NAIROBI, Kenya, Apr 8 – Kenya has dropped 12 positions in the World Bank annual Doing Business Report 2013, which ranks it 121 out of 185 nations globally, in the ease of doing business.
The report ranks countries based on 10 factors such as ease of starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency.
In the East African region, Kenya is third behind Rwanda and Uganda which ranked 52 and 120 respectively out of 185 countries.
Tanzania came in fourth in the region at 134 while Burundi lagged behind at position 159.
Despite leading in the region, Rwanda dropped seven places mainly due to slow processes in resolving company insolvencies leading to huge loss of investors’ monies.
Kenya’s drop in performance was largely attributed to bureaucracy in registration of property and poor payment of taxes.
Rwanda remained top in the region due to strong performance in starting a business where there are only two procedures required getting a permit for only two days compared to 32 days in Kenya.
However Kenya performed best in the region on issuance of construction permits at position 45, compared to Tanzania at 145.
Despite the high interest rates experienced last year by borrowers, Kenya also led on easy access to credit at position 12 with Burundi lagging behind at 167.
Globally, Singapore was ranked the best country to do business, while the Central African Republic is the worst.
In 2012, Kenya was ranked at position 109 on ease of doing business; Uganda was at 123, Tanzania at 127, Rwanda 45, and Burundi at position 169.
Yearly movements in rankings can provide some indication of changes in an economy’s regulatory environment for firms, but they are always relative since an economy’s ranking might change because of developments in other economies.
Policy makers can learn much by comparing the indicators for their economy with those for the lowest- and highest-scoring economies in the region as well as those for the best performers globally.
These comparisons may reveal unexpected strengths in an area of business regulation-such as a regulatory process that can be completed with a small number of procedures in a few days and at a low cost.
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