In many parts of the world, the process for setting up an industry is highly cumbersome, starting with individual offline submission of applications through multiple manual interfaces. Offline processing and payment of fees for the applications would cause unnecessary procedural delays. Add to this the long turnaround time for clearances from various departments, the lack of any provision to track the status of applications plus an undefined timeline and the process takes a snail’s pace.
Ease of doing Business scores are evaluated by the World Bank on a scale of 0 to 100, based on 370+ reform action points centered at easing governmental regulations and systems in areas such as labor regulations, construction permits, property registrations, inspections, environmental clearances etc. Higher scores lead to higher rankings which means that a country has simple business-friendly laws and the regulatory environment is conducive for running a local firm.
The average global score as on 2019 is 63. The stark differences can be perceived while comparing the OECD countries’ score, i.e. 78 with that of the African region i.e.52. Africa's performance is very low especially compared with East Asia and the Pacific region. Stringent bureaucratic hurdles for setting up and running a business, limited access to credit, inefficient business tax system, minimal protection to private sector participants, limited legal enforcement of business contracts, and generally less conducive environment for undertaking international trade are pegged as the major causes. Amongst the top 50 countries, only 2 belong to the Sub-Saharan African Economies. The rest of them are in the bottom 20’s. All though, the region performs better in the areas of starting a business and getting credit. Kenya, Rwanda and Zambia rank among the world’s top 10 in this category. On average, it now takes around 20 days and costs 33.5% of income per capita to start a new business, substantially faster and less expensive than the 62 days and 305% of income per capita it took in 2003.
Despite concentrated efforts in improving the regulatory system, the pace of reforms across the region has been rather slow and unremarkable. In the rat-race to secure the higher ranks, governments need to be armed to the teeth with the latest technologies centered on true customer satisfaction, who in this case are the industries.
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