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DOING BUSINESS IN ZANZIBAR 2010

Zanzibar TownMarch 22, 2011

Peter Ladegaard

Regional Program ManagerInvestment Climate Advisory Services in East and Southern Africa

Launched 8 years ago

Focuses on regulations relevant to the life cycle of a small to medium-sized domestic business based on a standardized case

Does not measure all aspects of the business environment

The objective: efficient regulations, accessible to all, and simple to implement

Doing Business compares business regulation in 183 economies

What Subnational Doing Business adds

Expands the DB indicators beyond the most populous city

Captures local differences in regulations or enforcement

Includes rules and regulations at all levels of government

Gives specific locations an opportunity to tell their story

Provides a tool for locations to compete globally

Provides information on good practices within the same country

that can be easily replicated

Combines media appeal of DB with active participation of

subnational governments in the reform process

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Countries: 43

Where do we work?

Cities: 339

Doing Business in Zanzibar 2011

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Creates a baseline for Zanzibar

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 and reform recommendations

Zanzibar’s global ranking varies by topic

Starting a business could be simplified

Post-incorporation procedures take up 80% of the time

28 days 72%

Dealing with construction permits—time, cost and procedures

Obtaining a building permit and connecting to electricity are the biggest bottlenecks

65 days

Registering property is costly

It costs 20.2% of property value to register and transfer property in Zanzibar

Getting credit—no coverage of information due to lack of a credit bureau

Protecting investors—minority shareholder rights

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► New company law in Rwanda strengthens investor protection

Paying taxes—time, number of payments and total tax rate

Trading across borders—preparing and obtaining documents lengthy

22 days to export

US$ 844 per container

29 days to import

US$ 1,192 per container

Enforcing contracts—Zanzibar ranks 2nd among 35 small island economies

Closing a business—no practice

Formal bankruptcy procedures are rarely or never used in Zanzibar

Only a few cases of winding ups since 2002

Doing Business methodology—at least 5 cases a year within the last 5 years

Zanzibar is classified as a “no practice” economy

Easier business entry means more new firms: evidence from empirical research

MexicoImpact of the reduction of registration procedures through the introduction of One-Stop Shops and the elimination of federally required procedures

Increase in the number of new firms of about 6% Increase in employment by 2.6% Consumer Price Index decrease by 1% due to competitive pressures of new

entrants

ColombiaImpact of the introduction of One-Stop Shops in 6 cities:

Increase of 5.2% in the number of new firms

IndiaImpact of the elimination of License Raj in 16 states over 64 industries:

Increase in the number of new firms by 6%

Why business regulation reform matters

Thank you

http://www.doingbusiness.org/Zanzibar

http://www.doingbusiness.org/subnational

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