South Sudan improves business climate: World Bank

From AFP, May 17, 2011:

Southern Sudan, poised to become Africa’s newest nation in July, is making progress in creating a business-friendly environment, the World Bank said Tuesday.

“The Government of Southern Sudan is making strides to improve the business environment for small and medium enterprises,” the Washington-based institution said in a report on business regulations in Juba, which will be the new nation’s capital.

The semi-autonomous region overwhelmingly voted to secede from Sudan in a January referendum after five decades of conflict between the mainly Christian, African south and the predominantly Arab, Muslim north.

The World Bank report, “Doing Business in Juba 2011,” cites improvements in eight laws on business registration, operations, and land ownership that have been enacted since the 2005 peace agreement.

Starting a business, for example, takes a relatively swift 15 days in Juba, compared with an average 13.8 days in developed economies of the Organization for Economic Cooperation and Development, the bank noted.

But the cost of starting a business is sky-high — as much as 250 percent of per-capita income and more than twice the average cost in Sub-Saharan Africa, according to the report financed by the US Agency for International Development.

Although commercial banks have been established and basic infrastructure is being rehabilitated, the fledgling country must make further progress to achieve a healthy business climate, the World Bank said.

“Reforms that cut red tape, clarify property rights, and streamline regulatory compliance can yield big payoffs,” Mierta Capaul, a top private-sector development specialist of the World Bank, said in a statement.

The study, conducted in partnership with the government’s ministry of investment, highlighted key areas for improvement, including access to credit which at present is very limited.

“There is an opportunity for Southern Sudan to build the strong foundation necessary for a vibrant formal private sector,” Capaul said.

The International Monetary Fund, the World Bank’s sister institution, said in late April it had received a membership application from South Sudan.

In view of the application, the IMF said it would seek donor contributions for a special $10.6 million trust fund to provide intense technical assistance to the authorities in building the new country’s macroeconomic institutions.

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