Uganda risks getting a bad World Bank competitiveness ranking next year due to the failure by parliament to strike out 56 business formalisation licences considered unnecessary.

Kampala got $100 million from the World Bank in 2013 to improve competitiveness and enterprise development and has since been trying to reduce red tape, but parliament has not acted on recommendations to reduce bureaucratic bottlenecks.

Bemanya Twebaze, registrar-general at the Uganda Registration Services Bureau (URSB), said that even with the money, the country will probably perform poorly in next years’ Doing Business Index due to parliament’s failure to act on the recommendations.

Mr Twebaze said that Uganda has failed to achieve the desired progress, as challenges still exist in resolving insolvency, getting electricity and paying taxes — the things the World Bank factors into its report.

Uganda improved by two places from 152 in 2014 to 150 in the last competitiveness ranking, behind Rwanda, which was ranked 46th globally; Tanzania at 131 and Kenya at 136.

Frank Ssebowa, executive director of the Uganda Investment Authority (UIA) said he was frustrated at parliament’s refusal to drop some of the licences that government officials wanted dropped, saying it reduced the country’s capacity to attract investors. 

Mr Ssebowa said Uganda has been regressing in the Doing Business rankings from the 120th position in 2012 to 150 now and that parliament’s actions will worsen the rating.

Information from URSB shows the government attempted to have parliament repeal 56 licences to ease business formalisation at the budget process in April and May. But parliament only repealed five.
He added that different government agencies require licences from the same business, which makes the process cumbersome.

Peter Ngategize, the National Co-ordinator in charge of Competitiveness and Investment Climate, said the regulatory burden caused by the many licensing requirements costs the country Ush725 billion ($197.3 million).

Other than reducing the number of licences, URSB is using some of the $100 million from the World Bank to automate business registration.

The World Bank Doing Business rankings measure different indicators such as dealing with construction permits, getting electricity and starting a business.

Uganda performs the worst when compared with its East African counterparts in the starting a business category. It takes seven days to start a business in Rwanda; five in Burundi; 30 in Kenya and 26 in Tanzania, compared with Uganda’s 32 days.

URSB seeks to improve the starting a business category ranking — where Uganda fell four places from 162 to 166 out of the 189 economies ranked this year — through automation of business registration.

The registration bureau has now started the process of automating business registration and improving collaboration with other government entities that issue business licences.

Source: The East African

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