The survey was launched in Kampala on Monday and will be launched today in Kigali. For the first time, it included Burundi and Rwanda, the new entrants to the EAC
The business environment in Rwanda has greatly improved in the recent past, making the country one of the fastest growing economies within the East African Community (EAC), according to a new report.
Major reforms in the country have been listed in areas including, effective fighting of corruption, creation of a ‘One- Stop-Centre’ for investors, centralization of the tax service, issuing works permits and enforcing contracts.
This has facilitated the country to be ranked highly in the recently released ‘Business Climate Index Survey’ for the year 2008.
The research which was carried out from July to September 2008, aims at tracking the progress on the status of Non-Tarrif Barriers (NTBs) in the region.
It also assesses the business climate and confidence in the region and also documents the expectations of the business community regarding business climate in future.
The survey was launched in Kampala on Monday and will be launched today in Kigali. For the first time it included Burundi and Rwanda, the new entrants to the EAC.
According to the survey Rwanda outshined other partner states in two areas including the issuing of business licences and the freedom from corruption.
This has made the country the most attractive to the business community in the region. The survey says that it takes at least 10 days to obtain a business license in Rwanda and Burundi while it takes longer (about 30 days) in the established EA economies of Kenya, Tanzania and Uganda.
In addition, the survey also revealed that Rwanda is the least corrupt in the region with less bribery measured at a parameter of 10 percent.
Likewise bribe solicitation and payment is higher in other partner states ranging between 66 percent to 39 percent for solicitation and 39 to 32 percent for payment.
Figures are lowest in Rwanda in particular regarding bribe payment at 12 percent and solicitation at 41 per cent. The survey indicates that corruption at customs has been increasing in the region year over year from 22 percent in 2007 to 35 percent in 2008.
However, the number of business leaders who said that bribery at customs was a major obstacle in business was found to be the highest in Burundi at 68 percent, Tanzania and Rwanda at 33 percent, Kenya at 28 percent and Uganda at 28 per cent.
Conversely, bribery requirement at the various customs processes is more prevalent in Kenya and generally least severe in Rwanda.
According to the Steadman Group that carried out the Survey on behalf of East African Business Council (EABC) , “bribes are a major obstacle to doing business in the region” as indicated by the business leaders.
About 240 business leaders in the export and import businesses from across the region were interviewed. Others interviewed included 187 clearing and forwarding agencies and 140 truck drivers were interviewed on various Non-Tariff Barriers (NTBs).
In general, the overall Business Climate Index across the East African region has declined to 44 points in 2008 from 51 points in 2007.
Ugandans are the most positive business leaders with an index of 55, followed by Kenyans and Rwandans (45), Tanzanians (42) and trailing some way behind are Burundi’s business leaders with an index of 32.
“A quick look through the current survey shows that the condition of NTBs continues to deteriorate across most of the clusters used in the BCI, which are police road blocks, weighbridges, cumbersome customs procedures, business registration and licensing among others,” said Mr. Simon Kagugube, a Director at EABC.