103367 Regional Profile 2016 Organization for the Harmonization of Business Law in Africa (OHADA) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 2 AFRICA (OHADA) © 2016 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 18 17 16 15 This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 3 AFRICA (OHADA) CONTENTS Introduction .................................................................................................................................. 4 The business environment .......................................................................................................... 5 Starting a business ..................................................................................................................... 14 Dealing with construction permits ........................................................................................... 25 Getting electricity ....................................................................................................................... 35 Registering property .................................................................................................................. 43 Getting credit .............................................................................................................................. 52 Protecting minority investors ................................................................................................... 60 Paying taxes ................................................................................................................................ 68 Trading across borders .............................................................................................................. 76 Enforcing contracts .................................................................................................................... 90 Resolving insolvency .................................................................................................................. 97 Distance to frontier and ease of doing business ranking .................................................... 102 Resources on the Doing Business website ............................................................................ 105 Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 4 AFRICA (OHADA) INTRODUCTION Doing Business sheds light on how easy or difficult it is globally for each indicator and data for the following for a local entrepreneur to open and run a small to comparator regions: Common Market for Eastern and medium-size business when complying with relevant Southern Africa (COMESA), East Asia and the Pacific regulations. It measures and tracks changes in (EAP), European Union (EU), Latin America and Southern regulations affecting 11 areas in the life cycle of a African Development Community (SADC).. The data in business: starting a business, dealing with construction this report are current as of June 1, 2015 (except for the permits, getting electricity, registering property, getting paying taxes indicators, which cover the period January– credit, protecting minority investors, paying taxes, December 2014). trading across borders, enforcing contracts, resolving The Doing Business methodology has limitations. Other insolvency and labor market regulation. Doing Business areas important to business—such as an economy’s 2016 presents the data for the labor market regulation proximity to large markets, the quality of its indicators in an annex. The report does not present infrastructure services (other than those related to rankings of economies on labor market regulation trading across borders and getting electricity), the indicators or include the topic in the aggregate distance security of property from theft and looting, the to frontier score or ranking on the ease of doing transparency of government procurement, business. macroeconomic conditions or the underlying strength of In a series of annual reports Doing Business presents institutions—are not directly studied by Doing Business. quantitative indicators on business regulations and the The indicators refer to a specific type of business, protection of property rights that can be compared generally a local limited liability company operating in across 189 economies, from Afghanistan to Zimbabwe, the largest business city. Because standard assumptions over time. The data set covers 47 economies in Sub- are used in the data collection, comparisons and Saharan Africa, 32 in Latin America and the Caribbean, 25 benchmarks are valid across economies. The data not in East Asia and the Pacific, 25 in Eastern Europe and only highlight the extent of obstacles to doing business; Central Asia, 20 in the Middle East and North Africa and they also help identify the source of those obstacles, 8 in South Asia, as well as 32 OECD high-income supporting policy makers in designing regulatory reform. economies. The indicators are used to analyze economic More information is available in the full report. Doing outcomes and identify what reforms have worked, where Business 2016 presents the indicators, analyzes their and why. relationship with economic outcomes and recommends This regional profile presents the Doing Business regulatory reforms. The data, along with information on indicators for economies in Organization for the ordering the Doing Business 2016 report, are available on Harmonization of Business Law in Africa (OHADA). It the Doing Business website at also shows the regional average, the best performance http://www.doingbusiness.org. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 5 AFRICA (OHADA) THE BUSINESS ENVIRONMENT CHANGES IN DOING BUSINESS 2016 As part of a two-year update in methodology, Doing The case study underlying the trading across borders Business 2016 expands the focus of five indicator sets indicators has been changed to increase its relevance. (dealing with construction permits, getting electricity, For each economy the export product and partner are registering property, enforcing contracts and labor now determined on the basis of the economy’s market regulation), substantially revises the comparative advantage, the import product is auto parts, methodology for one indicator set (trading across and the import partner is selected on the basis of which borders) and implements small updates to the economy has the highest trade value in that product. The methodology for another (protecting minority investors). indicators continue to measure the time and cost to export and import. The indicators on dealing with construction permits now include an index of the quality of building regulation and Beyond these changes there is one other update in its implementation. The getting electricity indicators now methodology, for the protecting minority investors include a measure of the price of electricity consumption indicators. A few points for the extent of shareholder and an index of the reliability of electricity supply and governance index have been fine-tuned, and the index transparency of tariffs. Starting this year, the registering now also measures aspects of the regulations applicable property indicators include an index of the quality of the to limited companies rather than privately held joint land administration system in each economy in addition stock companies. to the indicators on the number of procedures and the For more details on the changes, see the “What is time and cost to transfer property. And for enforcing changing in Doing Business?” chapter starting on page contracts an index of the quality and efficiency of judicial 27 of the Doing Business 2016 report. For more details processes has been added while the indicator on the on the data and methodology, please see the “Data number of procedures to enforce a contract has been Notes” chapter starting on page 119 of the Doing dropped. Business 2016 report. For more details on the distance to The scope of the labor market regulation indicator set frontier metric, please see the “Distance to frontier and has also been expanded, to include more areas capturing ease of doing business ranking” chapter in this profile. aspects of job quality. The labor market regulation indicators continue to be excluded from the aggregate distance to frontier score and ranking on the ease of doing business. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 6 AFRICA (OHADA) THE BUSINESS ENVIRONMENT For policy makers trying to improve their economy’s permits, getting electricity, registering property, regulatory environment for business, a good place to getting credit, protecting minority investors, paying start is to find out how it compares with the regulatory taxes, trading across borders, enforcing contracts environment in other economies. Doing Business and resolving insolvency. The labor market provides an aggregate ranking on the ease of doing regulation indicators are not included in this year’s business based on indicator sets that measure and aggregate ease of doing business ranking, but the benchmark regulations applying to domestic small to data are presented in the economy profile. medium-size businesses through their life cycle. The ease of doing business ranking compares Economies are ranked from 1 to 189 by the ease of economies with one another; the distance to frontier doing business ranking. Doing Business presents results score benchmarks economies with respect to for 2 aggregate measures: the distance to frontier score regulatory best practice, showing the absolute and the ease of doing business ranking. The ranking of distance to the best performance on each Doing economies is determined by sorting the aggregate Business indicator. When compared across years, the distance to frontier scores, rounded to two decimals. An distance to frontier score shows how much the economy’s distance to frontier score is indicated on a regulatory environment for local entrepreneurs in an scale from 0 to 100, where 0 represents the worst economy has changed over time in absolute terms, performance and 100 the frontier. (See the chapter on while the ease of doing business ranking can show the distance to frontier and ease of doing business). only how much the regulatory environment has The 10 topics included in the ranking in Doing Business changed relative to that in other economies. 2016: starting a business, dealing with construction Figure 1.1 Where economies stand in the global ranking on the ease of doing business Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 7 AFRICA (OHADA) THE BUSINESS ENVIRONMENT For policy makers, knowing where their economy stands in regional average (figure 1.2). Another perspective is the aggregate ranking on the ease of doing business is provided by the regional average rankings on the topics useful. Also useful is to know how it ranks compared with included in the ease of doing business ranking (figure 1.3) other economies in the region and compared with the and the distance to frontier scores (figures 1.4 and 1.5). Figure 1.2 How economies in Organization for the Harmonization of Business Law in Africa (OHADA) rank on the ease of doing business Note: The rankings are benchmarked to June 2015 and based on the average of each economy’s distance to frontier (DTF) scores for the 10 topics included in this year’s aggregate ranking. The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier. For the economies for which the data cover 2 cities, scores are a population- weighted average for the 2 cities. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 8 AFRICA (OHADA) THE BUSINESS ENVIRONMENT Figure 1.3 Rankings on Doing Business topics - Organization for the Harmonization of Business Law in Africa (OHADA) (Scale: Rank 189 center, Rank 1 outer edge) Regional average ranking Source: Doing Business database. Figure 1.4 Distance to frontier scores on Doing Business topics - Organization for the Harmonization of Business Law in Africa (OHADA) (Scale: Score 0 center, Score 100 outer edge) Note: The rankings are benchmarked to June 2015 and based on the average of each economy’s distance to frontier (DTF) scores for the 10 topics included in this year’s aggregate ranking. The distance to frontier score benchmarks economies with respec t to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier. For the economies for which the data cover 2 cities, scores are a population-weighted average for the 2 cities. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 9 AFRICA (OHADA) Figure 1.5 How far has Organization for the Harmonization of Business Law in Africa (OHADA) come in the areas measured by Doing Business? Source: Doing Business database. Note: The distance to frontier score shows how far on average an economy is from the best performance achieved by any economy on each Doing Business indicator. Starting a business is comparable to 2010. Getting credit, protecting minority investors, paying taxes and resolving insolvency had methodology changes in 2014 and thus are only comparable to 2013. Dealing with construction permits, registering property, trading across borders, enforcing contracts and getting electricity had methodology changes in 2015 and thus are only comparable to 2014. The measure is normalized to range between 0 and 100, with 100 representing the best performance (the frontier). See the data notes starting on page 119 of the Doing Business 2016 report for more details on the distance to frontier score. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 10 AFRICA (OHADA) THE BUSINESS ENVIRONMENT Just as the overall ranking on the ease of doing business The absolute values of the indicators tell another part of tells only part of the story, so do changes in that ranking. the story (table 1.1). Policy makers can learn much by Yearly movements in rankings can provide some comparing the indicators for their economy with those indication of changes in an economy’s regulatory for the lowest- and highest-scoring economies in the environment for firms, but they are always relative. An region as well as those for the best performers globally. economy’s ranking might change because of These comparisons may reveal unexpected strengths in developments in other economies. An economy that an area of business regulation—such as a regulatory implemented business regulation reforms may fail to rise process that can be completed with a small number of in the rankings (or may even drop) if it is passed by procedures in a few days and at a low cost. others whose business regulation reforms had a more significant impact as measured by Doing Business. Table 1.1 Summary of Doing Business indicators for Organization for the Harmonization of Business Law in Africa (OHADA) Lowest regional Best regional Best global Indicator Regional average performance performance performance Starting a Business 189 (Central African 46 (Côte d'Ivoire) 138 1 (New Zealand) (rank) Republic) Starting a Business 31.36 (Central African 91.44 (Côte d'Ivoire) 69.80 99.96 (New Zealand) (DTF Score) Republic) Procedures (number) 18.0 (Equatorial Guinea) 3.0 (Burkina Faso) 7.3 1.0 (New Zealand*) 135.0 (Equatorial Time (days) 6.0 (Senegal) 26.4 0.5 (New Zealand) Guinea) Cost (% of income per 204.0 (Central African 15.1 (Gabon) 71.3 0.0 (Slovenia) capita) Republic) Paid-in min. capital (% 540.1 (Central African 3.2 (Côte d'Ivoire) 105.3 0.0 (105 Economies*) of income per capita) Republic) Dealing with Construction Permits 180 (Côte d'Ivoire) 76 (Burkina Faso) 145 1 (Singapore) (rank) Dealing with Construction Permits 42.72 (Côte d'Ivoire) 70.87 (Burkina Faso) 57.20 92.97 (Singapore) (DTF Score) Procedures (number) 27.0 (Guinea) 10.0 (Comoros*) 14.1 7.0 (5 Economies*) Time (days) 347.0 (Côte d'Ivoire) 88.0 (Benin) 171.8 26.0 (Singapore) Cost (% of warehouse 16.1 (Niger) 0.9 (Côte d'Ivoire) 7.0 0.0 (Qatar) value) Building quality control 1.0 (Equatorial Guinea) 11.5 (Chad) 6.3 15.0 (New Zealand) index (0-15) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 11 AFRICA (OHADA) Lowest regional Best regional Best global Indicator Regional average performance performance performance Getting Electricity 186 (Central African 109 (Togo) 159 1 (Korea, Rep.) (rank) Republic) Getting Electricity 24.64 (Central African 63.18 (Togo) 43.04 99.88 (Korea, Rep.) (DTF Score) Republic) Procedures (number) 8.0 (Côte d'Ivoire) 3.0 (Togo*) 5.3 3.0 (14 Economies*) Time (days) 455.0 (Guinea-Bissau) 51.0 (Togo) 116.9 18.0 (Korea, Rep.*) Cost (% of income per 15,326.1 (Central African 616.7 (Equatorial 6,193.0 0.0 (Japan) capita) Republic) Guinea) Reliability of supply and transparency of 0.0 (12 Economies*) 3.0 (Togo*) 0.7 8.0 (18 Economies*) tariff index (0-8) Registering Property 182 (Togo) 109 (Côte d'Ivoire) 152 1 (New Zealand) (rank) Registering Property 30.93 (Togo) 58.12 (Côte d'Ivoire) 45.95 94.46 (New Zealand) (DTF Score) Procedures (number) 8.0 (Guinea-Bissau) 4.0 (4 Economies*) 5.4 1.0 (4 Economies*) Time (days) 288.0 (Togo) 23.0 (Equatorial Guinea) 70.3 1.0 (3 Economies*) Cost (% of property 18.9 (Cameroon) 5.6 (Guinea-Bissau) 10.8 0.0 (Saudi Arabia) value) Quality of the land 3.0 (Central African administration index 11.5 (Côte d'Ivoire) 6.6 28.5 (3 Economies*) Republic) (0-30) Getting Credit (rank) 133 (12 Economies*) 109 (4 Economies*) 127 1 (New Zealand) Getting Credit (DTF 30.00 (12 Economies*) 40.00 (4 Economies*) 32.65 100.00 (New Zealand) Score) Strength of legal rights 6.0 (17 Economies*) 6.0 (17 Economies*) 6.0 12.0 (3 Economies*) index (0-12) Depth of credit 0.0 (12 Economies*) 2.0 (4 Economies*) 0.5 8.0 (26 Economies*) information index (0-8) Credit registry 0.0 (Guinea) 52.0 (Gabon) 5.5 100.0 (Portugal) coverage (% of adults) Credit bureau coverage 0.0 (17 Economies*) 0.0 (17 Economies*) 0.0 100.0 (22 Economies*) (% of adults) Protecting Minority 174 (Congo, Dem. Rep.) 134 (Cameroon) 154 1 (3 Economies*) Investors (rank) Protecting Minority 33.33 (Congo, Dem. 43.33 (Cameroon) 38.63 83.33 (3 Economies*) Investors (DTF Score) Rep.) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 12 AFRICA (OHADA) Lowest regional Best regional Best global Indicator Regional average performance performance performance Strength of minority investor protection 3.3 (Congo, Dem. Rep.) 4.3 (Cameroon) 3.9 8.3 (3 Economies*) index (0-10) Extent of conflict of interest regulation 3.0 (Congo, Dem. Rep.) 5.0 (Cameroon) 4.3 9.3 (Singapore*) index (0-10) Extent of shareholder governance index (0- 3.0 (5 Economies*) 3.7 (12 Economies*) 3.5 8.0 (4 Economies*) 10) 1 (United Arab Paying Taxes (rank) 186 (Chad) 149 (Mali) 171 Emirates*) Paying Taxes (DTF 99.44 (United Arab 19.54 (Chad) 60.16 (Mali) 42.68 Score) Emirates*) Payments (number per 3.0 (Hong Kong SAR, 63.0 (Côte d'Ivoire) 26.0 (Gabon) 47.8 year) China*) Time (hours per year) 732.0 (Chad) 100.0 (Comoros) 397.7 55.0 (Luxembourg) Total tax rate (% of 216.5 (Comoros) 41.3 (Burkina Faso) 62.8 25.9 (Ireland) profit) Trading Across 187 (Congo, Dem. Rep.) 80 (Comoros) 143 1 (16 Economies*) Borders (rank) Trading Across 1.26 (Congo, Dem. Rep.) 75.30 (Comoros) 46.46 100.00 (16 Economies*) Borders (DTF Score) Time to export: Border 515 (Congo, Dem. Rep.) 26 (Togo) 130 0 (15 Economies*) compliance (hours) Cost to export: Border 1,975 (Congo, Rep.) 17 (Mali) 639 0 (18 Economies*) compliance (USD) Time to export: Documentary 698 (Congo, Dem. Rep.) 15 (Togo) 114 0 (Jordan) compliance (hours) Cost to export: 2,500 (Congo, Dem. Documentary 25 (Togo) 289 0 (20 Economies*) Rep.) compliance (USD) Time to import: Border 588 (Congo, Dem. Rep.) 56 (Senegal) 177 0 (19 Economies*) compliance (hours) Cost to import: Border 2,089 (Congo, Dem. 265 (Burkina Faso) 797 0 (28 Economies*) compliance (USD) Rep.) Time to import: Documentary 338 (Chad) 29 (Comoros) 143 1 (21 Economies*) compliance (hours) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 13 AFRICA (OHADA) Lowest regional Best regional Best global Indicator Regional average performance performance performance Cost to import: Documentary 875 (Congo, Dem. Rep.) 38 (Comoros) 413 0 (30 Economies*) compliance (USD) Enforcing Contracts 179 (Comoros) 108 (Equatorial Guinea) 152 1 (Singapore) (rank) Enforcing Contracts 55.25 (Equatorial 32.05 (Comoros) 43.26 84.91 (Singapore) (DTF Score) Guinea) Time (days) 1,715.0 (Guinea-Bissau) 311.0 (Guinea) 680.2 150.0 (Singapore) Cost (% of claim) 89.4 (Comoros) 19.5 (Equatorial Guinea) 52.8 9.0 (Iceland) Quality of judicial 3.0 (Equatorial Guinea) 8.0 (Guinea-Bissau*) 6.0 15.5 (3 Economies*) processes index (0-18) Resolving Insolvency 189 (Comoros) 76 (Côte d'Ivoire) 130 1 (Finland) (rank) Resolving Insolvency 0.00 (Comoros) 47.03 (Côte d'Ivoire) 28.95 93.81 (Finland) (DTF Score) Recovery rate (cents on 0.0 (6 Economies*) 35.1 (Côte d'Ivoire) 13.8 92.9 (Japan) the dollar) Time (years) 5.0 (Gabon*) 2.2 (Côte d'Ivoire) 3.7 0.4 (Ireland) 76.0 (Central African Cost (% of estate) 8.0 (Guinea) 26.8 1.0 (Norway) Republic) Strength of insolvency 9.0 (13 Economies*) 9.0 (13 Economies*) 6.9 15.0 (4 Economies*) framework index (0-16) * Two or more economies share the top ranking on this indicator. A number shown in place of an economy’s name indicates the number of economies that share the top ranking on the indicator. For a list of these economies, see the Doing Business website (http://www.doingbusiness.org). Note: The global best performer on time for paying taxes is defined as the lowest time recorded among all economies in the DB2016 sample that levy the 3 major taxes: profit tax, labor taxes and mandatory contributions, and VAT or sales tax. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 14 AFRICA (OHADA) STARTING A BUSINESS WHAT THE STARTING A BUSINESS Formal registration of companies has many INDICATORS MEASURE immediate benefits for the companies and for business owners and employees. Legal entities can Procedures to legally start and operate a outlive their founders. Resources are pooled as company (number) several shareholders join forces to start a company. Formally registered companies have access to Preregistration (for example, name services and institutions from courts to banks as well verification or reservation, notarization) as to new markets. And their employees can benefit Registration in the economy’s largest from protections provided by the law. An additional business city 1 benefit comes with limited liability companies. These Postregistration (for example, social security limit the financial liability of company owners to their registration, company seal) investments, so personal assets of the owners are not put at risk. Where governments make registration Time required to complete each procedure easy, more entrepreneurs start businesses in the (calendar days) formal sector, creating more good jobs and Does not include time spent gathering generating more revenue for the government. information What do the indicators cover? Each procedure starts on a separate day (2 procedures cannot start on the same day). Doing Business measures the ease of starting a Procedures that can be fully completed business in an economy by recording all procedures online are recorded as ½ day. officially required or commonly done in practice by an entrepreneur to start up and formally operate an Procedure completed once final document is industrial or commercial business—as well as the received time and cost required to complete these procedures. No prior contact with officials It also records the paid-in minimum capital that Cost required to complete each procedure companies must deposit before registration (or (% of income per capita) within 3 months). The ranking of economies on the ease of starting a business is determined by sorting Official costs only, no bribes their distance to frontier scores for starting a No professional fees unless services required business. These scores are the simple average of the by law distance to frontier scores for each of the component indicators. Paid-in minimum capital (% of income per capita) To make the data comparable across economies, Doing Business uses several assumptions about the Deposited in a bank or with a notary before business and the procedures. It assumes that all registration (or within 3 months) information is readily available to the entrepreneur  Conducts general commercial or industrial and that there has been no prior contact with activities. officials. It also assumes that the entrepreneur will pay no bribes. And it assumes that the business:  Has a start-up capital of 10 times income per capita.  Is a limited liability company, located in the largest business city , is 100% domestically 1  Has a turnover of at least 100 times income per owned with between 10 and 50 employees. capita.  Does not qualify for any special benefits.  Does not own real estate. For the 11 economies with a population of more than 100 million, data for a second city have been added. 1 Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 15 AFRICA (OHADA) STARTING A BUSINESS Where do the region’s economies stand today? How easy is it for entrepreneurs in economies in suggest an answer (figure 2.1). The average ranking of Organization for the Harmonization of Business Law in the region and comparator regions provide a useful Africa (OHADA) to start a business? The global rankings benchmark. of these economies on the ease of starting a business Figure 2.1 How economies in Organization for the Harmonization of Business Law in Africa (OHADA) rank on the ease of starting a business Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 16 AFRICA (OHADA) STARTING A BUSINESS The indicators underlying the rankings may be more and the paid-in minimum capital requirement (figure revealing. Data collected by Doing Business show what 2.2). Comparing these indicators across the region and it takes to start a business in each economy in the with averages both for the region and for comparator region: the number of procedures, the time, the cost regions can provide useful insights. Figure 2.2 What it takes to start a business in economies in Organization for the Harmonization of Business Law in Africa (OHADA) Procedures (number) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 17 AFRICA (OHADA) STARTING A BUSINESS Time (days) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 18 AFRICA (OHADA) STARTING A BUSINESS Cost (% of income per capita) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 19 AFRICA (OHADA) STARTING A BUSINESS Paid-in minimum capital (% of income per capita) Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 20 AFRICA (OHADA) STARTING A BUSINESS What are the changes over time? Economies around the world have taken steps making it and savings and more registered businesses, financial easier to start a business—streamlining procedures by resources and job opportunities. setting up a one-stop shop, making procedures simpler What business registration reforms has Doing Business or faster by introducing technology, and reducing or recorded in Organization for the Harmonization of eliminating minimum capital requirements. Many have Business Law in Africa (OHADA) (table 2.1)? undertaken business registration reforms in stages—and often as part of a larger regulatory reform program. Among the benefits have been greater firm satisfaction Table 2.1 How have economies in Organization for the Harmonization of Business Law in Africa (OHADA) made starting a business easier—or not? By Doing Business report year DB2011 to DB2016 DB year Economy Reform Benin made starting a business less costly by reducing the DB2016 Benin fees for filing company documents at the one-stop shop. Burkina Faso made starting a business easier by reducing the DB2016 Burkina Faso minimum capital requirement. The Comoros made starting a business easier by reducing the DB2016 Comoros minimum capital requirement. Gabon made starting a business easier by reducing the paid- DB2016 Gabon in minimum capital requirement. Guinea made starting a business easier by reducing the DB2016 Guinea minimum capital requirement. Niger made starting a business easier by reducing the DB2016 Niger minimum capital requirement. Senegal made starting a business easier by reducing the DB2016 Senegal minimum capital requirement. Togo made starting a business less costly by reducing the DB2016 Togo fees to register with the tax authority. The Democratic Republic of Congo made starting a business DB2016 Congo, Dem. Rep. easier by simplifying registration procedures and reducing the minimum capital requirement. Benin made starting a business easier by reducing the DB2015 Benin minimum capital requirement and the fees to be paid at the one-stop shop. Côte d’Ivoire made starting a business easier by reducing the DB2015 Côte d'Ivoire minimum capital requirement, lowering registration fees and enabling the one-stop shop to publish notices of Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 21 AFRICA (OHADA) DB year Economy Reform incorporation. Senegal made starting a business easier by reducing the DB2015 Senegal minimum capital requirement. Togo made starting a business easier by enabling the one- DB2015 Togo stop shop to publish notices of incorporation and eliminating the requirement to obtain an economic operator card. The Democratic Republic of Congo made starting a business DB2015 Congo, Dem. Rep. easier by creating a one-stop shop. Benin made starting a business easier by creating a one-stop DB2014 Benin shop. Côte d’Ivoire made starting a business easier by creating a one-stop shop, reducing the notary fees and replacing the DB2014 Côte d'Ivoire requirement for a copy of the founders’ criminal records with one for a sworn declaration at the time of company registration. The Republic of Congo made starting a business easier by DB2014 Congo, Rep. reducing the registration costs and eliminating the merchant card. The Comoros made starting a business easier by eliminating DB2014 Comoros the requirement to deposit the minimum capital in a bank before incorporation. Gabon made starting a business easier by replacing the DB2014 Gabon requirement for a copy of the founders’ criminal records with one for a sworn declaration. Guinea made starting a business easier by enabling the one- DB2014 Guinea stop shop to publish incorporation notices and by reducing the notary fees. Mali made starting a business more difficult by ceasing to DB2014 Mali regularly publish the incorporation notices of new companies on the official website of the one-stop shop. Niger made starting a business easier by replacing the requirement for a copy of the founders’ criminal records with DB2014 Niger one for a sworn declaration at the time of company registration. Togo made starting a business easier by reducing the time DB2014 Togo required to register at the one-stop shop and by reducing registration costs. The Democratic Republic of Congo made starting a business more complicated by increasing the minimum capital requirement. At the same time, it made the process easier by DB2014 Congo, Dem. Rep. reducing the time and by eliminating the requirement to obtain a certificate confirming the location of the new company’s headquarters. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 22 AFRICA (OHADA) DB year Economy Reform Benin made starting a business easier by appointing a DB2013 Benin representative of the commercial registry at the one-stop shop and reducing some fees. Chad made starting a business easier by setting up a one- DB2013 Chad stop shop. The Comoros made starting a business easier and less costly by replacing the requirement for a copy of the founders’ DB2013 Comoros criminal records with one for a sworn declaration at the time of the company’s registration and by reducing the fees to incorporate a company. The Democratic Republic of Congo made starting a business DB2013 Congo, Dem. Rep. easier by appointing additional public notaries. The Republic of Congo made starting a business easier by DB2013 Congo, Rep. eliminating or reducing several administrative costs associated with incorporation. Guinea made starting a business easier by setting up a one- stop shop for company incorporation and by replacing the DB2013 Guinea requirement for a copy of the founders’ criminal records with one for a sworn declaration at the time of the company’s registration Togo made starting a business easier and less costly by reducing incorporation fees, improving the work flow at the one-stop shop for company registration and replacing the DB2013 Togo requirement for a copy of the founders’ criminal records with one for a sworn declaration at the time of the company’s registration. Guinea-Bissau made starting a business easier by establishing a one-stop shop, eliminating the requirement for an DB2012 Guinea-Bissau operating license and simplifying the method for providing criminal records and publishing the registration notice. Mali made starting a business easier by adding to the services DB2012 Mali provided by the one-stop shop. Senegal made starting a business easier by replacing the requirement for a copy of the founders’ cri minal records with DB2012 Senegal one for a sworn declaration at the time of the company’s registration. Côte d’Ivoire made starting a business easier by reorganizing DB2012 Côte d'Ivoire the court clerk’s office where entrepreneurs file their company documents. The Democratic Republic of Congo made business start-up DB2012 Congo, Dem. Rep. faster by reducing the time required to complete company registration and obtain a national identification number. Comoros made the process of starting a business more DB2012 Comoros difficult by increasing the minimum capital requirement. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 23 AFRICA (OHADA) DB year Economy Reform Burkina Faso made starting a business easier by replacing the requirement for a copy of the founders’ criminal records with DB2012 Burkina Faso one for a sworn declaration at the time of the company’s registration. Cameroon made starting a business easier by replacing the requirement for a copy of the founders’ criminal records with DB2012 Cameroon one for a sworn declaration at the time of the company’s registration, and by reducing publication fees. The Central African Republic made starting a business easier by reducing business registration fees and by replacing the DB2012 Central African Republic requirement for a copy of the founders’ criminal records with one for a sworn declaration at the time of the company’s registration. Chad made starting a business easier by eliminating the requirement for a medical certificate and by replacing the DB2012 Chad requirement for a copy of the founders’ criminal records with one for a sworn declaration at the time of the company’s registration. Benin made starting a business easier by replacing the DB2012 Benin requirement for a copy of the founders’ criminal records with one for a sworn declaration at the time of the company’s The Democratic Republic of Congo eased business start-up DB2011 Congo, Dem. Rep. by eliminating procedures, including the company seal. Cameroon made starting a business easier by establishing a DB2011 Cameroon new one-stop shop and abolishing the requirement for verifying business premises and its corresponding fees. The Central African Republic simplified business start-up by DB2010 Central African Republic establishing a one-stop shop (Guichet Unique de Formalité des Entreprises), which merged several procedures into one. Cameroon made starting a business easier by exempting DB2010 Cameroon newly formed companies from paying the business license tax for their first 2 years of existence. Burkina Faso made starting a business easier by allowing online publication of the articles of incorporation directly on DB2010 Burkina Faso the website of the one-stop shop, by reducing registration fees and by streamlining tax registration. Togo made starting a business easier and less costly by DB2010 Togo setting up a one-stop shop and thereby making it possible to consolidate several procedures. Niger made starting a business easier by eliminating the procedures to register with the Conseil Nigérien des DB2010 Niger Utilisateurs des Transports Publics (CNUT) and with the chamber of commerce. Mali made starting a business easier by creating a one-stop DB2010 Mali shop where all registration procedures can be completed, Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 24 AFRICA (OHADA) DB year Economy Reform including registering a company with the registrar and tax agency, applying for online publication and obtaining a national identification number. Guinea-Bissau simplified business start-up by making the DB2010 Guinea-Bissau company name search electronic, introducing some computers and flash drives and reducing the registration fees. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 25 AFRICA (OHADA) DEALING WITH CONSTRUCTION PERMITS Regulation of construction is critical to protect the WHAT THE DEALING WITH CONSTRUCTION public. But it needs to be efficient, to avoid excessive PERMITS INDICATORS MEASURE constraints on a sector that plays an important part in every economy. Where complying with building regulations is excessively costly in time and money, Procedures to legally build a warehouse (number) many builders opt out. They may pay bribes to pass inspections or simply build illegally, leading to Submitting all relevant documents and hazardous construction that puts public safety at risk. obtaining all necessary clearances, licenses, Where compliance is simple, straightforward and permits and certificates inexpensive, everyone is better off. Submitting all required notifications and receiving all necessary inspections What do the indicators cover? Obtaining utility connections for water and Doing Business records all procedures required for a sewerage business in the construction industry to build a warehouse along with the time and cost to complete Registering and selling the warehouse after its each procedure. In addition, this year Doing Business completion introduces a new measure, the building quality Time required to complete each procedure control index, evaluating the quality of building (calendar days) regulations, the strength of quality control and safety Does not include time spent gathering mechanisms, liability and insurance regimes, and information professional certification requirements. Each procedure starts on a separate day. The ranking of economies on the ease of dealing with Procedures that can be fully completed online construction permits is determined by sorting their are recorded as ½ day distance to frontier scores for dealing with construction permits. These scores are the simple Procedure considered completed once final document is received average of the distance to frontier scores for each of the component indicators. No prior contact with officials To make the data comparable across economies, Cost required to complete each procedure (% several assumptions about the construction of warehouse value) company, the warehouse project and the utility Official costs only, no bribes connections are used. Assumptions about the construction company Building quality control index (0-15) Sum of the scores of six component indices: The construction company (BuildCo): Quality of building regulations (0-2)  Is a limited liability company (or its legal equivalent). Quality control before construction (0-1)  Operates in the economy’s largest business Quality control during construction (0-3) city. For 11 economies the data are also Quality control after construction (0-3) collected for the second largest business city. Liability and insurance regimes (0-2)  Is 100% domestically and privately owned Professional certifications (0-4) with five owners, none of whom is a legal entity.  Is fully licensed and insured to carry out construction projects, such as building warehouses. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 26 AFRICA (OHADA) The construction company (BuildCo) (continued):  Has 60 builders and other employees, all of  Will be a new construction (there was no them nationals with the technical expertise previous construction on the land), with no and professional experience necessary to trees, natural water sources, natural reserves obtain construction permits and approvals. or historical monuments of any kind on the plot.  Has at least one employee who is a licensed architect or engineer and  Will have complete architectural and registered with the local association of technical plans prepared by a licensed architects or engineers. BuildCo is not architect. If preparation of the plans requires assumed to have any other employees who such steps as obtaining further are technical or licensed experts, such as documentation or getting prior approvals geological or topographical experts. from external agencies, these are counted as procedures.  Has paid all taxes and taken out all necessary insurance applicable to its  Will include all technical equipment required general business activity (for example, to be fully operational. accidental insurance for construction  Will take 30 weeks to construct (excluding all workers and third-person liability). delays due to administrative and regulatory  Owns the land on which the warehouse will requirements). be built and will sell the warehouse upon Assumptions about the utility connections its completion. The water and sewerage connections:  Is valued at 50 times income per capita. • Will be 150 meters (492 feet) from the Assumptions about the warehouse existing water source and sewer tap. If there is no water delivery infrastructure in the economy, a  The warehouse: borehole will be dug. If there is no sewerage  Will be used for general storage activities, infrastructure, a septic tank in the smallest size such as storage of books or stationery. The available will be installed or built. warehouse will not be used for any goods  Will not require water for fire protection requiring special conditions, such as food, reasons; a fire extinguishing system (dry chemicals or pharmaceuticals. system) will be used instead. If a wet fire  Will have two stories, both above ground, protection system is required by law, it is with a total constructed area of assumed that the water demand specified approximately 1,300.6 square meters below also covers the water needed for fire (14,000 square feet). Each floor will be 3 protection. meters (9 feet, 10 inches) high.  Will have an average water use of 662 liters  Will have road access and be located in the (175 gallons) a day and an average periurban area of the economy’s largest wastewater flow of 568 liters (150 gallons) a business city (that is, on the fringes of the day. Will have a peak water use of 1,325 liters city but still within its official limits). For 11 (350 gallons) a day and a peak wastewater economies the data are also collected for flow of 1,136 liters (300 gallons) a day. the second largest business city.  Will have a constant level of water demand • Will not be located in a special economic and wastewater flow throughout the year. or industrial zone. Will be located on a land  Will be 1 inch in diameter for the water plot of approximately 929 square meters connection and 4 inches in diameter for the (10,000 square feet) that is 100% owned by sewerage connection. BuildCo and is accurately registered in the cadastre and land registry. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 27 AFRICA (OHADA) DEALING WITH CONSTRUCTION PERMITS Where do the region’s economies stand today? How easy it is for entrepreneurs in economies in construction permits suggest an answer (figure 3.1). The Organization for the Harmonization of Business Law in average ranking of the region and comparator regions Africa (OHADA) to legally build a warehouse? The global provide a useful benchmark. rankings of these economies on the ease of dealing with Figure 3.1 How economies in Organization for the Harmonization of Business Law in Africa (OHADA) rank on the ease of dealing with construction permits Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 28 AFRICA (OHADA) DEALING WITH CONSTRUCTION PERMITS The indicators underlying the rankings may be more the time and the cost (figure 3.2). Comparing these revealing. Data collected by Doing Business show what it indicators across the region and with averages both for takes to comply with formalities to build a warehouse in the region and for comparator regions can provide each economy in the region: the number of procedures, useful insights. Figure 3.2 What it takes to comply with formalities to build a warehouse in economies in Organization for the Harmonization of Business Law in Africa (OHADA) Procedures (number) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 29 AFRICA (OHADA) DEALING WITH CONSTRUCTION PERMITS Time (days) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 30 AFRICA (OHADA) DEALING WITH CONSTRUCTION PERMITS Cost (% of warehouse value) * Indicates a “no practice” mark. If an economy has no laws or regulations covering a specific area—for example, insolvency—it receives a “no practice” mark. Similarly, an economy receives a “no practice” or “not possible” mark if regulation exists but is never used in practice or if a competing regulation prohibits such practice. Either way, a “no practice” mark puts the economy at the bottom of the ranking on the relevant indicator. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 31 AFRICA (OHADA) DEALING WITH CONSTRUCTION PERMITS Building Quality Control Index (0-15) * Indicates a “no practice” mark. If an economy has no laws or regulations covering a specific area—for example, insolvency—it receives a “no practice” mark. Similarly, an economy receives a “no practice” or “not possible” mark if regulation exists but is never used in practice or if a competing regulation prohibits such practice. Either way, a “no practice” mark puts the economy at the bottom of the ranking on the relevant indicator. Note: The index ranges from 0 to 15, with higher values indicating better quality control and safety mechanisms in the construction permitting system. The indicator is based on the same case study assumptions as the measures of efficiency. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 32 AFRICA (OHADA) DEALING WITH CONSTRUCTION PERMITS What are the changes over time? Smart regulation ensures that standards are met while requirements. What construction permitting reforms has making compliance easy and accessible to all. Coherent Doing Business recorded in Organization for the and transparent rules, efficient processes and adequate Harmonization of Business Law in Africa (OHADA) (table allocation of resources are especially important in sectors 3.1)? where safety is at stake. Construction is one of them. In an effort to ensure building safety while keeping compliance costs reasonable, governments around the world have worked on consolidating permitting Table 3.1 How have economies in Organization for the Harmonization of Business Law in Africa (OHADA) made dealing with construction permits easier—or not? By Doing Business report year DB2011 to DB2016 DB year Economy Reform Benin made dealing with construction permits less time- DB2016 Benin consuming by establishing a one-stop shop and by reducing the number of signatories required on building permits. Gabon made dealing with construction permits more DB2016 Gabon complicated by increasing the time required for obtaining a building permit. Niger made dealing with construction permits easier by DB2016 Niger reducing the time required for companies to obtain a water connection. The Democratic Republic of Congo made dealing with DB2016 Congo, Dem. Rep. construction permits less expensive by halving the cost to obtain a building permit. Mali made dealing with construction permits easier by DB2015 Mali reducing the time needed to obtain a geotechnical study. Senegal made dealing with construction permits less time- DB2015 Senegal consuming by reducing the time for processing building permit applications. The Democratic Republic of Congo made dealing with DB2015 Congo, Dem. Rep. construction permits more costly by increasing the building permit fee. Côte d’Ivoire reduced the time required for obtaining a DB2014 Côte d'Ivoire building permit by streamlining procedures at the onestop shop (Service du Guichet Unique du Foncier et de l’Habitat). Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 33 AFRICA (OHADA) DB year Economy Reform Cameroon made dealing with construction permits more complex by introducing notification and inspection requirements. At the same time, DB2014 Cameroon Cameroon made it easier by decentralizing the process for obtaining a building permit and by introducing strict time limits for processing the application and issuing the certificate of conformity. Gabon made dealing with construction permits easier by reducing the time required to obtain a building permit and DB2014 Gabon by eliminating the requirement for an on-site inspection before construction starts. Togo made dealing with construction permits easier by DB2014 Togo improving internal operations at the City Hall of Lomé. Benin reduced the time required to obtain a construction DB2013 Benin permit by speeding up the processing of applications. The Central African Republic made obtaining a construction DB2013 Central African Republic permit more costly. The Republic of Congo made dealing with construction DB2013 Congo, Rep. permits less expensive by reducing the cost of registering a new building at the land registry. Guinea made obtaining a building permit less expensive by DB2013 Guinea clarifying the method for calculating the cost. The Democratic Republic of Congo reduced the DB2012 Congo, Dem. Rep. administrative costs of obtaining a construction permit. Senegal made obtaining a building permit more expensive DB2012 Senegal by increasing the cost. Burkina Faso made dealing with construction permits less DB2012 Burkina Faso costly by reducing the fees to obtain a fire safety study. Burkina Faso made dealing with construction permits easier DB2011 Burkina Faso by cutting the cost of the soil survey in half and the time to process a building permit application by a third. Côte d’Ivoire eased construction permitting by eliminating DB2011 Côte d'Ivoire the need to obtain a preliminary approval. DB2011 Guinea Guinea increased the cost of obtaining a building permit. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 34 AFRICA (OHADA) DB year Economy Reform Dealing with construction permits became easier in the Democratic Republic of Congo thanks to a reduction in the DB2011 Congo, Dem. Rep. cost of a building permit from 1% of the estimated construction cost to 0.6% and a time limit for issuing building permits. Benin created a new municipal commission to streamline DB2011 Benin construction permitting and set up an ad hoc commission to deal with the backlog in permit applications. Mali eased construction permitting by implementing a DB2011 Mali simplified environmental impact assessment for noncomplex commercial buildings. Mali made dealing with construction permits easier by DB2010 Mali speeding up the process for obtaining a water connection. Burkina Faso made dealing with construction permits easier DB2010 Burkina Faso by establishing a one-stop shop for processing building permits in Ouagadougou. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 35 AFRICA (OHADA) GETTING ELECTRICITY Access to reliable and affordable electricity is vital WHAT THE GETTING ELECTRICITY for businesses. To counter weak electricity supply, many firms in developing economies have to rely on INDICATORS MEASURE self-supply, often at a prohibitively high cost. Whether electricity is reliably available or not, the Procedures to obtain an electricity connection first step for a customer is always to gain access by (number) obtaining a connection. Submitting all relevant documents and What do the indicators cover? obtaining all necessary clearances and permits Doing Business records all procedures required for a Completing all required notifications and local business to obtain a permanent electricity receiving all necessary inspections connection and supply for a standardized Obtaining external installation works and warehouse, as well as the time and cost to complete possibly purchasing material for these works them. These procedures include applications and Concluding any necessary supply contract and contracts with electricity utilities, clearances from obtaining final supply other agencies and the external and final connection works. In addition, this year Doing Business adds Time required to complete each procedure two new measures: the reliability of supply and (calendar days) transparency of tariffs index (included in the Is at least 1 calendar day aggregate distance to frontier score and ranking on Each procedure starts on a separate day the ease of doing business) and the price of electricity (omitted from these aggregate measures). Does not include time spent gathering The ranking of economies on the ease of getting information electricity is determined by sorting their distance to Reflects the time spent in practice, with little frontier scores for getting electricity. These scores follow-up and no prior contact with officials are the simple average of the distance to frontier Cost required to complete each procedure (% scores for each of the component indicators. To of income per capita) make the data comparable across economies, several assumptions are used. Official costs only, no bribes Assumptions about the warehouse Excludes value added tax The reliability of supply and transparency of The warehouse: tariffs index  Is owned by a local entrepreneur. Sum of the scores of six component indices:  Is located in the economy’s largest business Duration and frequency of outages city. For 11 economies the data are also collected for the second largest business city. Tools to monitor power outages  Is located in an area where similar warehouses Tools to restore power supply are typically located. In this area a new Regulatory monitoring of utilities’ performance electricity connection is not eligible for a Financial deterrents aimed at limiting outages special investment promotion regime (offering special subsidization or faster service, for Transparency and accessibility of tariffs example), and located in an area with no Price of electricity (cents per kilowatt-hour)* physical constraints. For example, the property Price based on monthly bill for commercial is not near a railway. warehouse in case study  Is a new construction and is being connected *Price of electricity is not included in the calculation of to electricity for the first time. distance to frontier nor ease of doing business ranking Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 36 AFRICA (OHADA) The warehouse (continued):  Has two stories, both above ground, with Assumptions about the monthly consumption a total surface area of approximately  It is assumed that the warehouse operates 8 1,300.6 square meters (14,000 square hours a day for 30 days a month, with feet). The plot of land on which it is built equipment utilized at 80% of capacity on is 929 square meters (10,000 square feet). average, and that there are no electricity cuts  Is used for storage of goods. (assumed for simplicity). The subscribed capacity of the warehouse is 140 kVA, with a power factor of 1 (1 kVA = 1 kW). The monthly Assumptions about the electricity connection energy consumption is therefore 26,880 kWh, and the hourly consumption 112 kWh (26,880 The electricity connection: kWh/30 days/8 hours).  Is a permanent one.  If multiple electricity suppliers exist, the  Is a three-phase, four-wire Y, 140-kilovolt- warehouse is served by the cheapest supplier. ampere (kVA) (subscribed capacity) connection (where the voltage is 120/208  Tariffs effective in March of the current year are used for calculation of the price of V, the current would be 400 amperes; electricity for the warehouse. where it is 230/400 B, the current would be nearly 200 amperes).  Is 150 meters long. The connection is to either the low-voltage or the medium- voltage distribution network and either overhead or underground, whichever is more common in the area where the warehouse is located.  Requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other owners’ private property because the warehouse has access to a road.  Includes only a negligible length in the customer’s private domain.  Will supply monthly electricity consumption of 26,880 kilowatt-hours (kWh).  Does not involve work to install the internal electrical wiring. This has already been completed, up to and including the customer’s service panel or switchboard and installation of the meter base. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 37 AFRICA (OHADA) GETTING ELECTRICITY Where do the region’s economies stand today? How easy is it for entrepreneurs in economies in getting electricity suggest an answer (figure 4.1). The Organization for the Harmonization of Business Law in average ranking of the region and comparator regions Africa (OHADA) to connect a warehouse to electricity? provide a useful benchmark. The global rankings of these economies on the ease of Figure 4.1 How economies in Organization for the Harmonization of Business Law in Africa (OHADA) rank on the ease of getting electricity Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 38 AFRICA (OHADA) GETTING ELECTRICITY The indicators underlying the rankings may be more time and the cost (figure 4.2). Comparing these revealing. Data collected by Doing Business show what it indicators across the region and with averages both for takes to get a new electricity connection in each the region and for comparator regions can provide economy in the region: the number of procedures, the useful insights. Figure 4.2 What it takes to get an electricity connection in economies in Organization for the Harmonization of Business Law in Africa (OHADA) Procedures (number) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 39 AFRICA (OHADA) GETTING ELECTRICITY Time (days) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 40 AFRICA (OHADA) GETTING ELECTRICITY Cost (% of income per capita) Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 41 AFRICA (OHADA) GETTING ELECTRICITY Reliability of supply and transparency of tariff index (0-8) Source: Doing Business database. Note: The index ranges from 0 to 8, with higher values indicating greater reliability of electricity supply and greater transparency of tariffs. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 42 AFRICA (OHADA) GETTING ELECTRICITY What are the changes over time? Obtaining an electricity connection is essential to enable connection costs reasonable, governments around the a business to conduct its most basic operations. In many world have worked to consolidate requirements for economies the connection process is complicated by the obtaining an electricity connection. What reforms in multiple laws and regulations involved—covering service getting electricity has Doing Business recorded in quality, general safety, technical standards, procurement Organization for the Harmonization of Business Law in practices and internal wiring installations. In an effort to Africa (OHADA) (table 4.1)? ensure safety in the connection process while keeping Table 4.1 How have economies in Organization for the Harmonization of Business Law in Africa (OHADA) made getting electricity easier—or not? By Doing Business report year DB2011 to DB2016 DB year Economy Reform The utility in Senegal made getting an electricity connection less time-consuming by streamlining the review of applications and the process for the final connection as well DB2016 Senegal as by reducing the time needed to issue an excavation permit. It also made getting electricity less costly by reducing the security deposit. The utility in Togo reduced the time and procedures for getting an electricity connection through several initiatives, DB2016 Togo including by creating a single window enabling customers to pay all fees at once. In the Democratic Republic of Congo the utility in Kinshasa made getting electricity easier by reducing the number of DB2015 Congo, Dem. Rep. approvals required for new connections and reducing the burden of the security deposit. Guinea made getting electricity easier by simplifying the DB2013 Guinea process for connecting new customers to the distribution network. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 43 AFRICA (OHADA) REGISTERING PROPERTY Ensuring formal property rights is fundamental. WHAT THE REGISTERING PROPERTY Effective administration of land is part of that. If INDICATORS MEASURE formal property transfer is too costly or complicated, formal titles might go informal again. And where property is informal or poorly Procedures to legally transfer title on administered, it has little chance of being accepted immovable property (number) as collateral for loans—limiting access to finance. Preregistration (for example, checking for liens, notarizing sales agreement, paying property What do the indicators cover? transfer taxes) Doing Business records the full sequence of Registration in the economy’s largest business procedures necessary for a business to purchase city 2 property from another business and transfer the property title to the buyer’s name. The transaction is Postregistration (for example, filing title with the municipality) considered complete when it is opposable to third parties and when the buyer can use the property, Time required to complete each procedure use it as collateral for a bank loan or resell it. In (calendar days) addition, this year Doing Business adds a new Does not include time spent gathering measure to the set of registering property information indicators, an index of the quality of the land administration system in each economy. The Each procedure starts on a separate day. ranking of economies on the ease of registering Procedures that can be fully completed online are recorded as ½ day. property is determined by sorting their distance to frontier scores for registering property. These scores Procedure considered completed once final are the simple average of the distance to frontier document is received scores for each of the component indicators. To No prior contact with officials make the data comparable across economies, several assumptions about the parties to the Cost required to complete each procedure transaction, the property and the procedures are (% of property value) used. Official costs only, no bribes The parties (buyer and seller): No value added or capital gains taxes included  Are limited liability companies, 100% Quality of land administration index (0-30) domestically and privately owned and  Is located in a periurban commercial zone, and perform general commercial activities and no rezoning is required. are located in the economy’s largest business city .  Has no mortgages attached, has been under 2 the same ownership for the past 10 years.  Have 50 employees each, all of whom are nationals.  Consists of 557.4 square meters (6,000 square feet) of land and a 10-year-old, 2-story The property (fully owned by the seller): warehouse of 929 square meters (10,000  Has a value of 50 times income per capita. square feet). The warehouse is in good The sale price equals the value and entire condition and complies with all safety property will be transferred. standards, building codes and legal  Is registered in the land registry or cada- requirements. There is no heating system. stre, or both, and is free of title disputes. For the 11 economies with a population of more than 100 million, data for a second city have been added. 2 Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 44 AFRICA (OHADA) REGISTERING PROPERTY Where do the region’s economies stand today? How easy is it for entrepreneurs in economies in suggest an answer (figure 5.1). The average ranking of Organization for the Harmonization of Business Law in the region and comparator regions provide a useful Africa (OHADA) to transfer property? The global rankings benchmark. of these economies on the ease of registering property Figure 5.1 How economies in Organization for the Harmonization of Business Law in Africa (OHADA) rank on the ease of registering property Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 45 AFRICA (OHADA) REGISTERING PROPERTY The indicators underlying the rankings may be more time and the cost (figure 5.2). Comparing these revealing. Data collected by Doing Business show what indicators across the region and with averages both for it takes to complete a property transfer in each the region and for comparator regions can provide economy in the region: the number of procedures, the useful insights. Figure 5.2 What it takes to register property in economies in Organization for the Harmonization of Business Law in Africa (OHADA) Procedures (number) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 46 AFRICA (OHADA) REGISTERING PROPERTY Time (days) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 47 AFRICA (OHADA) REGISTERING PROPERTY Cost (% of property value) * Indicates a “no practice” mark. If an economy has no laws or regulations covering a specific area—for example, insolvency—it receives a “no practice” mark. Similarly, an economy receives a “no practice” or “not possible” mark if regulation exists but is never used in practice or if a competing regulation prohibits such practice. Either way, a “no practice” mark puts the economy at the bottom of the ranking on the relevant indicator. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 48 AFRICA (OHADA) REGISTERING PROPERTY Quality of Land Administration Index (0-30) * Indicates a “no practice” mark. If an economy has no laws or regulations covering a specific area—for example, insolvency—it receives a “no practice” mark. Similarly, an economy receives a “no practice” or “not possible” mark if regulation exists but is never used in practice or if a competing regulation prohibits such practice. Either way, a “no practice” mark puts the economy at the bottom of the ranking on the relevant indicator. Source: Doing Business database. Note: The index ranges from 0 to 30, with higher values indicating better quality of the land administration system. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 49 AFRICA (OHADA) REGISTERING PROPERTY What are the changes over time? Economies worldwide have been making it easier for buyers to use or mortgage their property earlier. What entrepreneurs to register and transfer property—such as property registration reforms has Doing Business by computerizing land registries, introducing time limits recorded in Organization for the Harmonization of for procedures and setting low fixed fees. Many have cut Business Law in Africa (OHADA) (table 5.1)? the time required substantially—enabling Table 5.1 How have economies in Organization for the Harmonization of Business Law in Africa (OHADA) made registering property easier—or not? By Doing Business report year DB2011 to DB2016 DB year Economy Reform Côte d’Ivoire made transferring property less costly by DB2016 Côte d'Ivoire lowering the property transfer tax rate. The Republic of Congo made transferring property less costly DB2016 Congo, Rep. by lowering the property transfer tax rate. Gabon made transferring property less costly by lowering the DB2016 Gabon property registration tax. Guinea-Bissau made transferring property easier by lowering DB2016 Guinea-Bissau the property registration tax. Senegal made transferring property less costly by lowering DB2016 Senegal the property transfer tax. Chad made transferring property less costly by lowering the DB2016 Chad property transfer tax. Côte d’Ivoire made transferring property easier by digitizing DB2015 Côte d'Ivoire its land registry system and lowering the property registration tax. Gabon made transferring property more costly by increasing DB2015 Gabon the property registration tax rate. Guinea made registering property easier by reorganizing the DB2015 Guinea records at the land registry and reducing the notary fees. DB2015 Senegal Senegal made it easier to transfer property by replacing the authorization from the tax authority with a notification and Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 50 AFRICA (OHADA) DB year Economy Reform setting up a single step at the land registry. Togo made transferring property easier by lowering the DB2015 Togo property registration tax rate. Côte d’Ivoire made transferring property easier by DB2014 Côte d'Ivoire streamlining procedures and reducing the property transfer tax. Guinea made transferring property easier by reducing the DB2014 Guinea property transfer tax. Guinea-Bissau made transferring property easier by DB2014 Guinea-Bissau increasing the number of notaries dealing with property transactions. Niger made transferring property easier by reducing the DB2014 Niger registration fees. Senegal made transferring property easier by reducing the DB2014 Senegal property transfer tax. Chad made transferring property easier by lowering the DB2014 Chad property transfer tax. The Comoros made it easier to transfer property by reducing DB2013 Comoros the property transfer tax. In Gabon registering property became more difficult because DB2013 Gabon of longer administrative delays at the land registry. The Central African Republic halved the cost of registering DB2012 Central African Republic property. The Republic of Congo made registering property more DB2012 Congo, Rep. expensive by reversing a previous law that reduced the registration fee. The Democratic Republic of Congo reduced by half the DB2011 Congo, Dem. Rep. property transfer tax to 3% of the property value. DB2011 Mali Mali eased property transfers by reducing the property Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 51 AFRICA (OHADA) DB year Economy Reform transfer tax for firms from 15% of the property value to 7%. Burkina Faso streamlined property registration by allowing the payment of transfer taxes at the land registry, reorganizing the land registry, setting statutory time limits for DB2010 Burkina Faso procedures and simplifying property valuation by government officials through the use of tables of values based on materials used. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 52 AFRICA (OHADA) GETTING CREDIT Two types of frameworks can facilitate access to WHAT THE GETTING CREDIT INDICATORS credit and improve its allocation: credit information MEASURE systems and borrowers and lenders in collateral and bankruptcy laws. Credit information systems enable lenders’ rights to view a potential borrower’s financial Strength of legal rights index (0–12) history (positive or negative)—valuable information to Rights of borrowers and lenders through consider when assessing risk. And they permit collateral laws borrowers to establish a good credit history that will Protection of secured creditors’ rights through allow easier access to credit. Sound collateral laws bankruptcy laws enable businesses to use their assets, especially movable property, as security to generate capital— Depth of credit information index (0–8) while strong creditors’ rights have been associated Scope and accessibility of credit information with higher ratios of private sector credit to GDP. distributed by credit bureaus and credit registries What do the indicators cover? Credit bureau coverage (% of adults) Doing Business assesses the sharing of credit information and the legal rights of borrowers and Number of individuals and firms listed in lenders with respect to secured transactions through largest credit bureau as percentage of adult 2 sets of indicators. The depth of credit information population index measures rules and practices affecting the Credit registry coverage (% of adults) coverage, scope and accessibility of credit Number of individuals and firms listed in information available through a credit registry or a credit registry as percentage of adult credit bureau. The strength of legal rights index population measures whether certain features that facilitate lending exist within the applicable collateral and bankruptcy laws. Doing Business uses two case scenarios, Case A and Case B, to determine the scope of the secured transactions system, involving a  Has up to 50 employees. secured borrower and a secured lender and  Is 100% domestically owned, as is the lender. examining legal restrictions on the use of movable The ranking of economies on the ease of getting collateral (for more details on each case, see the Data credit is determined by sorting their distance to Notes section of the Doing Business 2016 report). frontier scores for getting credit. These scores are These scenarios assume that the borrower: the distance to frontier score for the strength of  Is a private limited liability company. legal rights index and the depth of credit Has its headquarters and only base of information index. operations in the largest business city. For the 11 economies with a population of more than 100 million, data for a second city have been added. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 53 AFRICA (OHADA) GETTING CREDIT Where do the region’s economies stand today? How well do the credit information systems and rankings of these economies on the ease of getting collateral and bankruptcy laws in economies in credit suggest an answer (figure 6.1). The average Organization for the Harmonization of Business Law in ranking of the region and comparator regions provide a Africa (OHADA) facilitate access to credit? The global useful benchmark. Figure 6.1 How economies in Organization for the Harmonization of Business Law in Africa (OHADA) rank on the ease of getting credit Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 54 AFRICA (OHADA) GETTING CREDIT Another way to assess how well regulations and Harmonization of Business Law in Africa (OHADA) and institutions support lending and borrowing in the region comparators on the strength of legal rights index. Figure is to see where the region stands in the distribution of 6.3 shows the same thing for the depth of credit scores across regions. Figure 6.2 highlights the score on information index. the strength of legal rights index for Organization for the Figure 6.2 How strong are legal rights for borrowers and lenders? Region scores on strength of legal rights index Note: Higher scores indicate that collateral and bankruptcy laws are better designed to facilitate access to credit. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 55 AFRICA (OHADA) Figure 6.3 How much credit information is shared—and how widely? Region scores on depth of credit information index Note: Higher scores indicate the availability of more credit information, from either a credit registry or a credit bureau, to facilitate lending decisions. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 56 AFRICA (OHADA) GETTING CREDIT What are the changes over time? When economies strengthen the legal rights of lenders credit. What credit reforms has Doing Business recorded and borrowers under collateral and bankruptcy laws, and in Organization for the Harmonization of Business Law in increase the scope, coverage and accessibility of credit Africa (OHADA) (table 6.1)? information, they can increase entrepreneurs’ access to Table 6.1 How have economies in Organization for the Harmonization of Business Law in Africa (OHADA) made getting credit easier—or not? By Doing Business report year DB2011 to DB2016 DB year Economy Reform The Comoros improved access to credit information by DB2016 Comoros establishing a new credit registry. Mali improved its credit information system by introducing regulations that govern the licensing and functioning of DB2016 Mali credit bureaus in the member states of the West African Economic and Monetary Union (UEMOA). Niger improved its credit information system by introducing regulations that govern the licensing and functioning of DB2016 Niger credit bureaus in the member states of the West African Economic and Monetary Union (UEMOA). Côte d’Ivoire improved its credit information system by DB2015 Côte d'Ivoire introducing regulations that govern the licensing and operation of credit bureaus. Cameroon improved its credit information system by passing DB2015 Cameroon regulations that provide for the establishment and operation of a credit registry database. Senegal improved its credit information system by introducing regulations developed by the West African DB2015 Senegal Economic and Monetary Union that govern the licensing and operation of credit bureaus. The Democratic Republic of Congo improved access to credit DB2015 Congo, Dem. Rep. information by establishing a credit registry. The Democratic Republic of Congo strengthened its secured DB2014 Congo, Dem. Rep. transactions system by adopting the OHADA (Organization for the Harmonization of Business Law in Africa) Uniform Act on Secured Transactions. The new law broadens the range of Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 57 AFRICA (OHADA) DB year Economy Reform assets that can be used as collateral (including future assets) and the range of obligations that can be secured, extends security interests to the proceeds of the original asset and introduces the possibility of out-of-court enforcement. Access to credit in Benin was improved through amendments to the OHADA (Organization for the Harmonization of Business Law in Africa) Uniform Act on Secured Transactions DB2012 Benin that broaden the range of assets that can be used as collateral (including future assets), extend the security interest to the proceeds of the original asset and introduce the possibility of out-of-court enforcement. Access to credit in Burkina Faso was improved through amendments to the OHADA Uniform Act on Secured Transactions that broaden the range of assets that can be DB2012 Burkina Faso used as collateral (including future assets), extend the security interest to the proceeds of the original asset and introduce the possibility of out-of-court enforcement. Access to credit in Cameroon was improved through amendments to the OHADA Uniform Act on Secured Transactions that broaden the range of assets that can be DB2012 Cameroon used as collateral (including future assets), extend the security interest to the proceeds of the original asset and introduce the possibility of out-of-court enforcement. Access to credit in the Central African Republic was improved through amendments to the OHADA Uniform Act on Secured Transactions that broaden the range of assets that can be DB2012 Central African Republic used as collateral (including future assets), extend the security interest to the proceeds of the original asset and introduce the possibility of out-of-court enforcement. Access to credit in Chad was improved through amendments to the OHADA Uniform Act on Secured Transactions that broaden the range of assets that can be used as collateral DB2012 Chad (including future assets), extend the security interest to the proceeds of the original asset and introduce the possibility of out-of-court enforcement. Access to credit in Comoros was improved through amendments to the OHADA Uniform Act on Secured DB2012 Comoros Transactions that broaden the range of assets that can be used as collateral (including future assets), extend the security interest to the proceeds of the original asset and introduce Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 58 AFRICA (OHADA) DB year Economy Reform the possibility of out-of-court enforcement. Access to credit in the Republic of Congo was improved through amendments to the OHADA Uniform Act on Secured Transactions that broaden the range of assets that can be DB2012 Congo, Rep. used as collateral (including future assets), extend the security interest to the proceeds of the original asset and introduce the possibility of out-of-court enforcement. Access to credit in Côte d’Ivoire was improved through amendments to the OHADA Uniform Act on Secured Transactions that broaden the range of assets that can be DB2012 Côte d'Ivoire used as collateral (including future assets), extend the security interest to the proceeds of the original asset and introduce the possibility of out-of-court enforcement. Access to credit in Equatorial Guinea was improved through amendments to the OHADA Uniform Act on Secured Transactions that broaden the range of assets that can be DB2012 Equatorial Guinea used as collateral (including future assets), extend the security interest to the proceeds of the original asset and introduce the possibility of out-of-court enforcement. Access to credit in Gabon was improved through amendments to the OHADA Uniform Act on Secured Transactions that broaden the range of assets that can be DB2012 Gabon used as collateral (including future assets), extend the security interest to the proceeds of the original asset and introduce the possibility of out-of-court enforcement. Access to credit in Guinea was improved through amendments to the OHADA Uniform Act on Secured Transactions that broaden the range of assets that can be DB2012 Guinea used as collateral (including future assets), extend the security interest to the proceeds of the original asset and introduce the possibility of out-of-court enforcement. Access to credit in Guinea-Bissau was improved through amendments to the OHADA Uniform Act on Secured Transactions that broaden the range of assets that can be DB2012 Guinea-Bissau used as collateral (including future assets), extend the security interest to the proceeds of the original asset and introduce the possibility of out-of-court enforcement. Access to credit in Mali was improved through amendments DB2012 Mali to the OHADA Uniform Act on Secured Transactions that broaden the range of assets that can be used as collateral Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 59 AFRICA (OHADA) DB year Economy Reform (including future assets), extend the security interest to the proceeds of the original asset and introduce the possibility of out-of-court enforcement. Access to credit in Niger was improved through amendments to the OHADA Uniform Act on Secured Transactions that broaden the range of assets that can be used as collateral DB2012 Niger (including future assets), extend the security interest to the proceeds of the original asset and introduce the possibility of out-of-court enforcement. Access to credit in Senegal was improved through amendments to the OHADA Uniform Act on Secured Transactions that broaden the range of assets that can be DB2012 Senegal used as collateral (including future assets), extend the security interest to the proceeds of the original asset and introduce the possibility of out-of-court enforcement. Access to credit in Togo was improved through amendments to the OHADA Uniform Act on Secured Transactions that broaden the range of assets that can be used as collateral DB2012 Togo (including future assets), extend the security interest to the proceeds of the original asset and introduce the possibility of out-of-court enforcement. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 60 AFRICA (OHADA) PROTECTING MINORITY INVESTORS Protecting minority investors matters for the ability of WHAT THE PROTECTING MINORITY INVESTORS companies to raise the capital they need to grow, INDICATORS MEASURE innovate, diversify and compete. Effective regulations define related-party transactions precisely, promote clear and efficient disclosure requirements, require Extent of disclosure index (0–10) shareholder participation in major decisions of the Review and approval requirements for related-party company and set detailed standards of accountability transactions ; Disclosure requirements for related-party for company insiders. transactions What do the indicators cover? Extent of director liability index (0–10) Doing Business measures the protection of minority Ability of minority shareholders to sue and hold interested investors from conflicts of interest through one set of directors liable for prejudicial related-party transactions; indicators and shareholders’ rights in corporate Available legal remedies (damages, disgorgement of profits, governance through another. The ranking of economies fines, imprisonment, rescission of the transaction) on the strength of minority investor protections is determined by sorting their distance to frontier scores Ease of shareholder suits index (0–10) for protecting minority investors. These scores are the Access to internal corporate documents; Evidence simple average of the distance to frontier scores for the obtainable during trial and allocation of legal expenses extent of conflict of interest regulation index and the Extent of conflict of interest regulation index extent of shareholder governance index. To make the (0–10) data comparable across economies, a case study uses Simple average of the extent of disclosure, extent of director several assumptions about the business and the liability and ease of shareholder indices transaction. Extent of shareholder rights index (0-10) The business (Buyer): Shareholders’ rights and role in major corporate decisions  Is a publicly traded corporation listed on the economy’s most important stock exchange Extent of ownership and control index (0-10) (or at least a large private company with Governance safeguards protecting shareholders from undue multiple shareholders). board control and entrenchment  Has a board of directors and a chief executive Extent of corporate transparency index (0-10) officer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not Corporate transparency on ownership stakes, compensation, specifically required by law. audits and financial prospects The transaction involves the following details: Extent of shareholder governance index (0–  Mr. James, a director and the majority 10) shareholder of the company, proposes that Simple average of the extent of shareholders rights, extent the company purchase used trucks from of ownership and control and extent of corporate another company he owns. transparency indices  The price is higher than the going price for Strength of investor protection index (0–10) used trucks, but the transaction goes forward. Simple average of the extent of conflict of interest  All required approvals are obtained, and all regulation and extent of shareholder governance indices required disclosures made, though the transaction is prejudicial to Buyer.  Shareholders sue the interested parties and the members of the board of directors. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 61 AFRICA (OHADA) PROTECTING MINORITY INVESTORS Where do the region’s economies stand today? How strong are investor protections against self-dealing does not measure all aspects related to the protection of in economies in Organization for the Harmonization of minority investors, a higher ranking does indicate that an Business Law in Africa (OHADA)? The global rankings of economy’s regulations offer stronger investor these economies on the strength of investor protection protections against self-dealing in the areas measured. index suggest an answer (figure 7.1). While the indicator Figure 7.1 How economies in Organization for the Harmonization of Business Law in Africa (OHADA) rank on the strength of investor protection index Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 62 AFRICA (OHADA) PROTECTING MINORITY INVESTORS The strength of minority investor protection index is the highlight the scores on the various minority investor average of the extent of conflict of interest regulation protection indices for Organization for the index and the extent of shareholder governance index. Harmonization of Business Law in Africa (OHADA). The index ranges from 0 to 10, rounded to the nearest Comparing the scores across the region and with decimal place, with higher values indicating stronger averages both for the region and for comparator regions minority investor protections. Figures 7.2 and 7.3 can provide useful insights. Figure 7.2 How extensive are conflict of interest regulations? Extent of conflict of interest regulation index (0-10) Note: Higher values indicate stronger regulation of conflicts of interest. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 63 AFRICA (OHADA) Figure 7.3 How extensive is shareholder governance? Extent of shareholder governance index (0-10) Note: Higher scores indicate stronger rights of shareholders in corporate governance. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 64 AFRICA (OHADA) PROTECTING MINORITY INVESTORS What are the changes over time? Economies with the strongest protections of minority move ahead on different fronts—such as through new or investors from self-dealing require detailed disclosure amended company laws, securities regulations or and define clear duties for directors. They also have well- revisions to court procedures. What minority investor functioning courts and up-to-date procedural rules that protection reforms has Doing Business recorded in give minority shareholders the means to prove their case Organization for the Harmonization of Business Law in and obtain a judgment within a reasonable time. So Africa (OHADA) (table 7.1)? reforms to strengthen minority investor protections may Table 7.1 How have economies in Organization for the Harmonization of Business Law in Africa (OHADA) strengthened minority investor protections—or not? By Doing Business report year DB2011 to DB2016 DB year Economy Reform Benin strengthened minority investor protections by introducing greater requirements for disclosure of related- party transactions to the board of directors and by making it DB2015 Benin possible for shareholders to inspect the documents pertaining to related-party transactions and to appoint auditors to conduct an inspection of such transactions. Burkina Faso strengthened minority investor protections by introducing greater requirements for disclosure of related- party transactions to the board of directors and by making it DB2015 Burkina Faso possible for shareholders to inspect the documents pertaining to related-party transactions and to appoint auditors to conduct an inspection of such transactions. The Central African Republic strengthened minority investor protections by introducing greater requirements for disclosure of related-party transactions to the board of DB2015 Central African Republic directors and by making it possible for shareholders to inspect the documents pertaining to related-party transactions and to appoint auditors to conduct an inspection of such transactions. Côte d’Ivoire strengthened minority investor protections by introducing greater requirements for disclosure of related- DB2015 Côte d'Ivoire party transactions to the board of directors and by making it possible for shareholders to inspect the documents pertaining to related-party transactions and to appoint Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 65 AFRICA (OHADA) DB year Economy Reform auditors to conduct an inspection of such transactions. Cameroon strengthened minority investor protections by introducing greater requirements for disclosure of related- party transactions to the board of directors and by making it DB2015 Cameroon possible for shareholders to inspect the documents pertaining to related-party transactions and to appoint auditors to conduct an inspection of such transactions. The Republic of Congo strengthened minority investor protections by introducing greater requirements for disclosure of related-party transactions to the board of DB2015 Congo, Rep. directors and by making it possible for shareholders to inspect the documents pertaining to related-party transactions and to appoint auditors to conduct an inspection of such transactions. The Comoros strengthened minority investor protections by introducing greater requirements for disclosure of related- party transactions to the board of directors and by making it DB2015 Comoros possible for shareholders to inspect the documents pertaining to related-party transactions and to appoint auditors to conduct an inspection of such transactions. Gabon strengthened minority investor protections by introducing greater requirements for disclosure of related- party transactions to the board of directors and by making it DB2015 Gabon possible for shareholders to inspect the documents pertaining to related-party transactions and to appoint auditors to conduct an inspection of such transactions. Guinea strengthened minority investor protections by introducing greater requirements for disclosure of related- party transactions to the board of directors and by making it DB2015 Guinea possible for shareholders to inspect the documents pertaining to related-party transactions and to appoint auditors to conduct an inspection of such transactions. Guinea-Bissau strengthened minority investor protections by introducing greater requirements for disclosure of related- party transactions to the board of directors and by making it DB2015 Guinea-Bissau possible for shareholders to inspect the documents pertaining to related-party transactions and to appoint auditors to conduct an inspection of such transactions. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 66 AFRICA (OHADA) DB year Economy Reform Equatorial Guinea strengthened minority investor protections by introducing greater requirements for disclosure of related- party transactions to the board of directors and by making it DB2015 Equatorial Guinea possible for shareholders to inspect the documents pertaining to related-party transactions and to appoint auditors to conduct an inspection of such transactions. Mali strengthened minority investor protections by introducing greater requirements for disclosure of related- party transactions to the board of directors and by making it DB2015 Mali possible for shareholders to inspect the documents pertaining to related-party transactions and to appoint auditors to conduct an inspection of such transactions. Niger strengthened minority investor protections by introducing greater requirements for disclosure of related- party transactions to the board of directors and by making it DB2015 Niger possible for shareholders to inspect the documents pertaining to related-party transactions and to appoint auditors to conduct an inspection of such transactions. Senegal strengthened minority investor protections by introducing greater requirements for disclosure of related- party transactions to the board of directors; by making it possible for shareholders to inspect the documents DB2015 Senegal pertaining to related-party transactions and to appoint auditors to conduct an inspection of such transactions; and by making it possible for shareholder plaintiffs to request from the other party, and from witnesses, documents relevant to the subject matter of the claim during the trial. Chad strengthened minority investor protections by introducing greater requirements for disclosure of related- party transactions to the board of directors and by making it DB2015 Chad possible for shareholders to inspect the documents pertaining to related-party transactions and to appoint auditors to conduct an inspection of such transactions. Togo strengthened minority investor protections by introducing greater requirements for disclosure of related- DB2015 Togo party transactions to the board of directors and by making it possible for shareholders to inspect the documents pertaining to related-party transactions and to appoint Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 67 AFRICA (OHADA) DB year Economy Reform auditors to conduct an inspection of such transactions. The Democratic Republic of Congo strengthened minority investor protections by introducing greater requirements for disclosure of related-party transactions to the board of DB2015 Congo, Dem. Rep. directors and by making it possible for shareholders to inspect the documents pertaining to related-party transactions and to appoint auditors to conduct an inspection of such transactions. The Democratic Republic of Congo strengthened investor protections by adopting the OHADA Uniform Act on Commercial Companies and Economic Interest Groups, which DB2014 Congo, Dem. Rep. introduces additional approval and disclosure requirements for related-party transactions and makes it possible to sue directors when such transactions harm the company. Mali strengthened investor protections through an DB2010 Mali amendment to its civil procedure code increasing shareholders’ access to corporate information during trial. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 68 AFRICA (OHADA) WHAT THE PAYING TAXES INDICATORS PAYING TAXES Taxes are essential. The level of tax rates needs to MEASURE be carefully chosen—and needless complexity in tax rules avoided. Firms in economies that rank Tax payments for a manufacturing company better on the ease of paying taxes in the Doing in 2014 (number per year adjusted for Business study tend to perceive both tax rates and electronic and joint filing and payment) tax administration as less of an obstacle to Total number of taxes and contributions paid, business according to the World Bank Enterprise including consumption taxes (value added tax, Survey research. sales tax or goods and service tax) Method and frequency of filing and payment What do the indicators cover? Time required to comply with 3 major taxes Using a case scenario, Doing Business records the (hours per year) taxes and mandatory contributions that a medium- size company must pay in a given year as well as Collecting information and computing the tax measures of the administrative burden of paying payable taxes and contributions. This case scenario uses a set Completing tax return forms, filing with of financial statements and assumptions about proper agencies transactions made over the year. Information is also Arranging payment or withholding compiled on the frequency of filing and payments as well as time taken to comply with tax laws. The Preparing separate tax accounting books, if ranking of economies on the ease of paying taxes is required determined by sorting their distance to frontier Total tax rate (% of profit before all taxes) scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores Profit or corporate income tax for each of the component indicators, with a Social contributions and labor taxes paid by threshold and a nonlinear transformation applied to the employer one of the component indicators, the total tax rate . 3 Property and property transfer taxes The financial statement variables have been updated to be proportional to 2012 income per capita; Dividend, capital gains and financial previously they were proportional to 2005 income transactions taxes per capita. To make the data comparable across Waste collection, vehicle, road and other taxes economies, several assumptions are used.  Taxes and mandatory contributions are  TaxpayerCo is a medium-size business that measured at all levels of government. started operations on January 1, 2013.  Taxes and mandatory contributions include  The business starts from the same financial corporate income tax, turnover tax and all position in each economy. All the taxes labor taxes and contributions paid by the and mandatory contributions paid during company. the second year of operation are recorded.  A range of standard deductions and exemptions are also recorded. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. 3 The threshold is defined as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 69 AFRICA (OHADA) PAYING TAXES Where do the region’s economies stand today? What is the administrative burden of complying with these economies on the ease of paying taxes offer useful taxes in economies in Organization for the information for assessing the tax compliance burden for Harmonization of Business Law in Africa (OHADA) —and businesses (figure 8.1). The average ranking of the region how much do firms pay in taxes? The global rankings of provides a useful benchmark. Figure 8.1 How economies in Organization for the Harmonization of Business Law in Africa (OHADA) rank on the ease of paying taxes Note: All economies with a total tax rate below the threshold of 26.1% applied in DB2015, receive the same distance to frontier score for the total tax rate (a distance to frontier score of 100 for the total tax rate) for the purpose of calculating the ranking on the ease of paying taxes. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 70 AFRICA (OHADA) PAYING TAXES The indicators underlying the rankings may be more major taxes (corporate income tax, VAT or sales tax and revealing. Data collected by Doing Business show what it labor taxes and mandatory contributions)—as well as the takes to comply with tax regulations in each economy in total tax rate (figure 8.2). Comparing these indicators the region—the number of payments per year and the across the region and with averages both for the region time required to prepare, and file and pay taxes the 3 and for comparator regions can provide useful insights. Figure 8.2 How easy is it to pay taxes in economies in Organization for the Harmonization of Business Law in Africa (OHADA)—and what are the total tax rates? Payments (number per year) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 71 AFRICA (OHADA) PAYING TAXES Time (hours per year) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 72 AFRICA (OHADA) PAYING TAXES Total tax rate (% of profit) Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 73 AFRICA (OHADA) PAYING TAXES What are the changes over time? Economies around the world have made paying taxes concrete results. Some economies simplifying faster and easier for businesses—such as by compliance with tax obligations and reducing rates have consolidating filings, reducing the frequency of seen tax revenue rise. What tax reforms has Doing payments or offering electronic filing and payment. Business recorded in Organization for the Harmonization Many have lowered tax rates. Changes have brought of Business Law in Africa (OHADA) (table 8.1)? Table 8.1 How have economies in Organization for the Harmonization of Business Law in Africa (OHADA) made paying taxes easier—or not? By Doing Business report year DB2011 to DB2016 DB year Economy Reform Gabon made paying taxes more costly for companies by DB2016 Gabon reducing the depreciation rates for some types of fixed assets. The Democratic Republic of Congo made paying taxes more complicated for companies by introducing a new social DB2016 Congo, Dem. Rep. security contribution paid by employers, though it subsequently reduced the rate of the contribution. The Republic of Congo made paying taxes easier for companies by reducing the corporate income tax rate and by DB2015 Congo, Rep. abolishing the tax on the rental value of business premises and the tax on company-owned cars. Gabon made paying taxes easier for companies by DB2015 Gabon introducing an electronic system for filing and paying VAT. Senegal made paying taxes easier for companies by DB2015 Senegal abolishing the vehicle tax and making it possible to download the declaration forms for VAT online. Togo made paying taxes less costly for companies by DB2015 Togo reducing the payroll tax rate. The Democratic Republic of Congo made paying taxes easier DB2015 Congo, Dem. Rep. for companies by simplifying corporate income tax returns and abolishing the minimum tax payable depending on a company’s size. On the other hand, it increased the rate for Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 74 AFRICA (OHADA) DB year Economy Reform the minimum lump-sum tax applied to annual revenue. Burkina Faso made paying taxes easier for companies by DB2014 Burkina Faso abolishing the separate capital gains tax on real estate properties. Côte d'Ivoire made paying taxes more costly for companies by increasing the employers’contribution rate for social DB2014 Côte d'Ivoire security related to retirement, increasing the rate for the special tax on equipment and eliminating several kinds of tax relief for businesses. The Republic of Congo made paying taxes easier and less DB2014 Congo, Rep. costly for companies by merging several employment taxes into a single tax and lowering the tax rate on rental value. Gabon made paying taxes less costly for companies by DB2014 Gabon reducing the corporate income tax rate. Senegal made paying taxes more costly by increasing the corporate income tax rate. At the same time, Senegal DB2014 Senegal facilitated tax payments by making tax forms available online and creating the Center for Medium Enterprises. Togo made paying taxes more costly for companies by increasing corporate income tax rate and employers' social DB2014 Togo security contribution rate and by introducing a new tax on corporate cars. At the same time, Togo reduced the payroll tax rate. The Democratic Republic of Congo made paying taxes more DB2014 Congo, Dem. Rep. costly for companies by increasing the employers' social security contribution rate. Mali made paying taxes less costly for companies by reducing the corporate income tax rate—though it also introduced a DB2013 Mali new tax on land. At the same time, Mali simplified the processes of paying taxes by introducing a single form for joint filing and payment of several taxes. The Democratic Republic of Congo made paying taxes easier DB2012 Congo, Dem. Rep. for firms by replacing the sales tax with a value added tax. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 75 AFRICA (OHADA) DB year Economy Reform Côte d’Ivoire eliminated a tax on firms, the contribution for DB2012 Côte d'Ivoire national reconstruction (contribution pour la reconstruction nationale). DB2012 Togo Togo reduced its corporate income tax rate. DB2011 Niger Niger reduced its corporate income tax rate. The Republic of Congo reduced its corporate income tax rate DB2011 Congo, Rep. from 38% to 36% in 2010. Côte d’Ivoire made paying taxes less costly for companies by DB2011 Côte d'Ivoire reducing the corporate income tax rate. Burkina Faso reduced the statutory tax rate and the number DB2011 Burkina Faso of taxes for business and introduced simpler, uniform compliance procedures. Chad increased taxes on business through changes to its DB2011 Chad social security contribution rates. The Democratic Republic of Congo made paying taxes more DB2010 Congo, Dem. Rep. costly for companies by raising the sales tax rate. To encourage business start-ups, Cameroon exempted new DB2010 Cameroon businesses from the business license tax for their first 2 years of existence. Niger made paying taxes easier for companies by eliminating DB2010 Niger the tax on interest. Benin made paying taxes less costly for companies by DB2010 Benin reducing the corporate income and payroll tax rates. Togo made paying taxes less costly for companies by DB2010 Togo reducing the corporate income tax rate. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 76 AFRICA (OHADA) TRADING ACROSS BORDERS In today’s globalized world, making trade between WHAT THE TRADING ACROSS BORDERS economies easier is increasingly important for INDICATORS MEASURE FOR IMPORT & EXPORT business. Excessive document requirements, burdensome customs procedures, inefficient port Documentary compliance – cost (US$) & time operations and inadequate infrastructure all lead to (hours) extra costs and delays for exporters and importers, stifling trade potential. Obtain, prepare and submit documents: What do the indicators cover? -During transport, clearance, inspections and port or border handling in origin economy Doing Business records the time and cost associated with the logistical process of exporting and -Required by origin, transit and destination economies importing goods. Under the new methodology introduced this year, Doing Business measures the Covers all documents by law and in practice time and cost (excluding tariffs) associated with three Border compliance – cost (US$) & time sets of procedures—documentary compliance, (hours) border compliance and domestic transport—within the overall process of exporting or importing a Customs clearance and inspections shipment of goods. The ranking of economies on the Inspections by other agencies ease of trading across borders is determined by Port or border handling sorting their distance to frontier scores for trading across borders. These scores are the simple average Obtaining, preparing and submitting of the distance to frontier scores for the time and documents during clearance, inspections and port or border handling cost for documentary compliance and border compliance to export and import. Domestic transport* Loading and unloading of shipment To make the data comparable across economies, a few assumptions are made about the traded goods Transport between warehouse and terminal/port and the transactions: Transport between terminal/port and border Time Obtaining, preparing and submitting  Time is measured in hours, and 1 day is 24 documents during domestic transport hours (for example, 22 days are recorded Traffic delays and road police checks while as 22 × 24 = 528 hours). If customs shipment is en route clearance takes 7.5 hours, the data are recorded as is. Alternatively, suppose that * Although Doing Business collects and publishes data on documents are submitted to a customs the time and cost for domestic transport, it does not use agency at 8:00 a.m., are processed these data in calculating the distance to frontier score for overnight and can be picked up at 8:00 trading across borders or the ranking on the ease of trading a.m. the next day. In this case the time for across borders. customs clearance would be recorded as Cost 24 hours because the actual procedure  Insurance cost and informal payments for took 24 hours. which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Contributors are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 77 AFRICA (OHADA) Assumptions of the case study  For each of the 189 economies covered by  Shipping cost based on weight is assumed to Doing Business, it is assumed that a shipment be greater than shipping cost based on travels from a warehouse in the largest business volume. city of the exporting economy to a warehouse  If government fees are determined by the in the largest business city of the importing value of the shipment, the value is assumed economy. For 11 economies the data are also to be $50,000. collected, under the same case study assumptions, for the second largest business  The product is new, not secondhand or used city. merchandise.  The import and export case studies assume  The exporting firm is responsible for hiring different traded products. It is assumed that and paying for a freight forwarder or customs each economy imports a standardized shipment broker (or both) and pays for all costs related of 15 metric tons of containerized auto parts to international shipping, domestic transport, (HS 8708) from its natural import partner—the clearance and mandatory inspections by economy from which it imports the largest value customs and other government agencies, port (price times quantity) of auto parts. It is or border handling, documentary compliance assumed that each economy exports the fees and the like for exports. The importing product of its comparative advantage (defined firm is responsible for the above costs for by the largest export value) to its natural export imports. partner—the economy that is the largest  The mode of transport is the one most widely purchaser of this product. Precious metal and used for the chosen export or import product gems, live animals and pharmaceuticals are and the trading partner, as is the seaport, excluded from the list of possible export airport or land border crossing. products, however, and the second largest product category is considered as needed.  All electronic submissions of information requested by any government agency in  To identify the trading partners and export connection with the shipment are considered product for each economy, Doing Business to be documents obtained, prepared and collected data on trade flows for the most submitted during the export or import recent four-year period from international process. databases such as the United Nations Commodity Trade Statistics Database (UN  A port or border is defined as a place Comtrade). For economies for which trade flow (seaport, airport or land border crossing) data were not available, data from ancillary where merchandise can enter or leave an government sources (various ministries and economy. departments) and World Bank Group country  Government agencies considered relevant offices were used to identify the export product are agencies such as customs, port and natural trading partners. authorities, road police, border guards,  A shipment is a unit of trade. Export shipments standardization agencies, ministries or do not necessarily need to be containerized, departments of agriculture or industry, while import shipments of auto parts are national security agencies and any other assumed to be containerized. government authorities. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 78 AFRICA (OHADA) TRADING ACROSS BORDERS Where do the region’s economies stand today? How easy it is for businesses in economies in across borders suggest an answer (figure 9.1). The Organization for the Harmonization of Business Law in average ranking of the region and comparator regions Africa (OHADA) to export and import goods? The global provide a useful benchmark. rankings of these economies on the ease of trading Figure 9.1 How economies in Organization for the Harmonization of Business Law in Africa (OHADA) rank on the ease of trading across borders Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 79 AFRICA (OHADA) TRADING ACROSS BORDERS The indicators reported here are for trading a shipment and import is collected from local freight forwarders, of goods by the most widely used mode of transport customs brokers and traders. Comparing these indicators (whether sea, land, air or some combination of these). across the region and with averages both for the region The information on the time and cost to complete export and for comparator regions can provide useful insights. Figure 9.2 What it takes to trade across borders in economies in Organization for the Harmonization of Business Law in Africa (OHADA) Time to export: Border compliance (hours) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 80 AFRICA (OHADA) TRADING ACROSS BORDERS Cost to export: Border compliance (USD) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 81 AFRICA (OHADA) TRADING ACROSS BORDERS Time to export: Documentary compliance (hours) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 82 AFRICA (OHADA) TRADING ACROSS BORDERS Cost to export: Documentary compliance (USD) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 83 AFRICA (OHADA) TRADING ACROSS BORDERS Time to import: Border compliance (hours) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 84 AFRICA (OHADA) TRADING ACROSS BORDERS Cost to import: Border compliance (USD) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 85 AFRICA (OHADA) TRADING ACROSS BORDERS Time to import: Documentary compliance (hours) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 86 AFRICA (OHADA) TRADING ACROSS BORDERS Cost to import: Documentary compliance (USD) Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 87 AFRICA (OHADA) TRADING ACROSS BORDERS What are the changes over time? In economies around the world, trading across borders systems. These changes help improve their trading as measured by Doing Business has become faster and environment and boost firms’ international easier over the years. Governments have introduced competitiveness. What trade reforms has Doing Business tools to facilitate trade—including single windows, risk- recorded in Organization for the Harmonization of based inspections and electronic data interchange Business Law in Africa (OHADA) (table 9.1)? Table 9.1 How have economies in Organization for the Harmonization of Business Law in Africa (OHADA) made trading across borders easier—or not? By Doing Business report year DB2011 to DB2016 DB year Economy Reform Benin made trading across borders easier by further developing its electronic single-window system, which DB2016 Benin reduced the time for border compliance for both exporting and importing. Côte d’Ivoire made trading across borders easier by implementing a single-window platform for importing, which DB2016 Côte d'Ivoire reduced the time required for documentary compliance. Mali reduced the time for documentary compliance for both DB2016 Mali exporting and importing by introducing an electronic data interchange system. Niger increased the time and cost for documentary and DB2016 Niger border compliance for importing by making a preshipment inspection mandatory. Togo reduced the time for documentary and border compliance for importing by implementing an electronic DB2016 Togo platform connecting several agencies for import procedures and payments. The Democratic Republic of Congo made trading across DB2016 Congo, Dem. Rep. borders more difficult by increasing the port handling time and cost for exporting and importing. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 88 AFRICA (OHADA) DB year Economy Reform Benin made trading across borders easier by reducing the DB2015 Benin number of documents needed for imports. The Central African Republic made trading across borders DB2015 Central African Republic more difficult by increasing border checks and security controls at the border post with Cameroon. Côte d’Ivoire made trading across borders easier by simplifying the processes for producing the inspection report DB2015 Côte d'Ivoire and by reducing port and terminal handling charges at the port of Abidjan. Benin made trading across borders easier by improving port management systems, enhancing the infrastructure around DB2014 Benin the port and putting in place new rules for the transit of trucks. The Central African Republic made trading across borders DB2014 Central African Republic easier by rehabilitating the key transit road at the border with Cameroon. The Republic of Congo made trading across borders easier by DB2014 Congo, Rep. implementing prearrival processing of ship manifests and making improvements in customs administration. Guinea made trading across borders easier by improving port DB2014 Guinea management systems. Chad made trading across borders more difficult by DB2014 Chad introducing a new export and import document. Togo made trading across borders more difficult by granting DB2014 Togo monopoly control of all port activities at the port of Lomé to a private company. Benin reduced the time required to trade across borders by implementing an electronic single-window system integrating DB2013 Benin customs, control agencies, port authorities and other service providers at the Cotonou port. DB2013 Niger Niger reduced the time to import by expanding and optimizing the use of an electronic data interchange system Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 89 AFRICA (OHADA) DB year Economy Reform for customs clearance. Senegal made trading across borders less costly by opening DB2012 Senegal the market for transport, which increased competition. Mali eliminated redundant inspections of imported goods, DB2011 Mali reducing the time for trading across borders. Burkina Faso reduced documentation requirements for DB2011 Burkina Faso importers and exporters, making it easier to trade. Cameroon reduced the time for exporting and importing, and enhanced the security of goods transiting within the country, DB2010 Cameroon by improving the single-window system (Guichet Unique du Commerce Extérieur) at Douala port and implementing a GPS tracking system and scanners for cargo. In the Democratic Republic of Congo the participation of private companies in the terminal handling process at the DB2010 Congo, Dem. Rep. port of Matadi has reduced cargo handling time by improving the quality of service. Mali reduced the time required for trading across borders by implementing an electronic data interchange system, DB2010 Mali improving the terminals used by Malian traders and streamlining documentation requirements. Senegal made trading across borders easier and less time consuming by introducing improvements at the container DB2010 Senegal terminal at the port of Dakar and increasing the number of agencies involved in trade facilitation. Burkina Faso reduced the time needed for trading across DB2010 Burkina Faso borders by creating a one-stop shop for commercial trade documents. Benin reduced the time needed to clear goods through DB2010 Benin customs by implementing an electronic data interchange system. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 90 AFRICA (OHADA) ENFORCING CONTRACTS Effective commercial dispute resolution has many WHAT THE ENFORCING CONTRACTS benefits. Courts are essential for entrepreneurs INDICATORS MEASURE because they interpret the rules of the market and protect economic rights. Efficient and transparent Time required to enforce a contract through courts encourage new business relationships because the courts (calendar days) businesses know they can rely on the courts if a new customer fails to pay. Speedy trials are essential for Time to file and serve the case small enterprises, which may lack the resources to Time for trial and to obtain the judgment stay in business while awaiting the outcome of a long court dispute. Time to enforce the judgment What do the indicators cover? Cost required to enforce a contract through the courts (% of claim) Doing Business measures the time and cost for resolving a standardized commercial dispute through Attorney fees a local first-instance court. In addition, this year it Court fees introduces a new measure, the quality of judicial Enforcement fees processes index, evaluating whether each economy has adopted a series of good practices that promote Quality of judicial processes index (0-18) quality and efficiency in the court system. This new Court structure and proceedings (0-5) index replaces the indicator on procedures, which was eliminated this year. The ranking of economies Case management (0-6) on the ease of enforcing contracts is determined by Court automation (0-4) sorting their distance to frontier scores. These scores Alternative dispute resolution (0-3) are the simple average of the distance to frontier scores for each of the component indicators The dispute in the case study involves the breach of a  The value of the dispute is 200% of the sales contract between 2 domestic businesses. The income per capita or the equivalent in local case study assumes that the court hears an expert on currency of USD 5,000, whichever is greater. the quality of the goods in dispute. This distinguishes  The seller sues the buyer before the court the case from simple debt enforcement. To make the with jurisdiction over commercial cases worth data comparable across economies, Doing Business 200% of income per capita or $5,000. uses several assumptions about the case:  The seller requests a pretrial attachment to  The dispute concerns a lawful transaction secure the claim. between two businesses (Seller and Buyer), both located in the economy’s largest  The dispute on the quality of the goods business city. For 11 economies the data requires an expert opinion. are also collected for the second largest  The judge decides in favor of the seller; there business city. is no appeal.  The buyer orders custom-made goods,  The seller enforces the judgment through a then fails to pay. public sale of the buyer’s movable assets. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 91 AFRICA (OHADA) ENFORCING CONTRACTS Where do the region’s economies stand today? How efficient is the process of resolving a commercial the ease of enforcing contracts suggest an answer (figure dispute through the courts in economies in Organization 10.1). The average ranking of the region and comparator for the Harmonization of Business Law in Africa regions provide a useful benchmark. (OHADA)? The global rankings of these economies on Figure 10.1 How economies in Organization for the Harmonization of Business Law in Africa (OHADA) rank on the ease of enforcing contracts Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 92 AFRICA (OHADA) ENFORCING CONTRACTS The indicators underlying the rankings may also be judicial processes index (figure 10.2). Comparing these revealing. Data collected by Doing Business show what it indicators across the region and with averages both for takes to enforce a contract through the courts in each the region and for comparator regions can provide economy in the region: the time, the cost and quality of useful insights. Figure 10.2 What it takes to enforce a contract through the courts in economies in Organization for the Harmonization of Business Law in Africa (OHADA) Time (days) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 93 AFRICA (OHADA) ENFORCING CONTRACTS Cost (% of claim) Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 94 AFRICA (OHADA) ENFORCING CONTRACTS Quality of Judicial Processes Index (0-18) Source: Doing Business database. Note: Higher values indicate more efficient judicial processes. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 95 AFRICA (OHADA) ENFORCING CONTRACTS What are the changes over time? Economies in all regions have improved contract clear inactive cases from the docket and by making enforcement in recent years. A judiciary can be improved procedures faster. What reforms making it easier (or in different ways. Higher-income economies tend to look more difficult) to enforce contracts has Doing Business for ways to enhance efficiency by introducing new recorded in Organization for the Harmonization of technology. Lower-income economies often work on Business Law in Africa (OHADA) (table 10.1)? reducing backlogs by introducing periodic reviews to Table 10.1 How have economies in Organization for the Harmonization of Business Law in Africa (OHADA) made enforcing contracts easier—or not? By Doing Business report year DB2011 to DB2016 DB year Economy Reform Côte d’Ivoire made enforcing contracts easier by introducing DB2016 Côte d'Ivoire new provisions on voluntary mediation. Senegal made enforcing contracts easier by introducing a law DB2016 Senegal regulating voluntary mediation. Benin made enforcing contracts easier by creating a DB2015 Benin commercial section within its court of first instance. Côte d’Ivoire made enforcing contracts easier by creating a DB2014 Côte d'Ivoire specialized commercial court. Togo made enforcing contracts easier by creating specialized DB2014 Togo commercial divisions within the court of first instance. Benin made enforcing contracts easier by introducing a new DB2013 Benin code of civil, administrative and social procedures. Cameroon made enforcing contracts easier by creating DB2013 Cameroon specialized commercial divisions within its courts of first instance. Senegal made enforcing contracts easier by launching DB2012 Senegal specialized commercial chambers in the court. Burkina Faso made enforcing contracts easier by setting up a DB2011 Burkina Faso specialized commercial court and abolishing the fee to register judicial decisions. Guinea-Bissau established a specialized commercial court, DB2011 Guinea-Bissau speeding up the enforcement of contracts. Mali improved its contract enforcement process through DB2010 Mali amendments to its civil procedure code introducing case time limits and allowing a summons to be served, with no Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 96 AFRICA (OHADA) DB year Economy Reform intervention by the judge, upon the filing of the complaint at the competent court. Burkina Faso improved its contract enforcement system by DB2010 Burkina Faso reducing court fees and introducing alternative dispute mechanisms. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 97 AFRICA (OHADA) RESOLVING INSOLVENCY A robust bankruptcy system functions as a filter, WHAT THE RESOLVING INSOLVENCY ensuring the survival of economically efficient companies and reallocating the resources of INDICATORS MEASURE inefficient ones. Fast and cheap insolvency proceedings result in the speedy return of businesses to normal operation and increase returns to Time required to recover debt (years) creditors. By clarifying the expectations of creditors Measured in calendar years and debtors about the outcome of insolvency Appeals and requests for extension are proceedings, well-functioning insolvency systems can included facilitate access to finance, save more viable businesses and sustainably grow the economy. Cost required to recover debt (% of debtor’s estate) What do the indicators cover? Doing Business studies the time, cost and outcome of Measured as percentage of estate value insolvency proceedings involving domestic legal Court fees entities. These variables are used to calculate the Fees of insolvency administrators recovery rate, which is recorded as cents on the dollar recovered by secured creditors through Lawyers’ fees reorganization, liquidation or debt enforcement Assessors’ and auctioneers’ fees (foreclosure or receivership) proceedings. To Other related fees determine the present value of the amount recovered by creditors, Doing Business uses the Outcome lending rates from the International Monetary Fund, Whether business continues operating as a supplemented with data from central banks and the going concern or business assets are sold Economist Intelligence Unit. piecemeal In addition, Doing Business evaluates the adequacy Recovery rate for creditors and integrity of the existing legal framework applicable to liquidation and reorganization Measures the cents on the dollar recovered by proceedings through the strength of insolvency secured creditors framework index. The index tests whether economies Outcome for the business (survival or not) adopted internationally accepted good practices in determines the maximum value that can be four areas: commencement of proceedings, recovered management of debtor’s assets, reorganization Official costs of the insolvency proceedings are proceedings and creditor participation. deducted The ranking of economies on the ease of resolving Depreciation of furniture is taken into account insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores Present value of debt recovered are the simple average of the distance to frontier Strength of insolvency framework index (0- scores for the recovery rate and the strength of 16) insolvency framework index. The Resolving Sum of the scores of four component indices: Insolvency indicator does not measure insolvency proceedings of individuals and financial institutions. Commencement of proceedings index (0-3) The data are derived from questionnaire responses Management of debtor’s assets index (0-6) by local insolvency practitioners and verified through a study of laws and regulations as well as public Reorganization proceedings index (0-3) information on bankruptcy systems. Creditor participation index (0-4) Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 98 AFRICA (OHADA) RESOLVING INSOLVENCY Where do the region’s economies stand today? How efficient are insolvency proceedings in economies in comparator regions provide a useful benchmark for Organization for the Harmonization of Business Law in assessing the efficiency of insolvency proceedings. Africa (OHADA)? The global rankings of these economies Speed, low costs and continuation of viable businesses on the ease of resolving insolvency suggest an answer characterize the top-performing economies. (figure 11.1). The average ranking of the region and Figure 11.1 How economies in Organization for the Harmonization of Business Law in Africa (OHADA) rank on the ease of resolving insolvency Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 99 AFRICA (OHADA) RESOLVING INSOLVENCY The indicators underlying the rankings may be more these indicators across the region and with averages revealing. Data collected by Doing Business show the both for the region and for comparator regions can average recovery rate and the average strength of provide useful insights. insolvency framework index (figure 11.2). Comparing Figure 11.2 How efficient is the insolvency process in economies in Organization for the Harmonization of Business Law in Africa (OHADA) Recovery Rate (0–100) Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 100 AFRICA (OHADA) Total Strength of Insolvency Framework index (0-16) Source: Doing Business database. * Indicates a “no practice” mark. See the data notes for details. If an economy has no laws or regulations covering a specific area—for example, insolvency—it receives a “no practice” mark. Similarly, an economy receives a “no practice” or “not possible” mark if regulation exists but is never used in practice or if a competing regulation prohibits such practice. Either way, a “ no practice” mark puts the economy at the bottom of the ranking on the relevant indicator. Source: Doing Business database. Note: Higher values indicate insolvency legislation that is better designed for rehabilitating viable firms and liquidating nonviable ones. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 101 AFRICA (OHADA) RESOLVING INSOLVENCY What are the changes over time? A well-balanced bankruptcy system distinguishes change. Many recent reforms of bankruptcy laws have companies that are financially distressed but been aimed at helping more of the viable businesses economically viable from inefficient companies that survive. What insolvency reforms has Doing Business should be liquidated. But in some insolvency systems recorded in Organization for the Harmonization of even viable businesses are liquidated. This is starting to Business Law in Africa (OHADA) (table 11.1)? Table 11.1 How have economies in Organization for the Harmonization of Business Law in Africa (OHADA) made resolving insolvency easier—or not? By Doing Business report year DB2011 to DB2016 DB year Economy Reform The Democratic Republic of Congo made resolving insolvency easier by adopting the OHADA Uniform Act Organizing Collective Proceedings for Wiping Off Debts. The law allows DB2014 Congo, Dem. Rep. an insolvent debtor to file for preventive settlement, legal redress or liquidation and sets out clear rules on the steps and procedures for each of the options available. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 102 AFRICA (OHADA) DISTANCE TO FRONTIER AND EASE OF DOING BUSINESS RANKING Doing Business presents results for two aggregate even though it is no longer at the frontier in a measures: the distance to frontier score and the ease of subsequent year. doing business ranking, which is based on the distance For scores such as those on the strength of legal rights to frontier score. The ease of doing business ranking index or the quality of land administration index, the compares economies with one another; the distance to frontier is set at the highest possible value. For the total frontier score benchmarks economies with respect to tax rate, consistent with the use of a threshold in regulatory best practice, showing the absolute distance calculating the rankings on this indicator, the frontier is to the best performance on each Doing Business defined as the total tax rate at the 15th percentile of the indicator. When compared across years, the distance to overall distribution for all years included in the analysis frontier score shows how much the regulatory up to and including Doing Business 2015. For the time to environment for local entrepreneurs in an economy has pay taxes the frontier is defined as the lowest time changed over time in absolute terms, while the ease of recorded among all economies that levy the three major doing business ranking can show only how much the taxes: profit tax, labor taxes and mandatory regulatory environment has changed relative to that in contributions, and value added tax (VAT) or sales tax. For other economies. the different times to trade across borders, the frontier is Distance to Frontier defined as 1 hour even though in many economies the time is less than that. The distance to frontier score captures the gap between an economy’s performance and a measure of best In the same formulation, to mitigate the effects of practice across the entire sample of 36 indicators for 10 extreme outliers in the distributions of the rescaled data Doing Business topics (the labor market regulation for most component indicators (very few economies indicators are excluded). For starting a business, for need 700 days to complete the procedures to start a example, the former Yugoslav Republic of Macedonia business, but many need 9 days), the worst performance and New Zealand have the smallest number of is calculated after the removal of outliers. The definition procedures required (1), and New Zealand the shortest of outliers is based on the distribution for each time to fulfill them (0.5 days). Slovenia has the lowest component indicator. To simplify the process two rules cost (0.0), and Australia, Colombia and 103 other were defined: the 95th percentile is used for the economies have no paid-in minimum capital indicators with the most dispersed distributions requirement (table 14.1 in the Doing Business 2016 (including minimum capital, number of payments to pay report). taxes, and the time and cost indicators), and the 99th percentile is used for number of procedures. No outlier is Calculation of the distance to frontier score removed for component indicators bound by definition Calculating the distance to frontier score for each or construction, including legal index scores (such as the economy involves two main steps. In the first step depth of credit information index, extent of conflict of individual component indicators are normalized to a interest regulation index and strength of insolvency common unit where each of the 36 component framework index) and the recovery rate (figure 14.1). indicators y (except for the total tax rate) is rescaled In the second step for calculating the distance to frontier using the linear transformation (worst − y)/(worst − score, the scores obtained for individual indicators for frontier). In this formulation the frontier represents the each economy are aggregated through simple averaging best performance on the indicator across all economies into one distance to frontier score, first for each topic since 2005 or the third year in which data for the and then across all 10 topics: starting a business, dealing indicator were collected. Both the best performance and with construction permits, getting electricity, registering the worst performance are established every five years property, getting credit, protecting minority investors, based on the Doing Business data for the year in which paying taxes, trading across borders, enforcing contracts they are established, and remain at that level for the five and resolving insolvency. More complex aggregation years regardless of any changes in data in interim years. methods—such as principal components and Thus an economy may set the frontier for an indicator unobserved components—yield a ranking nearly Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 103 AFRICA (OHADA) identical to the simple average used by Doing Business . than it would have had before (line D is bigger than line 4 Thus Doing Business uses the simplest method: C in figure 14.2 of the Doing Business 2016 report). weighting all topics equally and, within each topic, giving The nonlinear transformation is not based on any equal weight to each of the topic components . 5 economic theory of an “optimal tax rate” that minimizes An economy’s distance to frontier score is indicated on a distortions or maximizes efficiency in an economy’s scale from 0 to 100, where 0 represents the worst overall tax system. Instead, it is mainly empirical in performance and 100 the frontier. All distance to frontier nature. The nonlinear transformation along with the calculations are based on a maximum of five decimals. threshold reduces the bias in the indicator toward However, indicator ranking calculations and the ease of economies that do not need to levy significant taxes on doing business ranking calculations are based on two companies like the Doing Business standardized case decimals. study company because they raise public revenue in other ways—for example, through taxes on foreign The difference between an economy’s distance to companies, through taxes on sectors other than frontier score in any previous year and its score in 2015 manufacturing or from natural resources (all of which are illustrates the extent to which the economy has closed outside the scope of the methodology). In addition, it the gap to the regulatory frontier over time. And in any acknowledges the need of economies to collect taxes given year the score measures how far an economy is from firms. from the best performance at that time. Calculation of scores for economies with 2 cities Treatment of the total tax rate covered The total tax rate component of the paying taxes For each of the 11 economies in which Doing Business indicator set enters the distance to frontier calculation in collects data for the second largest business city as well a different way than any other indicator. The distance to as the largest one, the distance to frontier score is frontier score obtained for the total tax rate is calculated as the population-weighted average of the transformed in a nonlinear fashion before it enters the distance to frontier scores for these two cities (table distance to frontier score for paying taxes. As a result of 13.1). This is done for the aggregate score, the scores for the nonlinear transformation, an increase in the total tax each topic and the scores for all the component rate has a smaller impact on the distance to frontier indicators for each topic. score for the total tax rate—and therefore on the distance to frontier score for paying taxes—for economies with a below-average total tax rate than it would have had before this approach was adopted in Doing Business 2015 (line B is smaller than line A in figure 14.2 of the Doing Business 2016 report). And for economies with an extreme total tax rate (a rate that is very high relative to the average), an increase has a greater impact on both these distance to frontier scores 4 See Djankov, Manraj and others (2005). Principal components and unobserved components methods yield a ranking nearly identical to that from the simple average method because both these methods assign roughly equal weights to the topics, since the pairwise correlations among indicators do not differ much. An alternative to the simple average method is to give different weights to the topics, depending on which are considered of more or less importance in the context of a specific economy. 5 For getting credit, indicators are weighted proportionally, according to their contribution to the total score, with a weight of 60% assigned to the strength of legal rights index and 40% to the depth of credit information index. Indicators for all other topics are assigned equal weights Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 104 AFRICA (OHADA) Table 13.1 Weights used in calculating the distance to implemented regulatory reforms making it easier to do frontier scores for economies with 2 cities covered business in 3 or more of the 10 topics included in this year’s aggregate distance to frontier score. Changes Economy City Weight (%) making it more difficult to do business are subtracted Dhaka 78 Bangladesh from the total number of those making it easier to do Chittagong 22 São Paulo 61 business. Twenty-four economies meet this criterion: Brazil Armenia; Azerbaijan; Benin; Costa Rica; Côte d’Ivoire; Rio de Janeiro 39 Shanghai 55 Cyprus; Hong Kong SAR, China; Indonesia; Jamaica; China Beijing 45 Kazakhstan; Kenya; Lithuania; Madagascar; Mauritania; Mumbai 47 Morocco; Romania; the Russian Federation; Rwanda; India Delhi 53 Senegal; Togo; Uganda; the United Arab Emirates; Jakarta 78 Uzbekistan; and Vietnam. Second, Doing Business sorts Indonesia Surabaya 22 these economies on the increase in their distance to Tokyo 65 Japan frontier score from the previous year using comparable Osaka 35 data. Mexico City 83 Mexico Monterrey 17 Selecting the economies that implemented regulatory Lagos 77 reforms in at least three topics and had the biggest Nigeria Kano 23 improvements in their distance to frontier scores is Karachi 65 intended to highlight economies with ongoing, broad- Pakistan Lahore 35 based reform programs. The improvement in the Moscow 70 Russian Federation distance to frontier score is used to identify the top St. Petersburg 30 New York 60 improvers because this allows a focus on the absolute United States improvement—in contrast with the relative improvement Los Angeles 40 Source: United Nations, Department of Economic and Social shown by a change in rankings—that economies have Affairs, Population Division, World Urbanization Prospects, made in their regulatory environment for business. 2014 Revision. http://esa.un.org/unpd/wup/CD- ROM/Default.aspx. Ease of Doing Business ranking Economies that improved the most across 3 or more The ease of doing business ranking ranges from 1 to 189. Doing Business topics in 2014/15 The ranking of economies is determined by sorting the Doing Business 2016 uses a simple method to calculate aggregate distance to frontier scores, rounded to 2 decimals. which economies improved the ease of doing business the most. First, it selects the economies that in 2014/15 Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 105 AFRICA (OHADA) RESOURCES ON THE DOING BUSINESS WEBSITE Current features Law library News on the Doing Business project Online collection of business laws and regulations http://www.doingbusiness.org relating to business http://www.doingbusiness.org/law-library Rankings How economies rank—from 1 to 189 Contributors http://www.doingbusiness.org/rankings More than 11,400 specialists in 189 economies who participate in Doing Business Data http://www.doingbusiness.org/contributors/doing- All the data for 189 economies—topic rankings, business indicator values, lists of regulatory procedures and details underlying indicators Entrepreneurship data http://www.doingbusiness.org/data Data on business density (number of newly registered companies per 1,000 working-age Reports people) for 136 economies Access to Doing Business reports as well as http://www.doingbusiness.org/data/exploretopics/ent subnational and regional reports, case studies and repreneurship customized economy and regional profiles http://www.doingbusiness.org/reports Distance to frontier Data benchmarking 189 economies to the frontier Methodology in regulatory practice and a distance to frontier The methodologies and research papers underlying calculator Doing Business http://www.doingbusiness.org/data/distance-to- http://www.doingbusiness.org/methodology frontier Research Information on good practices Abstracts of papers on Doing Business topics and Showing where the many good practices identified related policy issues by Doing Business have been adopted http://www.doingbusiness.org/research http://www.doingbusiness.org/data/good-practice Doing Business reforms Short summaries of DB2016 business regulation reforms and lists of reforms since DB2008 http://www.doingbusiness.org/reforms Historical data Customized data sets since DB2004 http://www.doingbusiness.org/custom-query Doing Business 2016 ORGANIZATION FOR THE HARMONIZATION OF BUSINESS LAW IN 106 AFRICA (OHADA)