The outstanding issues in doing business in Sierra Leone

A market scene in Freetown called Kroo Town Road

For a country just emerging from over a decade of civil war, Sierra Leone`s performance in the World Bank`s annual ‘Ease of Doing Business’ rating represents a major stride towards its recovery effort.

The annual reports analyzes regulations that apply to the economies of 185 countries in the world, taking note of the life cycle of businesses including start-up and operations, cross border trading, tax payment, as well as investor protection.

The 2013 edition, released in October last year, ranks Sierra Leone 140 on the overall ‘Ease of Doing Business.’ That`s 8 points above the previous year`s.

But the country scores low in a number of other indicators, which were the focus of a one-day event recently, organised by the World Bank Group in collaboration with the government.

Dubbed ‘Doing Business in Sierra Leone: A case of international competitiveness or growth opportunities for local business’, the event highlighted the country`s performance in the 2013 report with a view to strengthening its business regulatory environment and improve its international competitiveness.

Besides its overall ranking, Sierra Leone was also placed among the top 15 economies said to have improved their business regulatory environment the most out of 174 economies since 2005, a year after the commencement of the annual ranking.

But when compared to fellow African countries such as Mauritius, South Africa, Tunisia, and Rwanda, there is so much of room for improvement for the West African country, notes the World Bank in a statement.

Focus is largely placed on how local entrepreneurs fair.

The process involves in securing construction permit, courts system and registration of properties are high on the list of areas Sierra Leone needs to improve on.

“In Sierra Leone, obtaining construction permits takes roughly 8 months, compared to just over three months in Burundi…To enforce a contract in the case of a small commercial dispute, an entrepreneur in Freetown spends close to a year and a half – 9 more months than in Kigali, Rwanda – and it can cost him more than the disputed amount in attorney fees, court and enforcement costs,” the World Bank said.

Rwanda is placed high among Sub Saharan African countries in terms overall regulatory reforms, and its experience as a country only emerging from a civil war often makes it a favourite reference point for countries like Sierra Leone.

The Eastern African country is cited as exemplary model for its substantial improvement on access to credit, streamlining procedures for starting of business, border trade simplification as well as access to court for dispute resolutions.

Most of these are areas Sierra Leone badly need improvement on.