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Monthly Archives: October 2013

Africa’s ranking in the 2014 Doing Business Report, By Chofor Che, 29 October 2013


The Doing Business 2014 Report was published by the World Bank on the 29 of October 2013, with assistance from 10 200 experts from 189 states. This report focuses on understanding regulations for Small and Medium-Size Enterprises (SMEs), especially regulations affecting domestic firms in 189 economies and classifies the economies in 10 sectors of business regulation, such as commencing a business, resolving insolvency and trading across borders. The 2014 report which is the11th edition of the Doing Business series, covers regulations measured from June 2012 up to May 2013.

African States like Rwanda, Djibouti, Cote d’Ivoire and Burundi are considered among the growing economies in the world. According to this report 114 economies put in place 238 regulatory reforms in 2012/13 making it easier to do business. This report also reveals that since 2009 Sub-Saharan Africa which is home to 9 of the 20 economies, has made some progress in narrowing the gap with the regulatory frontier. Low-income economies narrowed this gap twice as much as high-income economies did. Singapore came first in the doing business ranking. Other states with the most business-friendly regulatory environments include, China, Hong Kong, the United States of America, New Zealand, Denmark, the Republic of Korea, Norway, Georgia, the United Kingdom and Malaysia.

For the very first time the Doing Business report includes data from states like Myanmar, Libya, South Sudan and San Marino. Case studies focus on good practices such as risk-based inspections in dealing with construction permits; the role of minimum capital requisites in commencing a business; single window systems in trading across borders; the cost structure in getting electricity; e-courts in enforcing contracts and e-filing and e-payment in paying taxes.

According to the 2004 report,Mauritius is the best ranked state. Rwanda which is the second best ranked state in Africa comes 23rd in the world’s ranking. Though not good enough Rwanda should be given some kudos especially as this State which suffered from a genocide ranks better than France which comes in the 38th position. South Africa is the third best African state where creating a SME is easy. In the world ranking, South Africa comes in the 41st position. Tunisia which comes fourth in Africa is 51st in the world ranking. Botswana comes 5th on the continent and is positioned 56th in the World’s classification. Ghana is in the 67th position in the world at 6th in Africa, Seychelles is 80th, Zambia is ranked 83th, Morocco comes in the 87th position, Namibia comes in the 98th position, Cape-Vert comes in the 121st position, Swaziland is ranked 123rd, Ethiopia is ranked 125th, Egypt is ranked 128th, Kenya comes in the 129th position, Uganda comes in the 132nd position, Lesotho is ranked in the 136th position, Mozambique is ranked in the 139th position, Burundi occupies the 140 position, Sierra Leone comes in the 142nd position, Liberia comes in the 144th position and Tanzania ranks 145th. Following Tanzania according to the Doing Business ranking, is Nigeria, Madagascar, Sudan and the Gambia which are ranked respectively in 147th, 148th, 149th and 150th positions. Algeria, Burkina Faso and Mali are ranked in the 154th, 155th and 156th positions, while Togo and Djibouti come in the 157th and 160th positions. Gabon is 163rd, Equatorial Guinea 166th, Cote d’Ivoire 167th, Cameroon 168th, Sao Tome et Principe is ranked 169th, Zambia 170th, Malawi 171st, Mauritania 173rd, Benin 174th, Guinea 175th, Niger 176th, Senegal 178th, Angola 179th, Guinea Bissau 180th, the Democratic Republic of Congo 183rd, Eritrea 184th, Congo Brazzaville 185th, South Sudan 186th, Libya 187th, Central Africa Republic 188th and Chad comes 189th in the last position.

Judging from the Doing Business ranking, states like Rwanda, South Africa, Tunisia, Botswana and Ghana have instituted some reforms to lessen the time of setting up a SME. Nearly all the states in the Central African sub region occupy deplorable positions. This is so because of corruption and poor governance. States like South Sudan, Central Africa Republic, The Democratic Republic of Congo and Chad are still plagued by armed conflict.

In as much as certain pessimists may criticize some of the parameters utilised in coming up with this ranking, as one who lives and works on the continent, I find a lot of truism in this report. For instance, my home country Cameroon still has a long way to go when it comes to starting up a SME. Although the state has set up institutions and anti corruption agencies to fight corruption and ease the creation of SMEs, it remains a pain in the neck in setting up a SME and getting it functional.

It is thus germane for African statesmen to ease the creation of SMEs. Fighting corruption, instituting good governance and curbing armed conflicts should be a priority. Curbing internal and external trade barriers as well as reducing the amount of taxes rather than creating more taxes should be the way to go. The decentralisation process needs to be taken seriously and hastened up. These are steps which can better Africa’s image on the global scene.

 
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Posted by on October 29, 2013 in Africa Development

 

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West African Leaders create an illusive custom duty for the sub region envisaged to kickoff in 2015, By Chofor Che, 28 October 2013


Leaders of the Economic Community for West African States (ECOWAS) met on the 25 of October 2013 in Dakar Senegal for an extraordinary summit almost devoted to economic issues to strengthen regional integration. According to Stephane Ballong, Special envoy of Jeune Afrique in a publication dated the 26 of October 2013, this meeting was regarded by the host, President Macky Sall as a historic one. The leaders of ECOWAS states adopted a Common External Tariff (CET) for all fifteen Member States of the Community. Concretely, this means that from the date of application of this new customs duty scheduled to kick off in January 2015, once customs duties are levied on goods at the entrance of one of the states in the sub -region, these goods will be able to move freely in all other states in the sub-region. This will equally allow foreign business partners have access to a market of over 300 million people of the ECOWAS community.

The leaders of ECOWAS states also put in place an additional tax, which regulates importation and protects local production. A tax was also instituted which warrants that member states make some financial contributions to hasten Africa’s regional integration. Ballong of Jeune Afrique concurs that the realisation of this new customs duty planned since the inception of ECOWAS in 1975, is also a strong argument that the community can use in trade negotiations. “Thanks to the Common External Tariff, we now form a solid competitive block”, affirmed Alassane Ouattara, the Ivorian Head of State and Chairman of ECOWAS. According to Kadré Desire Ouedraogo, President of the ECOWAS Commission, ECOWAS states will be able to accelerate trade and financial negotiations for an Economic Partnership Agreement (EPA) that will give guidance on trade with the European Union. EPA is supposed to replace the Cotonou Agreement in force since June 2000 and allow products from states in Africa, the Caribbean and Pacific (ACP) have privilege access to European markets. The Cotonou Agreement contrary to World Trade Organisation (WTO) rules did not allow Africans to develop their business and diversify their economies. Some economists argue that EPA should not only comply with international standards, but also take into account the development dimension of African economies.

The ECOWAS summit in Senegal was a very ambitious one especially with respect to regional integration. Having a single custom duty for the whole sub region is a laudable idea, but will the statesmen of these nations respect the conditions of this newly created customs duty? The responsibility of ensuring that this dream reaches fruition lies in the hands of the leaders of the ECOWAS region. ECOWAS states are still plagued with ills such as corruption. Taxes still remain very high in these ECOWAS states. The private sectors in most of the ECOWAS states remain poorly organised. Decentralisation remains an illusion in some of these states especially as central governments still continue to carry out functions traditionally associated with regional and local governments. Leaving these ills unresolved and instituting a sub regional custom duty will thus be a waste of time because come 2015, these very states that agreed to institute such a custom duty will find fault in it. It is thus germane for African leaders to put the horse before the cart and stop wasting tax payers money by organising summits which produce no fruit. It is important for every African state and most especially ECOWAS states to first of all put in place institutions of transparency and good governance, revamp the private sector, before agreeing on a custom duty for the sub region. If not we may just have another scenario of empty promises.

– See more at: http://africanliberty.org/content/finally-common-external-tariff-west-africa-%E2%80%93-chofor-che#sthash.Q8px7TGt.dpuf

 
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Posted by on October 28, 2013 in Africa Development

 

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African bureaucrats to blame for the Lampedusa tragedy – Chofor Che , Published at AfricanLiberty.org, 18 October 2013


On the 3rd of October 2013, the BBC reported that many African migrants died and many more were missing after a boat carrying them to Europe sank off the southern Italian island of Lampedusa. Over 200 bodies were recovered and more were found inside the wreck. According to the BBC, passengers reportedly threw themselves into the sea when a fire broke out on board. Most of those on board were from Libya, Eritrea and Somalia, reported the United Nations (UN). This shocking and painful incident has generated a lot of debates as to who is to blame. Many argue that Europe is to blame for this calamity, while others are of the view that African leaders are to blame for this tragedy.

There has been a lot of controversy about immigration for a longtime. I am one who advocates that individuals should be allowed to migrate in search of greener pastures. Many Europeans or Americans would not agree with me, especially if immigration is carried out ‘illegally.’ According to these Europeans and Americans, Western states cannot be coming out of a recession and Africans are instead heading there to make things worse. That notwithstanding the European Union reacted with shock to the death of these Africans in the Mediterranean Sea. But will the tragedy lead to a change in the European Union’s migration and refugee policy?

“There is no miraculous solution to the migrant exodus issue,” said Italian Foreign Minister Emma Bonino according to the 3rd October BBC report. “If there were we would have found it and put it into action.” This view point by Italian Foreign Minister, warrants a lot of reminiscing. For long we have tackled issues of immigration without much reflection, the reason why millions of innocent victims in search for a better life and good economic conditions continue to die.

In as much as many point a finger at Europe or the international community for the deaths in Lampedusa, much of the blame goes to African leaders, and especially the African Union. The governance systems in African states, inherited from colonial masters, remain repressive. Despite the much talk about African renaissance, a great majority of Africans remain desperate and poor. According to Ventures Africa, Africa has more millionaires than we can imagine. What a paradox to have a continent with a lot of millionaires and a lot of poor people. It is evident that several African leaders have not met promises made to their populace during electoral campaigns. Farm to market roads remain deplorable, small and medium size enterprises have no hope of growth, the taxes remain exorbitant and ownership of property remains an illusion. In addition to these ills, conflict and political tension is still the order of the day in states like Somalia and Libya. With such a hopeless situation why would Africans not flee in their numbers for peace and a freer environment for economic development?

There is a solution to this mêlée, though not a miraculous one as rightly put by Italian Foreign Minister. The solution to this problem lies in the hands of African bureaucrats and technocrats who have decided to amass wealth and power at the detriment of their populace. African leaders in collaboration with the UN and the African Union need to open up the markets in Africa. Some credit goes to the governments of Rwanda and Botswana who have made long strides in ensuring that the private sector flourishes in these countries. Many African countries still need to make their economies conducive so that Africans will not think of utilising very unsafe and risky means in a bid to getting greener pastures abroad. In as much as I am an advocate of immigration especially as most Europeans and North Americans are immigrants themselves, African bureaucrats should curb some of these barriers which make their citizens flee. If some of these suggestions are reflected upon and taken into consideration, we will stop mourning over loss of life like in the Lampedusa tragedy.

 
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Posted by on October 18, 2013 in Africa Development

 

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Translating words into action after the 4th World Congress of United Cities and Local Governments in Rabat – Chofor Che, published at Africanliberty.org 08 October 2013


The 4th World Congress of United Cities and Local Governments (UCLG) took place in Rabat, Morocco, from October 1 to 4, 2013 under the theme: “Imagine Society, Build Democracy.” Delegates from over 100 states around the world attended the Summit, which brought together leaders of local and regional governments, public and private sectors, international organisations, civil society and financial institutions. Was it worth the trouble bringing all these actors together?

This summit coincided with the one hundredth anniversary of the international municipal movement. It was a unique opportunity for sharing and exchange between Africa and the rest of the world. The World Summit of Local and Regional Leaders was a special event in that it was the first UCLG Summit to be held in Africa, with Rabat as the host city. It was indeed an opportunity to highlight the potential of the continent of Africa, to learn first-hand of the major democratic and local governance reforms that have been carried out in Morocco in recent years and to pay tribute to this international city with important cultural heritage and legacy.

The 2013 World Summit was structured around two main concepts: (1) The contribution of local and regional authorities to the well-being of communities and the role in the Post 2015 development agenda; (2) The identification of the new challenges and models needed to answer the demand of an increasingly urban population as we work towards Habitat III in 2016.

In other to elucidate on these two main concepts, several side events were organised. It was an honour to be invited to three of these side events organised by Dr. Najat Zarrouk, Governor and Director of Training of Administrative Cadres at the Ministry of Interior, who also happens to be the Chair of Experts on Public Administration at the United Nations. It was equally an opportunity for me to make a presentation during the side event on human capital development entitled “Professionalisation and human capital development of regional and local government in Africa: A promising paradigm for the continent’s renaissance.”

A lot was said about the central government’s responsibility in ensuring that regional and local governments in Africa are autonomous. Several panelists including my humble self agreed that in ensuring adequate autonomy, the central governments of Africa in collaboration with universities, think tanks, international orgainisations like the UN and the World Bank, needed to continuously hone the skills of these regional and local government actors. A lot was also said about ensuring that adequate finances were allocated to these tiers of government to ensure that they play an effective role in Africa’s renaissance. Equally the role of women in regional and local government affairs was not left out.

Judging from the intentions of such an event, one would say UCLG is dedicated to ensuring that regional and local government especially in Africa take part as partners and not as second or third ranking actors in development as they have been considered in the past. In this regard, central governments in Africa need to give regional and local government actors the role they deserve in governance and development issues. It is equally vital for central governments to ensure that there is a high degree of professionalisation and human capital development especially with a gender focus, so as to ensure maximum output at local and regional government levels. If recommendations arrived at during this summit cannot be materialised especially in Africa, it was not worth the trouble bringing together leaders of local and regional governments, international organisations, public and private sectors, financial institutions and civil society. chofor-che-two.jpg

 
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Posted by on October 8, 2013 in Africa Development

 

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Africa: The poor showing on the World Economic Freedom ranking – by Chofor Che, Published at Africanliberty.org, 2 October 2013


Chofor CheThe World Economic Freedom report was released on Wednesday, the 18 of September 2013. According to Mark Allix in a publication in BusinessDay Live, the report collects data from the World Bank, International Monetary Fund (IMF) and the World Economic Forum (WEF), among other institutions, to come out with country rankings. The WEF report measured variables across five areas: the legal structure and security of property rights in the state; the freedom to trade globally, the size of a nation’s government; the regulation of credit, labour and business and the states access to “sound” money.

According to a report by the South African based, Free Market Foundation, South Africa is ranked 88th out of 152 nations and territories in the latest WEF report. Hong Kong again topped the rankings of 151 countries and territories, followed by Singapore, New Zealand, and Switzerland in the Fraser Institute’s annual Economic Freedom of the World report. The United States, once regarded as a bastion of economic freedom, now ranks 17th in the world. Zambia, Rwanda, Botswana, Kenya, Tunisia and Uganda are ranked above South Africa, while not one of the other BRICs (Brazil, Russia, India and China) states was ranked in the top 100 states with a good economic freedom record in the world.

South Africa, which had not long ago been praised for its stock exchange regulation and auditing and reporting standards, performed poorly with respect to the top quartile of economic freedom indicators in all five categories. The weakest category was connected to the size of South Africa’s government, especially the sub-categories of state consumption and state enterprises and investment.

This means that the South African government consumed a higher proportion of national economic output than the world standard, and had “relatively heavy involvement” in the production of, and investment in, some of that output. Most disturbingly, the report adds that South Africa has been deteriorating according to these ratings since 2000, as government “drains” resources from the more productive private sector.

Mark Allix of BusinessDay Live opines that it is a pity that South Africa was found to be below the global average score. The WEF in collaboration with other organisations had earlier on warned South Africa of its education and labour market inefficiencies. WEF had therefore predicted the country’s poor ranking. According to WEF, coupled with the state’s remaining capital controls, centralised collective bargaining and business regulation, South Africa is plagued by the threat of fixed pricing, the compounded effects of infrastructure deficits and poor policy implementation.

According to Azar Jammine a South African Chief economist and Director of Econometrix (Pty) Ltd, is of the view that the South African economy had long suffered from apartheid. There were some hopes after the apartheid era, but now these hopes seem to be dashing away, especially with the crisis that recently hit the mining sector.

Despite the doubts portrayed by many pessimists about the methods utilised by the WEF in coming up with such rankings, there remain some truism in reports like the WEF report. Most African states, including South Africa have not given the private sector the chance to excel in economic freedom. A critical analysis of the economic atmosphere of most African states show that the legal structure and security of property rights in the states remains poorly developed. There is equally a porous promotion of the freedom to global trade. Most of the sizes of the central governments in Africa are humongous necessitating the use of a great chunk of tax payer’s money to cover unwarranted expenses. The gross regulation of credit, labour and business also adds to Africa’s poor economic ranking in the WEF report.

It is obvious that people living in states with high levels of economic freedom have greater prosperity, more political and civil liberties, better health and longer lifespans. This is based on personal choice, voluntary exchange, freedom to compete, and the security of private property. If African states want to turn things around, then it is imperative that they rethink various policy strategies with respect to economic freedom and liberty.

 
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Posted by on October 4, 2013 in Africa Development

 

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