B.E. Assessment

Cutting the Cost of Red Tape for Business Growth in Rwanda, 2008

    Description
    This study identifies key regulatory areas and administrative procedures in Rwanda that are burdensome to business, and quantifies the costs of complying with these regulations for firms of different sizes in the various sectors, and for the economy a whole.



    Methods for info gathering
    The study was based on a country-wide survey of 400 formal-sector businesses, ranging from large corporations to small enterprises.

    Summary of results
    The study finds that 90 per cent of the compliance costs are associated with tax, as well as importing and exporting, where delays at Customs and the Bureau of Standards account for the largest component of compliance costs. Overall, small firm bear the heaviest burden: for example, tax compliance costs per employee were found to be almost seven times higher for micro firms than for larger firms. Economy-wide, Rwandan businesses incurred regulatory compliance costs of at least RwF 55 billion, which, for example, almost equals the government's health budget. The study provides policy recommendations on the basis of these findings.