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EASE OF DOING BUSINESS IN EASTERN AND SOUTHERN AFRICA
Maputo, Mozambique, 30 June-2nd
July 2014
PRESENTATION SUMMARY
By Thierry K. Mutombo
Director of Investment Promotion and Private sector Development
COMESA Secretariat
Session 5: “Status Quo” Eastern & Southern Region Investment Climate - Opportunities,
Constraints and Impact
1. COMESA programme on ease of doing business
 COMESA: one of the major Regional Economic Communities composed of 19
countries among which 15 from Eastern and Southern region.
COMESA is implementing a programme with its member States on promoting
private sector investments across the region through the COMESA Common
Investment Area. One of the focus areas of the programme is the ease of doing
business, and goes beyond the World Bank indicators.
 Following a business survey undertaken in 2009 in all its member States,
COMESA adopted a related roadmap since 2010 which is being implemented.
Since then, COMESA is assisting its member States in the area of creation of an
enabling business environment using among other Word Bank indicators, with
the support of top reformers in the region and the IFC experts.
2. Ease of doing business and FDI attractiveness
 There is a relationship between ease of doing business and FDI attractiveness;
but this relation is not direct one. This is where investment opportunities are very
important to complete the ease of doing business in attracting investments/some
types of investments. Natural resources are not due to human action. A country
with friendly business environment but which lacks natural resources will never
attract related investments.
 In the same vein, a country with a lot of bilateral investment treaties will not
necessarily attract more investment from related counterpart country.
 Many motives to justify investment decision making

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3. Status quo or progress on ease of doing business in the region
 Since countries in Eastern and Southern Africa are embarked in policy reform
programme to facilitate business, questions have been raised to find out if
progress is made or not in this area.
 Generally speaking, there is progress in the efforts made by the countries in this
region to improve the ease of doing business, but at the different pace.
Three cases to be illustrated:
(i) Swaziland: made 1 policy reform in 2012 and 2 policy reforms in 2013 while its ranking
remains the same (123rd
position) in both 2013 and 2014 Doing business reports.
However, in Global competitiveness, the country ranking is improved for the same
period ( from 135th
position in 2012 to 124th
position in 2013 (Global
competitiveness reports)
(ii) DR Congo: made 1 policy reform in 2012 and 3 policy reforms in 2013 while its ranking
worsened from 181st
position to 183rd
position respectively in 2013 and 2014 Doing
Business reports
(iii)Madagascar: made 1 policy reform in 2012 and 2 policy reforms in 2013 while its
ranking once more, worsened from 142nd
position to 148th
position respectively in
2013 and 2014 Doing business reports.
 The overall performance on ease of doing business should not be restricted to only
World Bank doing business ranking. We should go beyond and consider other
existing indexes. The WB Doing Business 2014 states that since 2003, it was
recorded more than 2,100 regulatory reforms made by countries; and the report
recognizes that most economies that undertake regulatory reforms do so as part of a
broader reform agenda.
4. Opportunities/challenges/Impact
 Today, Africa is seen as a continent of bright future. Many TNCs are investing
more in developing countries even though the Africa’s share on FDI flows
remains weak. However, regarding the investment signals, a good number of
those TNCs are planning to invest in Africa. The continent should prepare itself to
receive and keep those forthcoming FDI.
 According to Ernst &Young (Doing Business in Africa), Africa is likely to provide
the most consistent and robust rates of growth over the next 10-15 years. From
2011, more than 15 African economies (among which those from Eastern and
Southern Africa) registered growth rates higher than 5% despite a slow recovery
from the global recession.

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 South Africa and other selected countries are investing in other countries in the
region and beyond with good return on investment (MTN, Shoprite, Pick and Pay,
Nakumat, Equity Bank…)
 Countries in Eastern and Southern Africa are endowed with natural resources to
attract some types of major investors.
Major challenges:
Power supply: remains low and cost higher (Eskom despite renewable Energy or shale
bids, contribution, the capacity remain small)
Transport infrastructure: the road and railway connectivity in Africa remains a big
challenge which impact of the cost of doing business. This is the same for the existing
corridors, North and South corridor: the time and the costs of moving goods from one
border to another.
Financial services remain limited: South Africa, Mauritius and Kenya registered strong
financial sector growth compared to the rest of the countries in the region.
Impact:
Governments should always assess the impact of the policy reforms on the ground and
assure their effectiveness.
5. Lessons to learn from ease of doing business
 The World Bank Doing business ranking is useful and is an important benchmark tool
that helps to emulate countries to make more and more policy and institutional reforms
even though the ranking itself doest explain the overall business environment of a
country.
 Africa seeks to attract more investments. Thus, Policy and institutional reforms should
be selective and based on the investors’ needs. Countries should take advantages of
existing benchmark index (World Bank doing business, Global competitiveness index)
as basis for their efforts on reforming programme for the ease of doing business.
These existing indexes complement each other.
 Today many countries have a programme to improve the business environment. Those
who do not make substantive efforts will be left behind.