The International Finance Corporation (IFC), part of the World Bank Group, has released a report called “Doing Business in the East African Community 2010.” The report examines business regulations in five East African countries: Burundi, Kenya, Rwanda, Tanzania, and Uganda [1]. These five countries are part of the East African Community (EAC), which is a regional intergovernmental organization with headquarters in Tanzania [2].
The countries were ranked on a scale of 1 to 183, with 1 being the most ideal country to conduct business and 183 being the least ideal. The countries averaged 116, with Rwanda the highest at 67 and Burundi the lowest at 176 [1].
The report found mixed results for each country. For example, it is possible to start a business quickly in Rwanda (eleventh place), but it comes in last place in terms of the time and cost of liquidating a business. The report also found that Tanzania ranks 31st in the world for enforcing business contracts, but securing a construction permit is very complicated and costly there [1].
The report estimates that if the best practices of each country were adopted by the entire region, the EAC would rank 12th globally in the business report, which is comparable to wealthy nations [1].
Overall, the report found that “East African economies continue to improve their performance” [1], though it appears many improvements must take place before the EAC is up to wealthy nations’ standards for business.
By Julia Korn, Research Associate
About the East African Community:
Headquartered in Arusha, Tanzania, the East African Community (EAC) is the regional intergovernmental organization of the United Republic of Tanzania and the republics of Burundi, Kenya, Rwanda and Uganda [2].
About the World Bank:
The World Bank Group consists of five closely associated institutions, all owned by member countries that carry ultimate decision-making power. Each institution plays a distinct role in the Group’s mission to fight poverty and improve living standards for people in the developing world. The World Bank Group encompasses the World Bank, which consists of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID).
About International Finance Corporation:
A member of the World Bank Group, the International Finance Corporation (IFC) uses loan and debt securities, equity investments and guarantees with the intent of alleviating poverty. It invests in financial institutions and other companies in emerging markets as well as providing technical assistance. The IFC has 182 member countries that “collectively determine its policies, and approve investments.” In fiscal year 2009, its new investments totaled USD 14.5 billion.
Sources and Additional Resources:
[1] International Finance Corporation. “Doing Business in East African Community 2010” May 24, 2010. http://www.ifc.org/ifcext/media.nsf/Content/DB10EastAfrica_May2010
[2] East African Community: http://www.eac.int/about-eac.html
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