Ghana, the easiest place to do business in West Africa- IFC

Ghana has established Africa’s newest centralized Collateral Registry and by improving credit information and legal rights through granting an operating license to a private credit bureau, the West African country led the world in making it easier for businesses to obtain credit.

This is a finding of Doing Business 2011: Making a Difference for Entrepreneurs, the eighth in a series of the flagship annual reports, published by IFC and the World Bank benchmarking the regulations that enhance business activity and those that constrain it.

The report presents qualitative indicators on business regulation and the protection of property rights for 183 economies from Afghanistan to Zimbabwe. The data are current as of June 2010.

In the past year, 27 economies in Sub-Saharan Africa implemented 49 regulatory reforms to improve their business environment. Three countries, Rwanda, Cape Verde and Zambia, rank among the top 10 worldwide on improvement in the ease of doing business based on the number and impact of changes to business regulations between June 2009 and May 2010.

In the sub region, Ghana remains overall the easiest place to do business and ranks tops in two other indicators, Registering Property and Paying Taxes. Sierra Leone is the easiest place in ‘Start a Business’ and provides the best protection for investors; Burkina Faso provides simplified regulations for getting a Construction Permit, Cape Verde tops in Trading Across Borders and Enforcing Contracts, while neighbouring Cote d’Ivoire makes it easiest in legally ‘Closing a Business.’
IFC Country Manager for Ghana, Mary Jean Moyo, said she was pleased that Ghana implemented reforms in Getting Credit, one of the nine indicators of the report, and has maintained its overall ranking as the easiest place to do business in West Africa.

According to her, IFC, working with SECO, has provided advisory support in improving Secured Transactions in Ghana. However, there are clearly opportunities, especially in deepening the products and scope of the financial markets to ensure that the legal and regulatory framework established by the Borrowers and Lenders Act; the credit reference bureau and the Collateral Registry actually translates into affordable long term credit for firms, especially the large SME market.

Moyo indicated that interest rates in Ghana remain high and there are other areas, such as infrastructure and the provision of reliable and affordable energy, which, while not measured by the ‘Doing Business’ report, has a direct impact on the overall investment climate and thus the ability of Ghana to develop a true competitive edge in the region and globally.

This year, ‘Doing Business 2011’ introduces a new indicator, Getting Electricity. This and the Employing Workers indicators are not included in the ranking on the overall ease of doing business ranking. This report also features cumulative five-year trends of the focus and pace of legal and regulatory reform in the economies surveyed.

Since 2005, about 85% of the world’s economies have made it easier for local entrepreneurs to operate, through 1,511 improvements to business regulation. Among the 30 most-improved economies during those five years, a third are in Sub-Saharan Africa Burkina Faso, Ghana, Madagascar, Mali, Mauritius, Mozambique, Nigeria, Rwanda, Senegal and Sierra Leone.