ibc swaziland - starting a business in swaziland 29052012
TRANSCRIPT
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P R E S E N T A T I O N B Y
P R E S I D E N T , F S E & C C
M A Y 2 9 T H , 2 0 1 2
Starting a Business In Swaziland:Issues and Bottlenecks
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Background Information
Enabling Environment important to attractingentrepreneurs to start businesses
Enabling environment includes:
regulatory framework investment climate
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Regulatory Framework
Regulations that directly affect businesses throughthe costs of compliance
Indirect costs resulting from unnecessary
transactions such as time lost while chasing permits,licenses, and completing numerous documents
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Investment Climate
Encompasses wider framework conditions:
Infrastructure
Functioning financial markets
Functioning health and education systems
Trade Liberalization
Political stability and security
Standards for production
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What Does It Take To Start A Business in Swaziland?
Write letter to Registrar of Companies and reserve name
Pay fee for reserving name at Treasury
Obtain tax clearance for company directors
Request law firm to prepare documents for incorporation Submit documents to Company registrar
Acquire trading licence from Ministry of IndustryCommerce and Trade*
*Paying for licence, obtaining bank statements, tax identification numbers fromSRA, certificate of inspection from Health Dept/City Council, registeringworkers with the Provident Fund, enrolling for Workmens Compensation with
SRIC.
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Process Is Cumbersome!
Many procedures, a lot of institutions:
Registrar of companies, Treasury, Swaziland RevenueAuthority, law firm, licensing department at Ministry ofCommerce, Industry and Trade, bank, Health Department or
City Council, Swaziland National Provident Fund, RoyalSwaziland Insurance Corporation
Institutions critical to process mainly located inMbabane
Procedures take too long, e.g. registration (up to 30days) and acquiring a licence (up to 30 days)
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Other Considerations
Dependency on sole providers for important services
Small market size with significant poverty andunemployment rates.
Business risks associated with occasional socialunrest.
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Starting A Business In Swaziland A WBDB* 2012Perspective
Swaziland ranks 161 out of 183 economies on easeof starting a business
Ranking dropped from 157 (2011) to 161(2012)
Amongst lowest ranked countries in the SADCregion
*WBDB World Bank Doing Business
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Swaziland vs Other African Economies
Country Rank on Ease of Starting aBusiness
South Africa 44
Zambia 69
Botswana 90Regional Average (Sub-Saharan Africa) 123
Namibia 125
Lesotho 144
Swaziland 161
Angola 167
Source: Doing Business Report 2012
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Swaziland is Falling Behind
Swaziland Sub-Saharan Africa
DB 2008 DB2012 DB2008 DB2012
Number of Procedures 12 12 10 8
Time in Days 60 56 55* 38*
Costs (% of income percapita)
41.1 29.2 180* 80*
Paid-in minimum capital(% of income per capita)
0.6 0.5 180* 130*
Source: Doing Business Report 2012
*Figures not exact based on graphical interpretation
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WBDB 2012 In a Nutshell
More procedures to start business in Swazilandcompared to region
Takes longer in Swaziland to start business
compared to region Reform process is slow report says nothing has
been done in the past few years
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Post WBDB 2012
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Trading Licences (Amendment) Act 2011
Shortens advertising period during trading licenceapplication from 21 days to 3 days
Business owners in informal sector dont have to
advertise when applying for licence Consent to conduct Business on Swazi Nation Land
only given to indigenous Swazis and companieswholly owned by indigenous Swazis
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More Silver Lining
Shop Trading Hours Act, 2011
Launch of Investor Roadmap
SIPA initiative for online registration of companies
Allocation of funds in budget to build factory shells
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More Can Be Done
Cut red tape reduce number of procedures andinstitutions that need to be consulted
Decentralize company registration and licensing
Institute and accelerate e-registration and licenceapplication
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Conclusion
Swaziland has room for improvement.
Private sector and government collaboration crucialin improving business climate.
Recommendations from PSDS and InvestorRoadmap key to process.
We must not be defensive, but be introspective.
Once we have improved processes, we mustcommunicate and highlight our improvements.
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Thank You!