Bamako, Mali, January 25, 2012—A new report from IFC and the World Bank finds that member states of the Organization for the Harmonization of Business Law in Africa (OHADA) have increased the pace of reform in making it easier for local firms to do business.
The report, Doing Business in the OHADA Member States 2012, draws on data from the annual global Doing Business study and takes a detailed look at business regulations in Benin, Burkina Faso, Cameroon, Central African Republic, Chad, the Comoros, Republic of Congo, Côte d'Ivoire, Equatorial Guinea, Gabon, Guinea, Guinea-Bissau, Mali, Niger, Senegal, and Togo. The report states that the 16 OHADA member states could benefit from sharing good practices in business regulation as measured by Doing Business.
Founded in Mauritius in 1993, OHADA is a system of business laws and implementing institutions adopted by 16 West and Central African nations. OHADA is the French acronym for "Organisation pour l'Harmonisation en Afrique du Droit des Affaires."
The average ranking of the OHADA member states is 166 out of the 183 economies measured in the global Doing Business 2012 report. Mali, with a global rank of 146, is the easiest place among OHADA member states for an entrepreneur to do business, followed by Burkina Faso (150) and Senegal (154). In the past six years, all 16 OHADA member states made it easier to do business. Across the region, the average cost of starting a business decreased from 338 percent to 110 percent of the average per capita income. The average time required to register property also decreased by 28 percent.
No single economy outperformed the others across the board. But in some of the categories that were measured, the region’s economies are comparable to the world’s best performers. Senegal, for example, has reduced the time needed to set up a business to only five days through its “one-stop shop” system – the same amount of time as in Canada. After four years of successive reforms, dealing with construction permits in Burkina Faso takes only 98 days – three months faster than the European Union average.
“Competitive economies cannot ignore what their neighbors are doing”, said Dorothé Sossa, Permanent Secretary of OHADA. “Pooling, as is the case with OHADA, and sharing reform experiences is an opportunity to improve national and regional competitiveness."
One of OHADA’s priorities is to establish a uniform legal framework to govern business activities in the region’s economies. This year, the first revision of the body of commercial laws in the region simplified business entry in eight member states and strengthened secured transaction laws in all 16 member states.
“The overhaul of the common business legislation addressed two of the top constraints to enterprise development and investment in Africa: access to finance and the quality of the legal framework,” said Pierre Guislain, Director of Investment Climate Advisory Services of the World Bank Group.
Doing Business in OHADA Member States 2012 was prepared as part of the OHADA Business Law Reform Program of the Investment Climate Advisory Services of the World Bank Group. The program includes support to the OHADA member states and the OHADA Permanent Secretariat in reforming and implementing the common set of laws.
About the World Bank Group
The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), which together form the World Bank; the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world.
About the Doing Business report series
Doing Business analyzes regulations that apply to an economy’s businesses during their life cycle, including start-up and operations, trading across borders, paying taxes, and resolving insolvency. The aggregate ease of doing business rankings are based on 10 indicators and cover 183 economies. Previous year’s rankings are back-calculated to account for the addition of new indicator(s), data corrections, and methodology changes in existing indicators so as to provide a meaningful comparison with the new rankings. Doing Business does not measure all aspects of the business environment that matter to firms and investors. For example, it does not measure security, macroeconomic stability, corruption, the level of skills, or the strength of financial systems. Its findings have stimulated policy debates in more than 80 economies and enabled a growing body of research on how firm-level regulation relates to economic outcomes across economies.