South African cities are making efforts to improve the ease of doing business, although the pace of reforms has been slow in the last three years, according to a World Bank Group report.
South Africa is one of the countries counted among others that have implemented reforms making it easier to do business. These reforms were implemented from May 2018 to May 2019.
This was revealed at a webinar organised by BrandSA and Invest SA, through the Department of Trade, Industry and Competition (DTIC) in collaboration with Government Communication and Information System (GCIS) and the Companies and Intellectual Property Commission (CIPC) on Tuesday.
South Africa made enforcing contracts easier by introducing a specialized court dedicated to hearing commercial cases.
With regards to employment, South Africa introduced a national minimum wage.
Doing Business in South Africa 2018, the second in the subnational series on South Africa, analyzes business regulations for domestic small and medium enterprises in nine cities – Buffalo City, Cape Town, Ekurhuleni, eThekwini, Johannesburg, Mangaung, Msunduzi, Nelson Mandela Bay and Tshwane.
These cities were assessed on five Doing Business areas: Dealing with Construction Permits, Getting Electricity, Registering Property, Enforcing Contracts and Trading Across Borders.
Trading Across Borders
In the area of Trading Across Borders, the report measures four of South Africa’s maritime ports – Cape Town, Durban, Ngqura, and Port Elizabeth.
The report finds that in the three years since the last study, Cape Town, eThekwini, Johannesburg, Mangaung and Nelson Mandela Bay implemented reforms.
Four of the reforms improved the conditions for businesses to obtain electricity, and one made it easier to transfer property.
Although reforms have been few, where they were implemented, the results have been striking.
Mangaung, for example, automated municipal processes that have halved the time needed to transfer property, from just over seven weeks to three weeks. As a result, Mangaung has moved from lowest performer in this area in 2015 to best performer now.
Registering Property and Getting Electricity
Johannesburg performs well in the areas of Registering Property and Getting Electricity, which was an area of improvement in this report. Johannesburg, along with Cape Town and eThekwini, started monitoring reliability of electricity supply, in line with international best practices.
In the area of registering property, Johannesburg has few procedures for transferring property, making it one of the fastest locations in the country. However, Johannesburg lags in construction permitting and contract enforcement.
Similarly, Cape Town continues to lead in construction permitting, because it has efficient procedures and is the fastest place to obtain construction approvals, much faster than most high-income economies.
Doing Business 2020
Doing Business 2020, a World Bank Group flagship publication, is the 17th in a series of annual studies measuring the regulations that enhance business activity and those that constrain it.
Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 190 economies – from Afghanistan to Zimbabwe.
In 2019, governments of 115 economies around the world launched 294 reforms over the past year to make doing business easier for their domestic private sector, paving the way for more jobs, expanded commercial activity and higher incomes for many.
The Doing Business 2020 study shows that developing economies are catching up with developed economies in ease of doing business.
World Bank Ease of Doing Business Index
In the case of South Africa, GCIS Director-General Phumla Williams said working together and ensuring that bold reforms are undertaken can move the country back into the top 50 of the World Bank Ease of Doing Business Index.
In the recent ranking, South Africa was at position 84 in a total of 190 countries.
“A lot has been said about the need for reform to improve South Africa’s ranking on the World Bank’s Ease of Doing Business Index, and substantively improve South Africa’s business environment, along with the need to positively influence investor perception,” Williams said.
Williams said she is pleased to note that the national reform effort is being carried out collaboratively with the relevant government departments, agencies and the private sector.
“In order to ensure that we change South Africa’s ranking in the next Ease of Doing Business Index, we will all need to change.
“I am therefore extremely pleased that we have all agreed that we must become the change we want to see. We must push forward our agenda boldly and without reservation,” she said.
Williams said strong and productive partnerships between government, agencies, the private sector, unions and civil society are needed to move the country forward.
She said she is confident that things will get even better since some of the major areas that needs reforms have been highlighted such as Company Registration, Construction Permits, Paying Taxes and Registering Property.
Ease of doing business in SA
Also taking part in the webinar, was Commissioner Rory Voller from Companies and Intellectual Property Commission (CIPC), who said they are looking into measures that will further the ease of doing business in South Africa.
“We are constantly looking into ensuring that we ease measures of doing business in South Africa,” he said.
Voller said they are constantly engaging with all the relevant stakeholders.
The webinar, under the theme Ease of Doing Business: South Africa’s Global Competitiveness in Focus, highlighted the on-going successes of South Africa’s national reform efforts.
The index provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the sub-national and regional level.
By gathering and analysing comprehensive quantitative data to compare business regulation environments across economies and over time, doing business encourages economies to compete towards more efficient regulation as well as offering measurable benchmarks for reform. – SAnews.gov.za
