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Quick wins can boost SA’s business ease rankings, Parliamentary committee hears

Feb 18 2020 15:26
Khulekani Magubane, Fin24

A Department of Trade and Industry official said on Tuesday that South Africa had already taken several measures to improve the country's ranking on the World Bank's global ease of doing business index, and further improvements could be expected within the next two years.

This was at a meeting with Parliament's portfolio committee on trade and industry, following the establishment of a technical task team intended to enhance the ease of doing business in SA. The task team was set to examine various issues, including adjustments to SA's visa regime and providing access to markets.

SA's ranking in the World Bank's index – which ranks countries in descending order – has fallen consistently in recent years, from a position in the top 30 in 2006 to no. 84 in 2020.

At the same time, a number of other African countries are improving their ease of doing business at a faster rate than South Africa, increasing competition for the top spots.

More agility needed

Yunus Hoosen, director of Invest SA – a division of the dti which supports investors exploring opportunities in the country – said despite reforms that the initiative had implemented, indicators that the World Bank includes in the survey often change, meaning government’s response must be more agile.

"When the World Bank does its survey, the private sector can validate that the registration of a business indeed takes one day and that will be accounted for in the survey.

"It's not about what government says," said Hoosen.

Biz Portal 'working well'

However, Hoosen said he was confident that South Africa's ranking on the index would improve – at the very least – in terms of ease and speed of starting a business, thanks to the Biz Portal initiative, which will reform business registration.

Biz Portal is a Companies and Intellectual Property Commission platform that offers company registration and related services digitally.

"The Biz Portal has been working on a pilot basis, and we so far 5 863 companies have been registered with the Biz Portal, including the provision of BEE and tax certificates.

"So, the portal is working well. We just need to roll it out," Hoosen said.

Visa improvements

Hoosen told the committee that a three-way committee with the Department of Home Affairs and the Department of Employment and Labour was collaborating to iron out South Africa's visa regime as well.

He said Home Affairs was expected to release the critical skills visa framework this year.

"We would like to encourage investors that are coming [to South Africa] to work with the desk we have in Invest SA on visas and facilitate those discussions with Home Affairs.

"We meet once a month and where there are issues, we can identify and flag them for the Department of Home Affairs to address," he said.

African competitors

He said countries with smaller economies, such as Mauritius, Rwanda and Kenya, were beginning to outperform South Africa on the index, but this must be considered alongside the fact that these countries are "starting from a lower base".

"Countries are coming from a low base and making reforms. What this shows is that it is not a quick fix exercise; it is not a once-off fix that changes things.

"In terms of permits and expediting process, we found that within 24 months we could make some progress," Hoosen said.

He said the current ranking of South Africa in terms of starting a business was 139, insisting that this "simply should not be the case".

parliament  |  south africa  |  investment  |  visa  |  trade
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