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2008 DOING BUSINESS REFORMS FRANK TWAGIRA, COORDINATOR, DOING BUSINESS TASKFORCE, RIEPA. 23 th APRIL 2008
DB performance 2007 and 2008 Ease of. . . Doing Business 2008 rank Doing Business 2007 rank Change in rank Doing Business 150 0 Starting a Business 63 55 -8 Dealing with Licenses 124 132 8 Employing Workers 95 95 0 Registering Property 137 134 -3 Getting Credit 158 156 -2 Protecting Investors 165 0 Paying Taxes 50 52 2 Trading Across Borders 166 178 12 Enforcing Contracts 44 44 0 Closing a Business 178 0
2007 performance l Significant improvement in dealing with licenses and trading across borders (8 places and 12 places respectively) due to a number of administrative improvements. l Marked slippage (8 places) in starting a business due to slower reform compared to other countries. l Other indicators moderately flat.
l l l Government prioritizes improvement of business environment and put in place a multi-agency taskforce to oversee and implement reforms under RIEPA’s coordination. RIEPA is committed to implementing a set of reforms to improve Rwanda’s ranking starting with DB 2009 well into the double digits by the end of our current strategic plan (2012). Reforms are prioritised into short, medium and long term and by specific indicators to remain achievable since progress on all indicators is neither practical nor possible.
1. l l l Starting a business Registrar General for the Commercial Registration Agency recently appointed and recruitment ongoing. This will be the one stop centre for business startup and company incorporation. We have achieved agreement on implementing reforms in the publication requirement, company seal, streamlining notarisation and the possibility of standard articles of association.
For the medium to long term, we aim for a single access point for all registration, including tax and social security requirements. 2. Dealing with licenses l Kigali districts have merged procedures for applying for construction permits/licenses. A single application is required for deed plan, location permit and building permit. l Applications for electricity and water have been merged. l Electrogaz has trained technicians to ease this and has started subcontracting connections to private providers. l
3. Registering Property l Property registration fee of 6% of the value of property and mortgage registration fee of 2. 25% abolished. Replaced by low flat fee of RWF 20, 000 l We are presently looking at fast tracking procedures for property registration and setting time limits. 4. Getting credit l Public credit bureau with creditor information back up to 2 years possible. l Considering establishment of a private credit reference bureau for the medium to long term.
Compuscan, a potential credit information provider presented recently. 5. Trading across borders l Broad customs reforms have been implemented e. g. single bank payment point for customs, RBS and Magerwa, customs and Magerwa computer systems interfaced, roll out of Ascuda ++ at major border posts, remote connection of clearing agents through DTI, special desk handling goods imported under RIEPA certificate etc l We are aiming for document simplification for our imports and exports and reduce on time taken. l
Integration of border clearance procedures and promote risk based assessments. l Pre-clearance and prepayment possible. l For the medium to long term, we are aiming for the establishment of the Electronic Single Window to further facilitate trade. 6. For employing workers, the final validation of the labour code has been completed and should be passed into legislation over the next 2 months l
7. Protecting investors l Draft company law that addresses issues such as disclosure, rights of shareholders to sue, director liabilities and related party transactions has been validated and should be presented to Cabinet and then Parliament soon. l Other draft laws include: Contract, secured transactions, business registration, competition and consumer protection, insolvency etc. 8. Paying taxes l We aim to reduce tax compliance costs and in the long term enable electronic filing and payments.
l l l Tax payments beyond RWF 500, 000 are made through the use of cheques. The threshold for goods cleared at the border has been increased from RWF 200, 000 to RWF 1 million at major border posts. Exemptions have been decentralised to junior officers
9. Enforcing contracts l Commercial courts have been established and expatriate judges contracted to fasten the resolution of commercial disputes. l They are to also build capacity of Rwandan judicial officers. 10. Closing a business l The poor performance over the years in this indicator is due to low cases of bankruptcy and classification as ‘no practice country. Draft law on insolvency, and negotiable instruments ready for legislation process.
Observation l l Rwanda is implementing reforms that go beyond those measured in the WB DB assessments e. g. access to finance, and broader investment climate issues etc. Overall objective is to create an enabling environment in which Private sector can thrive to become engine of growth and poverty reduction.
l Need to harmonise donor interventions with regard to business reforms and private sector development to avoid potential duplication.