DJIBOUTI, October 31, 2018 – Djibouti saw a rise of 55 ranks in the World Bank World Bank’s Ease of Doing Business global rankings. This was announced in the World Bank Group’s Doing Business 2019: Training for Reform, released today. This year, Djibouti cleared the top 100 economies, sitting at 99th globally. Last year, the report ranked Djibouti at 154.
The country is among the 10 economies that improved the most across 3 or more areas measured by Doing Business. Over the past year, the country saw 6 reforms in the areas measured by the report – Starting a Business, Registering Property, Protecting Minority investors, Getting Credit, Enforcing Contracts and Resolving Insolvency.
Highlights of the reforms are:
- Starting a Business was made easier by the creation of a one stop shop for business startup.
- On Registering Property, Djibouti made property transfer easier and more transparent by reducing registration fees, implementing strict deadlines to register the sale agreement with the tax authority, and scanning the majority of land titles for Djibouti-Ville and by requiring by law that all property sales transactions be registered at the land registry to become opposable to third parties.
- Djibouti strengthened access to credit by broadening the scope of assets that can be used as collateral, allowing future assets to be used as collateral, allowing general description of debts and obligations and providing secured creditors with absolute priority outside bankruptcy.
- Djibouti strengthened minority investor protections by requiring greater disclosure of transactions with interested parties, strengthening remedies against interested directors, extending access to corporate information before trial, increasing shareholders’ rights and role in major corporate decisions, clarifying ownership and control structures and requiring greater corporate transparency.
- Djibouti made enforcing contracts easier by establishing a dedicated division within the first-instance court to resolve commercial cases and by adopting a new Code of Civil Procedure that regulates voluntary conciliation and mediation proceedings, as well as time standards for key court events.
- Djibouti made resolving insolvency easier by making insolvency proceedings more accessible for creditors and granting them greater participation in the proceedings.
“The Government of Djibouti has engaged into an ambitious reforms program to enable its youth and women to become drivers of changes and create wealth. These targeted interventions in the business environment aim to nurture a new dynamic to shift the mindset from the public sector to private initiative, create employment instead of looking for one.” said Ilyas Moussa Dawaleh, Djibouti’s Minister of Economy and Finance in-charge of Industry, “Today’s report translates the country’s effort to facilitate its business environment. In a few days, we will be launching the Center for Leadership and Entrepreneurship that will provide technical and managerial support, funding, coaching, incubation and acceleration services to our young entrepreneurs”
“The reforms undertaken by the Government of Djibouti to improve the business environment can be a catalyst for change in the country’s economic landscape” said Atou Seck, World Bank Resident Representative in Djibouti. “These reforms lay the foundation for private sector led growth and will help the country tackle the challenges of high unemployment rates and contribute significantly to the fight against poverty”.
Over the years, the number of reforms initiated by the Government of Djibouti have created significant improvements. This is especially demonstrable in the Getting Electricity process. In 2010, the process took 172 days in total, in 2018 it is down to 52 days – an almost two-thirds reduction.
The report features a renaming of the ‘distance-to-frontier’ measurement to ease of 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 ease of doing business score, which underpins the Doing Business rankings.