CAIRO, October 25, 2016
– Business reforms in Egypt are starting to have real impact for local entrepreneurs. According to the World Bank Group’s
Doing Business 2017: Equal Opportunity for All
report, released today. Egypt ranked 122 out of 189 countries in the latest report, compared to 131 out of 189 last year.
The improvement is due to two reforms making it easier to do business in Egypt. Starting a business is now easier as one-stop shops have introduced a follow-up unit to liaise with the tax and labor authorities on behalf of the entrepreneur. Additionally, there were enhanced protections for minority investors by strengthening their role in major corporate decisions. In addition to these reforms, changes to the Doing Business indicator methodology also resulted in a positive change for Egypt’s ranking on four indicators: Dealing with Construction Permits, Getting Electricity, Registering Property and Resolving Insolvency.
"The recent improvement in business reform activity in Egypt is very encouraging," said
Dr. Asad Alam, the Country Director for the World Bank
. "The progress seen in some indicators needs to be replicated across the board, and the pace can even be accelerated which would be important for Egypt to support local entrepreneurs, attract investors and to compete with global leaders in providing an attractive business climate".
Globally, Egypt performs well on Doing Business indicators such as Starting a Business and Getting Credit. For example, it takes about one week for Egyptian entrepreneurs to incorporate a business, compared to 10 days in Russia and 43 days in South Africa. In terms of Getting Credit, Egypt is one of only four economies in the Middle East and North Africa region where credit reporting follows best international practices.
“Amid the current economic challenges, improving the business environment needs to remain a priority on the government's agenda. This year, the government has worked on addressing some of the major issues facing investors, yet there is a lot to be done in other significant areas like contract enforcement, licensing and gender equality” said
Mouayed Makhlouf, IFC Regional Director for the Middle East and North Africa.
“Sustainable and continuous business regulatory reform is key to restore investor confidence, unlock private sector potential and boost overall economic development in Egypt.”
The Doing Business report indicates several areas in need of improvement. Egypt ranks near the bottom for example on the Enforcing Contracts indicator, where it takes almost three years to resolve a commercial dispute through the local courts. This compares to less than a year in Russia. On the Trading-Across-Borders indicator, it takes 240 hours on average to comply with Egypt’s customs regulations to import goods, compared to 99.4 hours in Indonesia and 144 in South Africa.
This year’s Doing Business report completes a three-year effort to expand benchmarks that measure the quality of regulation, as well as efficiency of the business regulatory framework, in order to better capture realities on the ground. The report also features an expanded indicator capturing the process of Paying Taxes indicator, which now covers post-filing processes, such as tax audits and tax refunds. The economies of the Middle East and North Africa generally perform well in these new areas. However, Egypt does not yet have a VAT refund mechanism for capital expenses.
New this year is the introduction of a gender dimension in three Doing Business indicators: Starting a Business, Registering Property and Enforcing Contracts. Seventy percent of the region’s economies impose more regulatory hurdles for women entrepreneurs than men. The Middle East and North Africa region could do more to improve disparities in the business climate for women and men.
