According to a briefing by InvestSA to the portfolio committee on Trade and Industry on the 18th of February 2020 the department has failed to improve its rankings in the World Bank’s Ease of Doing Business Report 2020.
In 2019 South Africa’s overall ranking was 84 out of 190 countries. Despite the launch of a working group collaboration with the World Bank, South Africa’s ranking has remained exactly the same in 2020.
Furthermore, individual rankings have slipped to even lower levels than before. For example;
- Starting a Business 2019 – 134 to 2020 – 139
- Paying Taxes 2019 – 46 to 2020 – 54
- Registering Property 2019 – 106 to 2020 – 108
- Trading Across Borders 2019 – 143 to 2020 – 145
- Dealing with Construction Permits 2019 – 96 to 2020 – 98
Despite this poor performance, InvestSA has set itself lofty targets to improve its numbers in the 2021 version of the report with the following ranking projections; Starting a Business 9, Paying Taxes 25, Registering Property 44, Trading Across Borders 88 and Dealing with Construction Permits 7.
Several interventions have been initiated since the working group was created, such as the Bizportal and the eClearance online portal which allows for the registration of a business in 1 day. Such interventions are welcomed and step in the right direction.
However, the Trading Across Borders indicator should really concern the DTI as on average it takes 92 hours to comply with border export regulations and costs the equivalent of $1 257 for a $50 000 shipping container of 15 metric tonnes.
Whereas it takes 87 hours to import a container of the same size for $676. In terms of documentary compliance, it takes 68 hours to comply with export requirements at a cost of $55 and 36 hours to comply with import requirements at a cost of $73.
The above is exemplified by the state of our ports in both Durban and Cape Town which are far from ready to take advantage of the African Continental Free Trade Agreement.
The DA will be closely monitoring the action steps taken by the DTI to improve its ranking and will continue to fight for the removal of red tape that stifles entrepreneurship and job creation.