Rwanda drops: Why next year’s Doing Business indicators will be even worse

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This year’s Doing Business report (2015) has caught Rwanda by surprise. Rwanda has dropped to 46th position from 32nd global ranking in last year’s report (2014).

Had Rwanda government folks been paying attention to debates about the inadequacy of Doing Business report from within and outside the World Bank, they would not have been surprised. In 2012, the World Bank assigned an independent panel of experts chaired by Travor Manuel, the then South African Minister in charge of planning, to recommend how to revamp the flagship report. As a result of improvements in Doing Business, the methodologies, and the measurables are being sharpened. Very simply, Doing Business is becoming less simplistic in its approach. And next year’s report (2016) will represent a fundamental shift in that direction.

Let us use two examples for illustration.

Example 1: Registering property

In the old way of doing things, the registering property indicator set simply measured the procedures, time and cost to transfer a property. This will change sharply next year. The indicator set will be expanded to cover

• Reliability
• Transparency
• Geographic coverage, and;
• Dispute resolution.

How can Rwanda with arbitrary application of rules – to the extent of grabbing duly registered properties fare in this expanded indicator set?

Example 2: Obtaining electricity

Getting electricity was previously assessed by merely looking at the process for obtaining an electricity connection, time and costs involved. Next year’s Doing Business will assess

• Reliability of electricity supply
• Duration of power outages, and
• Frequency of power outages.

Let us wait and see how Rwanda’s ramshackle electricity sector will measure up in the 2016 Doing Business.

Dr David Himbara

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