Much of the West industrial revolution cannot be credited to the government; and at the same time, you cannot fail to give it credit. In the sense that, it was the government that made conducive environment for business to start and run. Though the actual growth of the economies is largely attributed to the private sector, it is the government that provided them with the environment necessary for such growth.
Come to developing world, the governments are not quite living up to the expectation. Bogged down with corruption and political instability, most governments in the developing world do very little to encourage the growth of businesses. If anything, their action does the opposite and discourage the growth of businesses.
However, let us zero in on the East Africa economic block. Here we are looking at countries such as Kenya, Tanzania, Uganda, Rwanda, Burundi, and South Sudan. Though we might as well exclude South Sudan in this case, as the country has been struggling with serious internal fights.
Of the remaining countries, it is only Kenya and Rwanda that are at least doing something commendable in terms of government encouraging the growth of businesses. The rest still have a lot of room for growth.
That is according to a recent report by the World Bank on ease of doing business. In the report, the World Bank points out challenges facing the growth of businesses. They include laws punishing businesses, political instability, inability to repatriate money, and bottlenecks facing registration of business among others.
Now, in the East African economic block, the World Bank points out Kenya and Rwanda as the best in the region in terms of ease of doing business. The two countries have recorded commendable improvement in the World Bank’s Ease of Doing Business Index for two years in a row.
Kenya had the most improvement this year ranking position 61 up from 80 in 2017. Rwanda ranked position 29 up from 41 last year. On the other hand, Tanzania dropped from position 137 to 144, Uganda from 122 to 127, and South Sudan holding a far back position of 185.
Kenya remarkable reforms
The remarkable improvement made by Kenya is largely attributed to key reforms it undertook that made it easy for SMEs to do business. That is according to the World Bank Group’s Doing Business 2019: Training for Reform report. These reforms made Kenya ranked among the top improvers internationally for 2018; a feat it has achieved four times over the last 11 years.
“Kenya has once again showcased itself as one of the global leaders in adopting international best practices in business regulation,” said Felipe Jaramillo, the World Bank Kenya country director.
“I encourage the government to address the remaining hurdles that affect the establishment and growth of SMEs in the country, a segment that is critical to the creation of more jobs and opportunities for Kenyan youth.”
Jaramillo says Kenya has embraced a strong reform agenda that seems to be bearing fruits judging by the number of investments and jobs being created.
Take, for instance, to register property in Kenya these days, you only need an internet-enabled device and internet connection to register. The new online registration system has cut down the time for businesses to register property from the previous 61 days to just 49 days.
In 2017, Rwanda implemented five reform plans that saw the easing of taxation, tightening quality control and risk-based inspections, which have improved the process of acquiring permits for construction companies.