When this metric is applied to Zambia, the bank finds that Zambia ranks 57^th out of 183 in ease of starting a business, making Zambia a relatively easy place to start a legal commercial enterprise. To start a business in Zambia, one has to complete six bureaucratic procedures that take a total of 18 days at a total cost of about $270, with no minimum amounts of capital required by the government on the start-up.

Figure 1:

How the World Bank Measures

the Ease of Starting a Business

         

Using similar metrics for other aspects of business operations, the bank has ranked Zambia in a number of other areas. To obtain a construction permit, for instance, Zambia is ranks 158^th out of 183 – much worse than its business creation ranking – as it takes the completion of 17 procedures, which takes on average 254 days at a cost of $23,000, or around 24 times national income.

Clearly, this is a very large obstacle to overcome for the average Zambian and constitutes a large obstacle to business expansion.

Continuing in its assessment, the World Bank has determined that in order to obtain and register property, Zambia ranks 83^rd out of, again, 183 countries measured. To register property in Zambia, the bank finds, it takes the completion of five bureaucratic procedures that takes, on average, 40 days and costs 6.6-percent of the property’s financial value in fees and other costs to complete.

Zambia does much better when it comes to obtaining credit, where it ranks 6^th out of 183 – making the country one of the best places in the world in this category. Here, as depicted in Figure 2, the bank examines the legal rights of creditors and borrowers in secured transactions and bankruptcy law as well as the strength of credit information bureaus and exchanges.

When lenders have both strong legal rights and easy access to a wide variety of information about the client’s creditworthiness, reasons the bank, the more available credit will be. When information on borrowers is significantly lacking – as is the case in most of Africa – legal protections for creditors must in turn be very strong. In Zambia, creditors have very strong legal rights and private credit bureaus have a great deal of information on potential creditors in country.

Figure 2:

How the World Banks Conceptualizes Credit Acquisition

 

When it comes to protecting investors and minority shareholders, unfortunately Zambia does much worse. Here, the country ranks 74^th out of 183 countries – making the country a middling place for minority shareholders. Zambia received this score because the country is an easy place to bring minority lawsuits, holds company directors legally liable, and forces some degree of conflict-of-interest disclosures by corporate officials.

Zambia fortunately does much better in the area of taxation. The World Bank estimates that pleasing the tax man in Zambia requires a total of 37 payments over the course of a year which, in turn, takes up to 132 hours to complete and can consume up to 16.1-percent of a company’s profits. Accordingly, Zambia’s tax burden is ranked 37^th out of 183 nations.

When it comes to engaging in cross-border trade, Zambia’s scores plunge again. In Zambia, to import goods into the country one is required to have eight documents for customs’ officials to inspect. On average, it takes a total of 56 days to import goods into Zambia with the cost amounting to $3,315 (excluding tariffs) per container shipped into the country.

The cost to export goods, though, is smaller as Zambia requires only six documents to be inspected by customs’ officials, while the total cost (excluding tariffs) is $2,664 per container, with delivery taking up to 44 days from point of origin. Compared to global averages this nets Zambia a ranking of 150^th out of 183 on ease of engaging in cross-border trade – largely due to its relatively isolated, landlocked geographic location.

Zambia fortunately does better when it comes to contract enforcement, where it ranks 86^th out of 183 countries ranked on this issue by the bank. On average, reports World Bank analysts, it takes a total of 35 legal procedures to take a contract from dispute to resolution, at the cost of 471 days, or about a year and fourth months, spent in court or otherwise attending to legal issues.

The financial cost of pursing a contract claim, says the Bank, typically accounts for 38.7-percent of the value of the claim.

Finally, in terms of closing or liquidating a business Zambia ranks 90^th out of 183 countries. Here, it takes 2.7 years to close an estate at a cost of nine percent of the value of said estate, for a recovery rate of 27.2 cents on the dollar.

Table 1 presents a summary of these rankings as well as Zambia’s overall ease-of-doing business rating.  As one can see, Zambia’s scores seesaw wildly from area to area. Zambia is a good place to start a business, obtain credit, or pay tax, but a very difficult place to obtain construction permits or to engage in international trade.

Table 1:

World Bank Ease of Doing Business

Assessment and Rankings: Zambia