SA slips down World Bank business index

The World Bank has released its Doing Business report for 2015, ranking 189 countries in terms of ease of doing business.

According to the report, South Africa has slipped down the ranking slightly in the past year, marked down by major hurdles in access to power, and regulations that make access to credit information difficult to get hold of.

Looking at the top 20 nations in the world, the countries where it’s easiest for doing business have remained mostly the same in the 2015 rankings.

17 economies stayed on the list, while 3 entered this year — Estonia, Germany and Switzerland.

Singapore was once again listed as the most business-friendly nation in the world, followed by New Zealand, Hong Kong, Denmark and the Republic of Korea.

“The 20 economies at the top of the ease of doing business ranking perform well not only on the Doing Business indicators but also in other international data sets capturing dimensions of competitiveness,” the World Bank said.

“The economies performing best in the Doing Business rankings therefore are not those with no regulation but those whose governments have managed to create rules that facilitate interactions in the marketplace without needlessly hindering the development of the private sector.”

10 Best countries for business

Similar to the top 20 nations, on the bottom end of the list there has also been very little movement.

Chad, which was ranked 189th in 2014 has managed to climb to 185th in 2015, while Etria, which was 184th last year slipped to bottom of the pile.

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Sub-Saharan Africa accounts for 5 of the 10 top improvers in 2013/14, the World Bank said.

The region also accounts for the largest number of regulatory reforms making it easier to do business in the past year—75 of the 230 worldwide.

More than 70% of its economies carried out at least one such reform.

South Africa

South Africa, ranked 43rd in the world, has slipped two spots from last year’s report, the the country still remains second in Africa, behind Mauritius.

According to the report, access to electricity is one of the biggest barriers to doing business in South Africa, where it takes on average 5 procedures and 226 days to get connected to the grid.

The report also measures the costs required to complete all the procedures to get electricity (including VAT), and notes that it amounts to 729.5% of income per capita in South Africa.

The World Bank also notes that the country has introduced counter-productive credit policies, namely making access to credit information more difficult by requiring credit bureaus to remove negative credit information from their databases.

Conversely, however, South Africa ranked well for protecting minority investors and for it tax systems – though the World Bank noted that companies can expect to pay 28.8% of their profits in tax.

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