EASE OF DOING BUSINESS
Cape Town ranked the number one metropolitan municipality in SA for Ease of Doing Business
The City of Cape Town has been ranked the top metropolitan municipality in SA when it comes to the ease of doing business, according to the latest World Bank research report on Doing Business in South Africa.
The World Bank collaborates with economies to undertake subnational studies and releases reports that capture differences in business regulations and their enforcement across locations in a single country. They provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas.
Getting Electricity to your Business
The City’s top ranking in terms of providing electricity puts Cape Town in the top 20 percent of city economies worldwide. It takes 91 days to connect a customer, much quicker than Tshwane with 110 days and Johannesburg at 109 days.
Dealing with Construction Permits
Cape Town also ranked the best city in South Africa in dealing with construction permits which also puts us in the top 25 percent of city economies worldwide. This is because the City’s Development Management Department improved the building permit issue turnaround time from 45 days to an average of 17 days. Now new businesses take 88 days to obtain all the necessary licences and permits, completing required notifications and inspections, nearly half to Johannesburg’s 155-day period.
While the registering property process in Cape Town is not the most efficient in the country, the City of Cape Town’s prides itself in issuing 97% of Rates Clearance Certificates within 8 working days, ensures that 92% of applications submitted by attorneys in the Rates Clearance automated electronic platform and it reduced the turnaround times for issuing rates clearance certificates by 20% in the past 3 years.
Trading across borders
At Cape Town port, agricultural cargo (edible fruit and nuts; peel of citrus fruit or melons) dominates exports
to the Netherlands (24%), the United Kingdom (19%) and the United Arab Emirates (6%). As the westernmost of the ports measured, Cape Town’s main challenge is strong winds, especially during the summer. Loading and unloading equipment automatically stops if the wind reaches a certain strength, causing delays.
Obtaining construction approvals remains easiest in Cape Town—17 procedures, 88 days, 2.4% of the warehouse value and 12 points on the building quality control index (table 3.1). It is more difficult in Tshwane and Johannesburg, where the process, even though cheaper (2.1% on average), requires three additional procedures and takes two and a half months
The City regularly undertakes business climate diagnostics to ensure the business environment is conducive to stimulate business establishment and growth, and the investment climate is favourable to ensure investment and sustenance of foreign investment.
Cape Town also has a clear strategy to improve on the indicators that the World Bank and other City competitiveness benchmark studies measures, and we are updating and constantly working on the list of interventions to undertake, to ensure that Cape Town is a globally competitive businesses city that is easy to do business in.
The World Bank’s findings follow the recent PriceWaterhouseCoopers (PwC) report naming Cape Town as the top opportunity city in Africa. The report placed Cape Town 6th among middle-income cities, behind Beijing, Kuala Lumpur, Moscow, Shanghai and Mexico City.
The World Bank ranks 190 economies on their ease of doing business annually where a high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a local firm. The rankings are determined by sorting the aggregate distance to frontier scores on 10 topics, each consisting of several indicators, giving equal weight to each topic.
South Africa, with Johannesburg as a proxy, ranks 82 out of 190 economies.
Cape Town has taken part in two subnational Doing Business studies to date – in 2015 and 2018.
Globally, South African locations’ performance is most widely dispersed on dealing with construction permits and getting electricity – highlighting the need to replicate local good practices.
Doing Business rank (1-190 economies)
Source: Doing Business database
Note: The distance to frontier score (DTF) for each indicator shows how far a location is from the best performance achieved by any economy on each Doing Business indicator. The score is normalized to range from 0 to 100 representing the frontier of best practices (The higher the score, the better). For more details, see the chapter “About Doing Business and Doing Business in South Africa 2018.” The OECD averages are based on economy-level data for the 33 OECD high-income economies. The BRIC averages are based on economy-level data for Brazil, the Russian Federation, India and China.