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Sierra Leone Business: Salone 2017 doing business ranking drops – SLEO

The country’s ranking for Ease of Doing Business has declined to 160 in 2017 from 148 in 2016. In terms of the distance-to-frontier (DTF) indicator, Sierra Leone’s score decreased to 48.18 in 2018, down from 50.23 in the previous year.
According to the Sierra Leone Economic Outlook 2018 (SLEO), this decline is as a result of weak institutional arrangements for property registration and construction permits, low access to finance and credit, huge energy deficits, obstacles to cross-border trade, and a weak insolvency regime.
The rankings for property registration and construction permits declined to 165 and 182, respectively, from 163 and 132 in 2016, largely reflecting weaknesses in institutional arrangements.
Access to credit declined to 159 from 157 in 2017 due to only a few commercial banks continuing to dominate the financial landscape. The ranking of access to electricity also declined to 178 from 176, underscoring the weak energy infrastructure and huge energy deficit.
“The process of resolving insolvency is still protracted and costly, reflected by a worsening of the ranking from 148 in 2016 to 159 in 2017, falling behind the regional average. Resolving insolvency in Sierra Leone takes on average 2.3 years and costs 42 percent of the debtor’s estate. The most likely outcome of insolvency in Sierra Leone is that the company is sold as a piecemeal sale” the report noted.
With regards to the ranking in starting a business, Sierra Leone recorded improvement, moving in the opposite direction to 83 in 2017 from 87 in 2016. The number of days it takes to start a business changed to 11 from 10 in 2016, while the number of procedures to start a business improved to 5 from 6 in 2017.
The report indicates that until 2016 the business registration process had been fragmented and required coordination between the Corporate Affairs Commission (CAC), the National Revenue Authority (NRA), and the Office of the Administrator and Registrar General, a process which was often suboptimal.
A new procedure which centralized the business registration process under the CAC was introduced in 2017 and has served to ease the registration process for businesses. The CAC now collates all relevant information on behalf of other agencies such as the NRA.
The new process is divided into three steps online: name search; submission of signed memorandum; and submission of articles of incorporation together with the application forms and proof of payment.
The report underscores the fact that Sierra Leone is not doing enough to improve the business regulatory environment, as reflected through a comparison with regional comparators.
Similar to previous years, Sub-Saharan African (SSA) countries implemented a greater number of reforms in 2016/17 than those in any other region, with a total of 83 reforms recorded in all the areas measured by Doing Business 2018.
By Zainab Iyamide Joaque
Monday August 06, 2018.

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