CAIRO, October 31, 2018 – Egypt carried out five business reforms during the past year to help create jobs, attract investment and make the economy more competitive, says the World Bank Group’s Doing Business 2019: Training for Reform report, released today.
The five reforms are the highest number to be carried out in Egypt during one year within the past decade, and the second highest to be carried out by an economy of the Middle East and North Africa (MENA) region this year. Also, this year Egypt is the country with the most reforms in comparison to other Arab countries.
The latest reforms helped Egypt advance 8 rankings since last year, to reach a global rank of 120 this year.
“The significant acceleration in the pace of business reforms in Egypt is an encouraging demonstration of the country’s commitment to nurture entrepreneurship and enable private enterprise. We look forward to a continuation of efforts to embrace fair, transparent and efficient regulatory practices which will in turn spur private sector led job creation,’’ said Samia Msadek, Acting World Bank Country Director for Egypt, Yemen and Djibouti.
The reforms of the past year covered the Doing Business areas of Starting a business, Getting Credit, Protecting Minority Investors, Paying Taxes and Resolving insolvency.
Highlights of the reforms are:
- Starting a Business was made easier by removing the requirement to obtain a bank certificate and establishing a one-stop shop, reducing the time to start a business to 11 days now, from 16 days earlier.
- Access to credit was made easier by strengthening the rights of borrowers and lenders with regards to collateral.
- The rights of minority investors were strengthened by increasing corporate transparency.
- Improvements were also made in the area of Paying Taxes by extending value added tax cash refunds to manufacturers in case of a capital investment.
- Resolving insolvency was made easier by introducing the reorganization procedure, allowing debtors to initiate the reorganization procedure, and granting creditors greater participation in the proceedings.
Egypt performs best in the area of Getting Credit, with the maximum score possible on the depth of credit information. With the past year’s reform to strengthen the legal rights index, Egypt catapulted to a global rank of 60 in the area of Getting Credit.
The country also performs well in the area of Dealing with Construction Permits. The cost for completing all procedures to obtain a permit to build a warehouse is only 1.6 percent of the warehouse value, compared to 4.7 percent on average in the MENA region.
Egypt underperforms in the areas of Trading Across Borders and Enforcing Contracts. It costs $1,000 for a company to comply with documentary requirements to import goods, almost five times more than the regional average of $269. And, it takes over 1,000 days for a business to resolve a commercial dispute through a local first-instance court, compared to the 622-day average in the MENA region.
In the 16 years since the inception of Doing Business, Egypt has carried out the most reforms (eight) in the area of Starting a Business. As a result, the time and cost to start a business has been reduced to 11 days, from 42 days during this period, while the cost has been reduced to 40 percent of income per capita, from 79 percent . Despite the reforms, there is room for improvement, as the country ranks 109th globally in the area of Starting a Business.
The report features a renaming of the ‘distance-to-frontier’ measurement to Doing Business ‘score’, to better reflect its main purpose of measuring absolute progress towards best practices. And there are no changes to the methodology this year or to the calculation of the Doing Business score, which underpins the Doing Business rankings.
