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By Patrick Mayoh And I mean all of Sub-Saharan Africa including South Africa (Take a look at this article). A week ago the World Bank released its most awaited “doing business 2013” entitled “smarter regulations for small and medium-sized enterprises”. The “doing business” report is the equivalent of a class report at the end of a school year outlining the best students and those who need to make substantial improvements in their courses. So Singapore is the best student for the 7th year running and there is no reason to think it won’t happen again.
I am mostly concerned about Africa. And this blog is about Africa by the
way. Obviously North-African countries show the strongest signs of improvement
on the continent. Tunisia was ranked 50th and the first African
country; but I would like in this post to turn my attention to Rwanda.
Do you remember the Genocide and
its one million dead? I can hardly, such is Rwanda's improvements across the board
that someone might ask why is Sub-Saharan African not embracing the Rwanda
bandwagon? Ranked 52nd and improving by more than 26% on business
regulations since 2005 Rwanda is on the road to becoming an emerging economy
before many Sub-Saharan economies with more advantages and natural conditions
like Nigeria, Cameroon or the DRC to name just a few.
The “Doing Business 2013” report devoted a whole section to Rwanda
outlining the reasons why the country has transformed itself from a hopeless
nation following the aftermath of the genocide in 1994 to a strong and dynamic
country. From what I have gathered I believe African countries should enact the
following if they want to attain the same level of improvement as Rwanda:
Ø Get rid of unnecessary slogans
and formulate clear strategies
Ø Make investors (domestic
and foreign) love your country (and I mean love not like)
Ø Get leaders (and I mean
the tops one like Presidents, Kings and Prime Ministers) to become business
reforms evangelists
Ø Keep the civil society
close and the private society even closer
Getting rid of unnecessary slogans
Slogans rarely make things happen in business. They
are useless especially when they are not complemented with clear strategies.
African leaders are very good at formulating them. Few possess a vision for the
future and many of those few have yet to formulate strategies for achieving
those visions. In 2000 the Rwandan Government after a 2-year consultation
process formulated a vision for 2020. One of the key tenets of the vision was
the raising of the income per capita from $290 to $900. This was not all. The
government went on to identify the key challenges to address in order to
achieve their vision like: the past civil war, poor governance, weak
infrastructure, underdeveloped financial and private sectors, unemployment,
overwhelming publi debt, a poorly developed education system, HIV and the rapid
growth of the population.
Having identified these hurdles the authorities went on to set
initiatives and projects to address each of these including: the competitiveness
and enterprise development project, the Rwandan investment climate reform
program and the “doing business” unit. Those organizations under the umbrella
of the Government have an annual reform plan; no wonder Rwanda is improving. In
a nutshell formulating a clear strategy revolves around two things:
Ø Identifying key
challenges to your vision as a business or a country
Ø And formulating clear
steps and actions and guidelines to meet each of the challenges identified
Making investors love your country
Rwanda is a landlocked country and natural resources
are scarce unlike in many other African countries. The Government found a smart
way to offset these disadvantages with attractive business regulations. It is
commonsensical, if investors can easily open a business, can be guaranteed their
assets will be protected, can have access to infrastructure (electricity being
a key one), can easily make a profit and so on and so forth why would they resist
falling in love with your country? Rwanda quickly understood this by setting up
the “doing business” unit. The World Bank assesses countries’ business
attractiveness on 11criteria including: starting a business, getting credit,
protecting investors and registering property to name just a few[1].
The “doing business” unit in Rwanda is tasked with improving the
business climate of the country alongside the criteria used by the World Bank.
The results speak for themselves. Since 2005 Rwanda has introduced 26 new
business regulations, improved its credit report system, appointed new notaries
to make it easier to start a business (there had just been one notart up to 2006) ,
reduced the number of days to start a business from18 days to just 3, reduced
the number of days it takes to transfer property from 346 days to less than 30
days and reduced the number of days and official documents necessary to export
goods from 14 official documents and 60 days to 8 documents and 29 days. No
wonder the very pessimistic (especially about Africa) “the Economist” called
Rwanda the “new Singapore” in 2012. In a nutshell like Rwanda:
Ø Set up a “doing
business” unit in your country
Ø Base reform and
improvement initiatives on the criteria of the" doing business" reports
Getting your top leaders to evangelize about business reform initiatives
Paul Kagame is a very energetic type. He regularly
flies to Europe to meet with the Diaspora. I know a friend from Rwanda who has
met him in many occasions; I can hardly say the same about my own President. But you need many
leaders like Paul Kagame. Energetic and determined to make things happen. You need leaders who motivate their teams, their
ministers to think about business reforms, about improving the business
climate. The Competitiveness and Enterprise Development project, the Rwandan
Investment Climate Reform Program and the “Doing Business” unit and many other
key development initiatives bring together representatives from different
ministries. The idea of confining the
economy or the development of a nation to a ministerial unit is actually a
mistake. Instead the Presidents of Africa themselves should be at the top of
development initiatives and encourage their ministers to think like themselves.
Therefore like Rwanda all African countries should have:
Ø Energetic leaders that
are fully nay entirely committed to the development of their respective nations
Ø Those leaders should in
turn inculcate their vision to their ministers
Ø Government practice should
be organized around a vision and a clear strategy to make development truly
happen
Collaborating with the civil society and the
private sector
Nothing happens without them (the people). Actually
everything that happens does with them. Therefore the people, most particularly those who
represent them even at the smallest level should be considered when a country
has a development vision. Development never happens in a vacuum, it needs its
key stakeholders to work meaningfully for the benefit of all. The Competitiveness
and Enterprise Development project, the Rwandan Investment Climate Reform Program
and the “Doing Business” unit and many other key development initiatives not
only bring representatives from the public sector but representatives from the
private sector as well. The combination of inputs from both sectors clearly
explains why Rwanda is ahead and in road to becoming an emerging economy by
2020 as its vision suggests. Like Rwanda, African countries should:
Ø Get the private and the
public sector to have mutual rather than conflicting interests and goals
Ø Identify and engage
with key actors of the civil society
Ø And have the well-being
of the society as the priority of all development initiatives
This is why I believe Africa should embrace the
Rwandan Bandwagon as soon as possible. Do you agree or disagree? Please leave a
comment whatever your view is.
[1] The rest includes: Dealing with
construction permits, getting electricity,
employing workers, resolving insolvency, enforcing contracts, trading across
borders and paying taxes.
