South Africa can learn from Rwanda - CNBC Africa

South Africa can learn from Rwanda

Southern Africa

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South Africa can learn from Rwanda's commitment to policy reform. PHOTO: Getty Images

“There’s this argument in the markets at the moment, that the BRICS emerging markets have failed to reform, they haven’t really transformed their economies. They’ve taken advantage of a commodity boom but not done any real change,” Renaissance Capital’s global chief economist Charlie Robertson told CNBC Africa.

He indicated that one of the best places to start a business is Rwanda, where it only takes two days to do so.

“The best place is always Singapore, but the most interesting best place is Rwanda. It comes 8th in the world, I think, for this measure. They’re doing extremely well at trying to encourage this entrepreneurial spirit.”

It has often been said that the BRICS nations – Brazil, Russia, India, China and South Africa – are in the process of changing the current political and economic landscape. In terms of the ease of doing business however, it seems that further progress is needed.

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“If you look at Brazil, they’re about 130th, 135th in the ease of doing business – this is not an entrepreneurial market economy. South Africa is around 41st place but not when it comes to starting a new business – it takes 19 days to start a new business in South Africa compared to two in Rwanda,” Robertson explained.

“It’s not being made easy for people to start their own businesses. That might help create a small to medium-sized enterprises that would then create jobs, and perhaps get the 25 per cent unemployed back to work.”

Robertson maintained that improved policy and reform had played the biggest part in helping Rwanda to become a thriving, entrepreneurial economy.

“In Rwanda, when they made it just a few days to start up a new business, 6,000 new businesses were registered in 2011, and that was more than the previous five years put together. When you make it easier for entrepreneurs, as Rwanda has done, you can’t predict where all the benefits are going to come from,” he said.

“For South Africa, cutting down the procedures, cutting down some of the bureaucracy, making it simpler for businesses to get going – it’s something which has been done in Rwanda. The South African government, if they were committed to doing this, could copy the same reforms.”

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