It considers 11 areas in the life cycle of a business; starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and employing workers.
This generally shows that of the African governments considered not many have created a regulatory environment that fosters business operations. Figure 1 gives a snapshot of SADC member state rankings as computed in the report.
The regional average ranking of 118 corresponds to approximately 60% of the global countries considered ranking better than SADC as a whole in terms of ease of doing business. Most of the SADC member states fair quite poorly in the global rankings. Only
Figure 2 shows the regional averages for the ten indicators used in the report. The SADC region in general has performed quite poorly in these business indicators with access to electricity (rank 139) and trade across borders (rank 129) being of particular concern. Poor access to credit is also a hindrance to business creation and success in the region.
According to the Report the ten business topics are disaggregated into smaller constituent indicators and the interested reader is referred to the report for greater detail. A comparison of the best and worst regional performer against the best global performer is given in Table 1.
Table 1: 'Doing Business' indicator performance for SADC region
When examining the SADC region we see that it is easier to start a business, to register property as well as to resolve insolvency in
As the world economy becomes ever more globalised the facilitation of trade between economies is become increasingly important for business. Various non-tariff barriers (NTBs) such as excessive prohibitive document requirements, slow and inefficient port of entry operations, inadequate and often lack of infrastructure as well as burdensome customs processes all contribute to extra and often unwarranted costs and delays for importers and exporters which lead to a reduction in trade potential.
It is interesting to note that, as pointed out in the report, a 10% drop in trading costs leads to greater gains for exporters in developing countries than from a similar reduction in tariffs applied to their products in global markets. It is for these reasons as well as its importance in regional integration that the 'Trading Across Borders' indicator will be more closely examined.
Table 2: Trading Across Borders
The average rank for the SADC region on the 'Trading Across Borders' indicator is 129 which is substantially worse than the EU (36) and MENA (89). However, SADC slightly outperforms the regional average of the ECOWAS (133) which points towards a slight advantage in its ability to facilitate the export and import of goods.
The worst performer is
Documents required to export and import include; bank documents, customs clearance documents, port and terminal handling documents as well as transport documents.
The regional average for the number of documents required to export is 7 which is the same as ECOWAS and slightly more than MENA (6) and the EU (4). The best performer is
On average, 8 documents are required to import for the region. This is again significantly higher than the EU (5). SADC performs the same as MENA (8) and outperforms ECOWAS (9).
The time required to export and import, measured in days, includes the time taken in obtaining, filling and submitting the relevant documents as well as inland transport and handling, customs clearance and inspections as well as port and terminal handling.
The worst SADC export performer is
For time taken to import a container,
When the report considers the cost required to export and import (US$ per container), this includes; all documentation, inland transport and handling, customs clearance and inspections, port and terminal handling and official costs only. Bribes are excluded.
When considering the cost of exporting,
Import costs per container in the region average
To facilitate trade across borders governments around the world have introduced various tools. These have included single windows, risk-based inspections and electronic data interchange (EDI) systems.
Within SADC, the following reforms have occurred during the period 2008-2014; implementation of EDI systems, improvement of port infrastructure, streamlining of document requirements, computerized risk management systems for inspections, cooperation between customs officials of different member states, involving the private sector in terminal handling processes to speed up and increase quality of service, electronic submission of custom documents and the implementation of a Pre-Arrival Declaration (PAD) system to name a few.
When considering the trading across borders indicator as a whole, one may be inclined to conclude that the region is slightly more geared towards the export of goods, but definite improvements can still be made to ensure greater trade facilitation.
Improvements in import processing and a reduction of import costs are also important as this enhances the competitiveness of local production and facilitates capital formation which would support wealth creation and the reduction of unemployment.
SADC as a region fares poorly when compared to the EU and MENA and comparatively better than ECOWAS and although remedial steps have been taken to address the poor performance of trading across borders a lot still needs to be done, particularly with respect to customs facilitation and the implementation of cross-border agreements.
As a case in point, entrepreneurial activities and the subsequent creation of small and medium enterprises (SMEs) may often be considered the lifeblood of an economy.
SMEs provide employment and business opportunities for a large proportion of the population as well as being an important source of revenue for governments. According to a Forbes report, in the US alone over 50% of the working population is employed in a small business and these have provided over 65% of net new jobs since 1995.
A small business is often a relative term and in developing countries such as
The generally poor performance of export earnings for small businesses in
The lack of performance could also be attributed to poor levels of education, the absence of management and work skills, difficulty of access to working capital and low levels of investment in research and development.
However, it is widely believed that small businesses growth and development hold the key to powering
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