Doing Business Report – impressive but insufficient

The business environment in Rwanda has tremendously improved over the years, with the country being a top business reformer in the World Bank Doing Business Report 2010.

The business environment in Rwanda has tremendously improved over the years, with the country being a top business reformer in the World Bank Doing Business Report 2010.

The new World Bank survey report shows  that Rwanda has defied all odds  to record an impressive performance climbing to position 67 this year from 143 in last year.

This represents double digit growth, as a result of extensive reforms that were implemented.

The country scored highly in starting a business, employing workers, registering property, getting credit, protecting investors and closing a business. 

Doing Business ranks economies based on ten indicators of business regulation that record the time and cost to meet government requirements in starting and operating a business, trading across borders, paying taxes, and closing a business. A high ranking on the ease of doing business index means the regulatory environment is conducive to the operation of business.

Rwanda should be applauded on the recent policy reforms that have simplified doing business in the country.

But, while there is no doubt that the country has made tremendous progress in improving the business climate, more challenges remain.

This includes having the reforms implemented nationwide and the development of the private sector.

In addition to the above reforms, efforts should be directed towards improving other factors that contribute to a good business climate such as: incentives for innovation and investment both local and foreign investors and easy access to credit, as well as corporate governance.

Much as Government has done a lot for the private sector, this important engine of growth remains week. There must be collective efforts from both Government and the private sector to clear the existing gaps.

The private sector can best allocate capital, create jobs and innovate. And it is government’s role to create an environment in which they can succeed.

Developing Rwanda’s economy will take ongoing partnership between the private and public sectors, as well as a commitment to instituting fundamental economic reforms.

It is undisputed that the private sector has played role in helping the country achieve economic growth but if more investment is done to facilitate the development of the sector, more can be achieved.

Efforts must be geared towards elimination of non -tariff barriers like complex and time-consuming regulations.

While vigorous entrepreneurship can be seen in the informal sector all over the country, these constraints, as well as disincentives that  prevent small operators from thriving and expanding their businesses to become energetic - small and medium-sized enterprises.

Rwanda does not just need growth per-se, but specifically growth in labour-intensive sectors that leads to job creation and wage improvement.

This link is vital because the fastest exit from poverty is through employment and a good wage bill.

While achieving a double digit ranking is commendable, the country must focus on implementation of these reforms to achieve tangible progress
 
The author is a journalist, The New Times
ubernie@gmail.com

 

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