Business is the backbone of any economy; more especially the importance of small to medium size enterprises (SMEs) can not be understated. The World Bank annually ranks economies around in the world on their ease of doing business, and measures business regulation and the protection of property rights and their effect on businesses, especially the SMEs.

The rankings are based on the following criteria:

• Starting a Business – This involves the length of time, the number of procedures and the cost as a percentage of gross national income (GNI) per capita faced by entrepreneurs looking to get going.
• Dealing With a License – This involves the procedures, time and cost of obtaining the necessary permits and licenses.
• Employing Workers – This involves the hiring and firing of employers.
• Registering Property – This is the ease of obtaining the rights to a property.
• Getting Credit – This measures credit information sharing and the legal rights of borrowers and lenders.
• Protecting Investors – This looks at the transparency of business transactions, liability for self dealing, and the ease of shareholders to sue officers and directors for misconduct.
• Paying Taxes – This measures what a medium sized company come through to pay taxes.
• Trading Across Borders - This looks at the costs and procedures involved in importing and exporting a standardized shipment of goods.
• Enforcing Contracts – Measures the ease or difficulty of enforcing commercial contracts.
• Closing a Business – Looks at the time and cost to settle bankruptcies.

ClickAfrique takes a look at the 2006 rankings to see who African countries fared and bring you the ten best performers with their World rankings in brackets.

10. Ethiopia (97) - Slipped down one rank from its 2005 world ranking. The number of days and procedures one has to through to open a business in Ethiopia is just as good at that found in OECD countries (30 of the World’s leading economies). However it would cost an individual half of their year income on average to cover the cost of setting up a business, and 10 times that to provide the start-up capital. It takes 16 days (16.6 in OECD countries) to open a business here.

9. Ghana (94) - Ghana performed better in providing a more friendly business environment than the previous year and this saw the country move up eight places in the 2006 World rankings. Ghana’s major improvement was in easing trading across its borders. Ghana’s protection of business investor is comparable to what is found in OECD countries, as well as the hiring and hiring of employees. It takes 81 days and 50 percent of the average annual income to start a business here.

8. Seychelles (84) - The Seychelles’s efficient tax system means takes less than half the time to file taxes than what is found in OECD countries, and a quarter for what is found in sub-Saharan Africa. It is also just as good as OECD countries in protecting business investors. It takes 38 days and 9 percent of the average annual income to start a business here.

7. Kenya (83) - The high cost and the number of procedures involved in trading across its borders, remains one the biggest problems in doing business in Kenya. However the red tape involved in the acquisitions of licenses and permits is less that that found in OECD countries, and is almost as good when to it comes to the hiring and firing of employees. It takes 54 days and 50 percent of the average annual income to open a business here.

6. Tunisia (80) - This middle income African economy does as well as many of the OECD countries it comes to trading across its borders and it is also easier to hire employers. It is however about six times harder to fire them; then again the whole procedure is less expensive than what is found in OECD countries. It takes 11 days and 9.3 percent of the average annual income to open a business here.

5. Swaziland (76) - Slips down ten places in the World rankings from the previous year. While there is less red tape in a starting a business and hiring and firing of workers is better in Swaziland than in OECD countries, it is twice as expensive to do business across its borders. It takes 61 days and 41 percent of the average annual income to open a business here.

4. Botswana (48) - Botswana strength lies in protecting investors, paying taxes, trading across borders, the ease of businesses registering rights to properties, as all these are just as good as what is found in OECD countries. However it would need to improve the abilities of businesses to fire employees, as well as reduce the length of time it takes to open a business. It takes 108 days (about twice the average on the continent) and 10.6 percent of the average annual income to open a business here.

3. Namibia (42) - While trading across Namibia’s borders is twice as expensive as the OECD countries, the country does just as well in the protection of investors, employment of workers and the registration of property, even better in the dealing of permits and licenses needed to run a business. It takes 95 days and 18 percent of the average annual income to open a business here.

2. Mauritius (32) - While hiring workers in Mauritius, getting rid of them is till something of an issue. It also performs worst than the average in terms of the cost for registration of properties rights on the continent. It is however just as good as many of the OECD countries when it comes to protecting investors and paying taxes. It also fares better when it comes to trading across its borders. It takes 46 days and 8 percent of the average annual income to open a business here.

1. South Africa (29) - While South Africa has more rigid hiring and firing procedures, as well as a poor track in closing down businesses, than the OECD countries, it fares just as good as any of them in any of the other criteria. It takes 35 days and 6.9 percent of the average annual income to opena business here.