In his recent State of the Nation Addresses, President Ramaphosa vowed to speed up economic growth. He has set several key milestones to measure how effectively he is putting South Africa back on a positive economic path, such as attracting R1.2 trillion in investment in five years (in less than two years well over half of this has been raised).
One of these milestones is to improve South Africa’s position in the “Doing Business Index” (often referred to as the “Ease of Doing Business Index”) which ranks 190 countries around the world – the higher up you are on this World Bank scale, the easier it is to trade in your country which will attract businesses to enter the local market.
Where South Africa stands
The President has set the goal of South Africa climbing into the top fifty of the Index in the next three years. Currently we sit at number eighty-four and unfortunately slipped two places in the 2019 survey. In Sub-Saharan Africa we rank fourth behind Mauritius, Rwanda and Kenya.
How the Index works
It compiles several measurements for businesses like:
- Ease of getting a construction permit. Here our ranking is 98.
- Getting electricity where we are number 114.
- Registering property – ranked 108.
- Obtaining credit. South Africa is just in the top half at number 80.
- Protecting minority investors – in this field we are ranked 13th mainly due to the excellence of our Companies Act.
- Paying taxes which sees us at number 54.
- Enforcing contracts, number 102.
- Resolving insolvency which is not too bad at 68.
- Cross border transactions where we are down at 145. This is something we are working on with our trading partners.
- Starting a business which is disappointing as we are number 139.
A new online one-stop business registration platform
Clearly, there is quite a bit of work to do and one recent initiative launched by the President is the creation of CIPC’s “Biz Portal”. This is a one-stop online platform whereby you as an entrepreneur can register a business, can register for tax, UIF and the Compensation Fund, register a domain name, open a bank account and get a BEE certificate. All for R175. The aim of the Biz Portal is that all these tasks can be completed in one day whereas it otherwise takes forty days to open a business in South Africa.
This will be a significant step forward in moving South Africa up in the Doing Business Index.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)