, it is not so much about the revenue but the efficiency.
For instance, when we waive fees such as business registration fees to ease starting a business, when we do the computation, we do not forego much when you look at aspects like the number of firms coming in which means growth of the economy.
Some of the reforms have massive impact (in aspects like growth of the economy, firm entry, employment generation) and only come at almost negligible costs.
Other times we are also saving a lot of money from such efficiency by also reducing the bureaucracy. We are usually reducing the procedures and saving up time by moving online.
Are there sectors that have had more priority during reforms?
If you look at the trends, every year, we do aim for reforms under every single indicator, including aspects where we are doing well. We aim to reform every single indicator.
If you look at where we are, 41st globally, we are in an extremely competitive space and the margin for error is getting smaller. That means countries are starting to realise how important it is to be ranked well and are starting to aggressively reform.
If everyone around us is reforming, we cannot remain complacent. In the areas where we are not doing very well, we do put a lot of emphasis. We try to understand the methodology and what is necessary to have much higher benefits for the private sector.
We have also been working closely with the World Bank advisory team in this regard to make sure that no areas lag behind.
Any planned reforms in the coming days?
Some reforms that are in the pipeline that we might not be able to do by the close of the cycle include electronic land titles, electronic land transfers, electronic auctioning and EBMs software replacing the gadget.
This year we are excited about the reforms in getting electricity.