Liberia Scores Below Regional Average in Improving Ease for Starting New Business
MONROVIA – Liberia is trailing when it comes to removing constraints in starting up a small-scale business, a new World Bank report, Doing Business, has revealed, but Togo and Nigeria have made some tremendous strides in the Sub-Saharan region and remain among the top global performers, the report shows.
The Doing Business 2020 Report targeted reforms implemented by the countries in the region to ease constraints in doing business. The regional average ease of doing business score was 51.8 on a scale of 0 to 100, below the OECD high-income average of 78.4 and the global average of 63.0.
Liberia scored 43.2 for 2020 – a 0.3 down from the 43.5 2019 score. The average 2020 regional score is 51.8.
According to the report, Liberia has implemented only three reforms in the past five years to make operation of business smooth. Burundi, the Central African Republic and Namibia have implemented only four.
President George Weah might be struggling on his inaugural promise of making Liberia open for business on his first day in office. He said, “To investors, we say Liberia is open and ready for business. Over the long term, private investment will be our key strategy to delivering transformation. We will work to relax constraints to private investment; strengthen the business, legal and regulatory environment, and protect business profits.”
However, the World Bank Doing Business Report reveals that not much has been done in alleviating the constraints as promised by the President. The report took into consideration constraints in starting a business, dealing with construction permits, getting electricity, getting credits, registering properties, protecting minority investors, paying taxes, trading across borders, enforcing contracts and solving insolvency.
According to the report, Liberia ranked 75 out of 190 countries when it comes to ease in starting up a small and medium size business. The report took into consideration the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city. However, Liberia scored favorable points in this section – 88.9 points out of 100.
A major constraint impeding the operation of business in Liberia is electricity. The World Bank, a major partner to the Government of Liberia when it comes to the provision of electricity, graded Liberia’s score in this section at 39.1 with a rank of 175. The regional average is 50.4 with Rwanda topping with 82.3 and ranking 54 of the 190 countries.
Liberia is at the bottom in the region when it comes to registering property for business. With a score of 31.9, Liberia is ranked 180 of the 190 countries. Rwanda is ranked third in this category with a score of 93.7. The regional average score for registering property is 53.6.
Kenya and Rwanda have rank fourth in attaining credit for doing business. Both countries have a score of 95.0 of 100, followed by Ghana which has a score of 60.0 ranking 80. Liberia is next from the bottom in the region ranking 104 on the global stage with a score of 50.0. Sierra Leone sits at the bottom in this segment (in the region) with a score of 25.0 and ranks 165.
When it comes to protecting minority investors, Liberia is the least in the Sub-Saharan region. In this segment, Doing Business ranks Liberia 176. The score here is 22.0. The regional average is 38.5. Kenya is doing well here, it scored 92.2 and ranks number one of the 190 countries. Ghana follows with a 60.0 score and ranks 72.
Liberia is next to Rwanda when it comes to the ease in paying taxes in Sub Saharan Africa. Ranking 76 on the global stage, Liberia has a score of 76.4. Rwanda on the other hand ranks 38 with a score of 84.6. Sierra Leone performed with 73.0 points with a rank of 93, Kenya ranked 94 while Ghana trailed in the region with a score of 56.0 and ranked 152 as per the survey.
Liberia’s performance in cross-border trade is the least lest in the region. The score here is 19.2 and ranks 184 amongst the 190 surveyed countries.