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Thursday, September 14, 2006
Tanzania and Rwanda Lead in Regional Economic Reforms Director, GLCSS This week the World Bank confirmed the improving governance and economic trend for two key countries in East and Central Africa. Both Tanzania and Rwanda demonstrated the fastest rate of economic reforms in the region. According to Doing Business 2007, a World Bank study, Tanzania scored in the top 10 nations worldwide in conducting economic, legal, and judicial reforms. It also led the East and Central Africa regions in current reform of the business environment. Tanzania conducted reforms, during the 2005 and 2006 timeframe, in four of the 10 measured World Bank areas. This included reforms in Registering Property, Protecting Investors, Trading Across Borders, and Starting a Business. Rwanda earned the title of second ranking nation in the region for business reforms when it improved three areas: Starting a Business, Paying Taxes, and Enforcing Contracts. Kenya, in terms of World Bank overall economic reform measurement, holds the number one regional spot and the 83rd position out of 175 nations on the list. During the current measured period, it continued its reforms with improvements in Dealing With Licenses. Uganda, with an overall third place regional standing with a ranking of 107 out of 175 nations, conducted reforms in the Starting a Business category. Overall, through these reforms, African nations have reduced the time to start a business by nine percent and the cost by some 13 percent. Tanzania ranked just behind Uganda at fifth place regionally and 142nd place worldwide. It held the distinction of improving eight positions from being ranked 150th in last year’s rankings. Many of these reforms strike at the heart of traditional stumbling blocks to economic progress in Africa. As the World Bank stresses, these reforms improve transparency and reduce the involvement of multi-layers of bureaucrats. It also involves publishing the step-by-step process to open a business or clear items through customs. For example, Tanzania reduced the number of days to clear customs by 12 days by installing electronic-data interchange for customs documents and a Risk Based Inspections process. These recent findings also support other research that documents the economic and governance improvements in some countries of the region. A recent Heritage Foundation report—2006 Index of Economic Freedom—cited Rwanda for achieving the distinction of the largest free market change in the last ten years of any country on the list and the largest change of any country in the region in the last four years. The Washington DC-based The Fund for Peace in its second annual Failed State Index also supported the research that shows improvement in governance in Tanzania. According to their index, Tanzania dropped some 13 risk points in its 2006 report and moved from 32nd in 2005 on the list of countries at the highest risk of failure to number 71. Rwanda also followed this improvement by reducing its risk position from 12 on the 2005 list to number 24 in 2006. On the opposite end of the scale, the Democratic Republic of the Congo (DRC) continues its failure to demonstrate significant improvement in economic freedom or business environment liberalization. On the Failed Index list it scored as the second most at risk nation in the world, which is only behind Sudan. In addition, the DRC in the most recent World Bank study, rested in last place in terms of economic reform or governance improvements. The DRC failed to register a single reform; however, since its growth is tied to the extractive industries, there appears to be little call from the international community for reform. In contrast, the three countries near the bottom of the regional list— Central African Republic (CAR), Chad, and Burundi (in order from the bottom) did make slight progress. Both the CAR and Chad registered reforms in one area each. Burundi, with significant international community influence, registered reforms in two areas: Enforcing Contracts and Closing a Business. Once again it is clear that much of the region is moving forward in joining the open governance model. This has been demonstrated in improved Foreign Direct Investment (FDI) flows and continued economic growth. However, the Great Lakes Centre for Strategic Studies (GLCSS) remains cautious about increased economic pressures from the current regional energy crisis and growing shortage of water. On balance, the reduced price of oil will assist their growth and reduce some inflationary pressure. The Great Lakes Centre for Strategic Studies is a London-based think tank. Blogger News Network is advertiser-supported, and your visits to our advertisers help BNN to meet its expenses. Help keep us afloat! posted by GLCSS at 8:26 AM |
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