Figure 1:

How the World Bank Measures Ease of Starting a Business

Using similar metrics for other aspects of business operations, the Bank has ranked Burundi in a number of other areas. To obtain a construction permit, for instance, Burundi is ranked 175th out of 183 as it takes the completion of 25 procedures, which takes on average 212 days at a cost of nearly $10,575 – an insurmountable amount for the average Burundian.

Continuing in its assessment, the World Bank has determined that in order to obtain and register property, Burundi ranks 115th out of, again, 183 countries measured. To register property in Burundi, the Bank finds, it takes the completion of five bureaucratic procedures that takes, on average, 94 days and costs 5.8-percent of the property’s financial value in fees and other costs to complete.  Given this improvement from the previous score, this makes Burundi only a moderately difficulty place in which to register property.

Burundi does worse when it comes to obtaining credit, where it ranks 168th out of 183. 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. Unfortunately, Burundi couples weak creditor rights with very little information being available on potential borrowers.

Figure 2:

How the World Banks Conceptualizes Credit Acquisition

When it comes to protecting investors and minority shareholders, Burundi improves slightly. Here, the country ranks 154^th out of 183 countries. It has received this score because Burundi requires only moderate levels of conflict-of-interest disclosure and is middlingly difficult place to bring a shareholder lawsuit while directors are rarely held liable.

Burundi again marginally improves in the area of taxation. The World Bank estimates that pleasing the tax man in Burundi requires a total of 32 payments over the course of a year which, in turn, takes up to 211 hours to complete and can consume up to 153.4-percent of a company’s profits. Accordingly, Burundi’s tax burden is ranked 141^st out of 183 nations, making it a country with one of the highest tax burdens on Earth.

When it comes to engaging in cross-border trade, however, Burundi does very poorly. In Burundi, to import goods into the country one is required to have 10 documents for customs’ officials to inspect. On average, it takes a total of 71 days to import goods into Burundi with the cost amounting to $4,285 (excluding tariffs) per container shipped into the country.

The cost to export goods is somewhat lower as Burundi requires only eleven documents to be inspected by customs’ officials, while the total cost (excluding taxes) is $2,747 per container, with delivery taking up to 47 days from point of origin. Compared to global averages this nets Burundi a ranking of 176^th out of 183 on ease of engaging in cross-border trade.

Burundi does about the same when it comes to contract enforcement, where it ranks 171^st out of 183 countries ranked on this issue by the Bank. On average, reports World Bank analysts, it takes a total of 44 legal procedures to take a contract from dispute to resolution, at the cost of 832 days spent in court or otherwise attending to legal issues.

The financial cost of pursing a contract claim, says the Bank, typically accounts for 38.6-percent of the value of the claim – clearly a huge deterrent to the legal enforcement of contracts and why Burundi ranks so low given its otherwise good scores in this area.

Finally, in terms of closing or liquidating a business Burundi ranks 183^rd out of 183 countries as there is no history of practice in the country.

Table 1 presents a summary of these rankings as well as Burundi’s overall ease-of-doing business rating. By any measure Burundi is a hard country to do business. It does least badly, however, in the area of registering property, openings a business, and paying taxes.

Table 1:

World Bank Ease of Doing Business

Assessment and Rankings: Burundi