David Bridgman

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David Bridgman
Regional Product Manager, Investment Climate IFC
Advisory Services
Brice Richard
Subnational Doing Business, Global Indicator and
Analysis Department, World Bank
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What does Doing Business measure?

• Doing Business reports
• Measure 183 economies
• Focus on regulations relevant to the life cycle
  of a small to medium-sized domestic business in
  the largest business city
• Are based on standardized case scenarios
• The objective efficient regulations, accessible
  to all, and simple to implement

Doing Business DOES NOT measure all aspects of
the business environment such as macroeconomic
stability, corruption, level of labor skills,
proximity to markets, or of regulation specific
to foreign investment or financial markets.
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Doing Business indicators 11 areas of business
regulations (9 included in the ranking)
Start-up Expansion Operations Closing
Starting a business Minimum capital requirement, procedures, time and cost Registering property Procedures, time and cost Getting credit Credit information systems Movable collateral laws Protecting investors Disclosure and liability in related party transactions Enforcing contracts Procedures, time and cost to resolve a commercial dispute Dealing with construction permits Procedures, time and cost Paying taxes Payments, time and Total Tax Rate Trading across borders Documents, time and cost Getting electricity (annex I) Procedures, time and cost Employing workers (annex II) Closing a business Time, cost and recovery rate
Property rights Investor protection Access to
credit
Recovery rate Reallocation of assets
Administrative burden Flexibility in hiring
Entry
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What do city profiles add?

• Expands the DB indicators beyond the city
  measured by DB
• Includes rules and regulations at all levels of
  government
• Give specific locations an opportunity to tell
  their story
• Provides a tool for locations to compete globally
• Combines media appeal of DB with active
  participation of subnational governments in the
  reform process

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Doing Business in Juba 2011

• Doing Business in Juba 2011 measures national and
  local regulations in Juba as they apply to
  domestic small and medium-size enterprises. Data
  is as of November 2010.
• Covers 9 indicators
• Starting a business
• Dealing with construction permits
• Registering property
• Getting credit
• Protecting investors
• Paying taxes
• Trading across borders
• Enforcing contracts
• Closing a business
• Includes global comparisons with183 economies and
  reform recommendations

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Doing Business in Juba 2011

• This report is a useful tool for the Government
  of Southern Sudan, the Government of Central
  Equatoria and Jubas Payams in 4 respects

• (1) It reflects what has been achieved since the
  peace agreement was signed, such as the creation
  of the Business Registry, and the drafting and
  enactment of laws guiding business registration,
  operation and exit.
• (2) It identifies which areas offer opportunities
  for improvement
• The legal and regulatory framework remains
  incomplete
• The existing legal system can be confusing
• Some institutions are either absent or
  overlapping
• Institutional capacity and infrastructure must be
  strengthened
• (3) It offers recommendations for policymakers to
  improve the business environment.
• (4) It provides a benchmark for Southern Sudan,
  on the eve of formal independence

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Key findings

• Juba would rank 159th out of 183 economies
  measured by DB on the ease of doing business

• Jubas global rankings vary by indicator

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Starting a business is fast in Juba, thanks to
the Business Registry

• Starting a limited liability company in Juba
  takes 11 procedures, 15 days, and costs 250.2 of
  income per capita

9
Dealing with construction permits is
expensive, due to connection to utilities

• To obtain all permits to build a warehouse and
  connect it to utilities, it takes 10 procedures,
  30 days, and costs 5,936 of income per capita

10
Registering property is expensive, survey and
lease transfer fees are high

• It takes an entrepreneur 7 procedures, 18 days
  and costs 14.7 of property value to register
  property in Juba

• Fast time does not indicate that the process is
  efficient all operations are manual and paper
  based but reflects the low volume of
  transactions.
• Cost is the major bottleneck.
• Entrepreneurs in Juba must pay 3 different fees
  to 3 different authorities.

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Getting credit is difficult, related legal rights
and credit information are scarce

• Juba scores 2 out of 10 on the strength of legal
  rights index and 0 out of 6 on the depth of
  credit information index

• On the strength of legal rights index

• No clear framework for secured transactions.
• No unified functioning registry for collateral.

• No credit information registry or bureau.

• On the depth of credit information index

12
The laws protecting investors offer limited
protection to minority shareholders

• Juba scores 2.7 out of 10 on the overall strength
  of investor protection index

• 3 out of 10 on the extent of disclosure index
• 0 out of 10 on the director liability index
• 5 out of 10 on the ease of shareholder suits
  index

13
Entrepreneurs need details on paying taxes, such
as which taxes to pay, and to whom

• A company spends 218 hours per year making 46 tax
  payments, and pays 25.5 of its profits paying
  taxes

• Taxation Act in 2009 has been passed, setting
  broad provisions, but provisions are needed on
  which taxes are in effect, and which authorities
  can collect which taxes.
• In Juba, companies with revenue under SDG 10
  million are considered small companies and taxed
  accordingly at a lower rate.

14
Trading across borders to and from Juba is
cumbersome and costly

• To import submit11 documents, wait 60 days, and
  spend US 9,420
• To export submit 9 documents, wait 52 days, and
  spend US5,025

• Importers in Juba spend over half of total time
  on paperwork, and most of the cost on inland
  transportation

• Trading across borders is slow and expensive, for
  3 main reasons
• Multiple checkpoints
• Complexity of the administrative processes
• Poor quality of inland transport infrastructure

15
Enforcing contracts is fast, but there is a need
for more specialized legal professionals

• Enforcing contracts takes 46 procedures, 111 days
  and 26 of the value of the claim

• If the claim is above SDG 1,000 (US 453), the
  claim falls under the jurisdiction of a first
  grade judge at the county court.
• The time to enforce a contract comprises 21 days
  for the filing and service period, 60 days for
  the judgment period and 30 days for the
  enforcement period.
• The legal system can be confusing as it relies on
  3 distinct frameworks. There is also need for
  more legal professionals, especially advocates
  and judges specialized in commercial law.

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Closing a business no practice in formal
bankruptcy

• Formal bankruptcy procedures are never or rarely
  used in Juba

• No cases of winding ups since 2005.
• Doing Business methodology requires at least 5
  cases a year during the last 5 years.
• Juba is classified as a no practice economy.
• Enacting the Insolvency Bill would be a step in
  the right direction.

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Why does it matter?

• Improving business start up is associated with an
  increase in economic growth and investment rate.
• Lowering barriers to entry correlates to less
  perceived corruption and a smaller informal
  sector.
• Removing barriers also gives opportunities of
  inclusion to youth and women.
• Efficient property registration can make it
  easier to transfer property and can help boost
  the number of property registration.

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Thank you !
www.doingbusiness.org /juba