Antananarivo, September 19, 2008 -- The most recent reforms undertaken by Madagascar in the area of regulatory reforms has led to improvement of the country’s business environment.
As a result, in the Doing Business 2009 (DB2009) report, launched by the World Bank and International Monetary Fund on September 10 Madagascar was ranked 144 moving up seven notches from last year. This improved ranking comes on the heels of reforms undertaken by Madagascar in four areas: starting a business, registering property, paying taxes and fees, and trading across borders.
Although the business environment has improved, much remains to be done.
Madagascar has reduced obstacles to starting a business by abolishing the business license fee and streamlining procedures for advertising the start of a business. A clear improvement was also noted in the area of property registration, which was largely attributable to the training of and increase in the human and technical resources assisting with reforms in this sector. As a result, the time required to register property has been cut in half, falling from 134 to 74 days.
In the area of taxation, corporate taxes were reduced to 25 percent. Stamp duty, along with other fees, was abolished, which helped lower the total cost of registering property by four percent of the property value. Trade processes were expedited, particularly following the introduction of an electronic data transfer system, which offered a single window serving as the interface with the customs system, ports, container terminal operators, commercial banks, the Central Bank, and the public treasury. In addition, risk-based inspections and port facility improvements also had a positive impact. These changes helped reduce import wait times by roughly three weeks, and export wait times, by five days.
Among those attending the launch were the Minister of Agriculture, Fisheries, and Livestock, the Minister of Finance and Budget, and the Minister of Land Reform, Property, and Territorial Development.
“The results achieved are attributable to the reforms undertaken a few years ago in order to improve the business environment, said Eric Rakoto-Andriantsilavo, Chief Executive Officer of the Economic Development Board of Madagascar (EDBM). “However, this ranking also indicates that much work remains to be done in order to boost our competitiveness in relation to other global destinations.”
A number of reforms recently undertaken after the conclusion of the DB2009 surveys suggest that further improvement will be seen in the next ranking, in particular in terms of the procedures for starting a business and paying taxes.
For the third consecutive year, Singapore has copped first place in DB2009 for economies with the best record for ease of doing business. Mauritius is included in the top 25 this year for the first time. In the area of business reform, four African countries are among those with the highest ranking: Senegal, Burkina Faso, Botswana, and Egypt.
“Improving the business environment is a key factor in fostering private sector development and attracting national and foreign investment,” said Robert Blake, World Bank Country Manager in Madagascar. “Doing Business is based on the principle that economic activity should be supported by solid and transparent rules.”
Doing Business is the product of collaboration between the World Bank and the International Finance Cooperation.
Aida der Hovanessian, IFC Country Manager; Ivohasina Razafimahefa, Minister of Economy, Commerce, and Industry; and Robert Blake, World Bank Country Manager for Madagascar at the workshop to present Doing Business 2009.
“IFC has implemented a program to improve the business environment in Madagascar, which supports the Government’s reform projects,” said Aida der Hovanessian, IFC Country Manager in Madagascar. “The findings of this year’s Doing Business clearly demonstrate the success of the reforms undertaken by Madagascar and lay the groundwork for a scaling up of IFC investments in Madagascar.”
DB2009 is the sixth annual report published on regulations that facilitate the ease of doing business and those that impede it. It contains a quantitative evaluation of the regulations applied to businesses based on ten indicators: starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, and closing a business.
The 2009 publication provides a measurement of business legislation in 181 countries. Since publication of the first edition in 2003, the Doing Business report has become a global reference document, supplementing the range of tools available to investors to assist with the decision-making process.
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