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IFC and OHADA 1 IFC's OHADA Investment Climate Program (2007-2017) An Impact Assessment of OHADA Reforms Uniform Acts on Commercial, Company, Secured Transactions, and Insolvency Public Disclosure Authorized 4 5 4 Mali Niger Chad 6 Public Disclosure Authorized Senegal 5 Guinea 4 Bissau Burkina Faso 5 Guinea Togo 4 5 Benin 4 5 Central African Rep Cameroon Cóte d’Ivoire 4 Equitorial 3 Rep of Guinea Congo DRC Gabon 4 3 5 # OHADA reforms as reflected by the Doing Business Report (2012-2017) Public Disclosure Authorized 5 Comoros Public Disclosure Authorized MINISTÈRE DE L’ÉCONOMIE ET DES FINANCES 2 3 © 2018 International Finance Corporation / OHADA Permanent Secretariat 2121 Pennsylvania Avenue NW Washington, D.C. 20433 Internet: www.ifc.org Some rights reserved This is a co-publication of the International Finance Corporation and the OHADA Permanent Secretariat. This work is a product of the staff of the International Finance Corporation, the OHADA Permanent Secretariat, ECOPA, and ECONOMISTI ASSOCIATI. Note that the International Finance Corporation and the OHADA Permanent Secretariat do not necessarily own each component of the content included in the work. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the International Finance Corporation, its Board of Executive Directors, or the governments they represent, nor does it represent those of the OHADA Permanent Secretariat. The International Finance Corporation and the OHADA Permanent Secretariat do not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the International Finance Corporation or the OHADA Permanent Secretariat concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of the International Finance Corporation and the OHADA Permanent Secretariat, all of which are specifically reserved. The publishers do not warrant that this work or its use will not infringe on the rights of third parties, and any claims as such rest solely with the reader. Rights and Permissions cc By This work is available under the Creative Commons Attribution 3.0 Unported license (CC BY 3.0) http://creativecommons.org/licenses/by/3.0. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution - Please cite the work as follows: IFC’s OHADA Investment Climate Program (2007-2017). An Impact Assessment of OHADA Reforms Uniform Acts on Commercial, Company, Secured Transactions, and Insolvency License: Creative Commons Attribution CC BY 3.0 Translations - If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by the International Finance Corporation or the OHADA Permanent Secretariat and should not be considered an official translation. The International Finance Corporation and the OHADA Permanent Secretariat shall not be liable for any content or error in this translation. All queries on rights and licenses should be addressed to the Office of the Publisher, the International Financial Corporation, 2121 Pennsylvania Avenue, NW Washington, D.C. 20433, USA; fax: 202-522-2625; e-mail: [email protected]. Design and Layout: 5ive Limited. 4 International Finance Corporation’s OHADA Investment Climate Program (2007-2017) An Impact Assessment of OHADA Reforms Uniform Acts on Commercial, Company, Secured Transactions, and Insolvency AN INDEPENDENT EVALUATION BY ECOPA AND ECONOMISITI ASSOCIATI December 2018 BENIN BURKINA FASO CAMEROON CENTERAL AFRICAN REPUBLIC CHAD COMOROS CÓTE D’IVOIRE DEMOCRATIC REPUBLIC OF CONGO EQUITORIAL GUINEA GABON GUINEA GUINEA-BISSAU MALI NIGER REPUBLIC OF CONGO GABON SENEGAL TOGO Contents 5 CONTENTS FOREWORD ...............................................................................................................6 ACKNOWLEDGMENTS .................................................................................................7 ABBREVIATIONS .........................................................................................................8 LIST OF TABLES ..........................................................................................................9 EXECUTIVE SUMMARY ................................................................................................11 A. INTRODUCTION .....................................................................................................16 B. METHODOLOGY .....................................................................................................19 THE SYNTHETIC CONTROL METHOD ........................................................................19 BUSINESS COST SAVINGS ........................................................................................20 COUNTRY-LEVEL ANALYSIS .....................................................................................20 C. IMPLEMENTATION ..................................................................................................22 REFORM: UNIFORM ACT ON GENERAL COMMERCIAL LAW ........................................22 REFORM: UNIFORM ACT ON SECURED TRANSACTIONS ............................................24 REFORM: UNIFORM ACT ON COMPANY LAW ...........................................................25 REFORM: UNIFORM ACT ON INSOLVENCY ...............................................................28 IMPLEMENTATION OF FOUR UAS AS REFLECTED IN DOING BUSINESS REPORTS ..........29 D. IMPACT ..................................................................................................................31 1. ACCESS TO FINANCE ............................................................................................31 2. BUSINESS REGISTRATION ....................................................................................46 3. BUSINESS SECTOR COST SAVINGS ........................................................................54 4. INSOLVENCY RESOLUTION ..................................................................................56 5. MARKET CREATION ............................................................................................57 E. KEY LESSONS ..........................................................................................................59 LESSON 1: FOCUSING ON CORE COMPETENCIES .......................................................59 LESSON 2: ALIGNING NATIONAL INTEREST AT THE REGIONAL LEVEL ...........................60 LESSON 3: SYSTEMATICALLY MONITORING OUTCOMES AND IMPACT ..........................61 LESSON 4: LEGAL SECURITY VERSUS JUDICIAL SECURITY ...........................................62 F. CONCLUSIONS AND RECOMMENDATIONS .................................................................64 CONCLUSIONS ......................................................................................................64 RECOMMENDATIONS .............................................................................................66 REFERENCES..............................................................................................................68 APPENDICES .........................................................................................................70 APPENDIX 1. ADDITIONAL OUTPUT FROM SCM ANALYSIS ..........................................70 APPENDIX 2. BUSINESS COST SAVINGS ....................................................................77 APPENDIX 3. CASE STUDIES ....................................................................................84 APPENDIX 4. CASE STUDY QUESTIONNAIRES ............................................................97 APPENDIX 5. SUMMARY OF PEOPLE MET ..................................................................104 6 Foreword FOREWORD The Organisation for the Harmonization of Business Law in Africa (OHADA) and International Finance Corporation (IFC) have always aspired to create a better environment for businesses to thrive. Working together, we have demonstrated how regional economic integration can help create markets, and how modernized, uniform legal and regulatory frameworks make it easier for businesses to flourish in OHADA member states. This report is a significant milestone for our institutions, as it is the first time that a rigorous evaluation has been carried out to measure the impact of OHADA’s initiative. IFC is proud to be a part of this important exercise alongside OHADA and member states. Assessing impact is a key part of IFC’s strategy, and this independent evaluation makes a clear case for IFC’s role in helping our partners create the right conditions for the private sector to have development impact. Looking at four OHADA Uniform Act reforms, this report finds that they have had significant success in improving access to finance, business registration, and cost savings – all important hurdles that need to be overcome for a country to improve its business environment and investment climate. Most notably, the OHADA Uniform Act on Secured Transactions led to $3.82 billion domestic credit to the private sector in seven member states between 2011 and 2015. The impact of the reform is especially encouraging in the context of conflict-affected countries, where mobilizing private resources is hugely
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