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Africa Banking
Survey
kpmg.co.za
This survey is slightly unusual, in that we decided not to simply reproduce a whole host of banking facts
and figures, most of which are freely available off the internet. We decided, instead, to set out a number of
important factors that one might require information on, if considering investment into Africa, particularly in
the banking sector.
Contributing countries had to answer a number of relatively simple questions, and the answers to these
form the bulk of the content of the survey. It is very important to note that these replies are only dipstick
responses, providing cautionary guidance to the reader it should be clear from every countrys response
that detailed professional advice is required in almost every aspect of investment in any African country.
This is true anywhere else in the world, but the array of responses in this survey should demonstrate to
users that Africa is definitely open for business and not as intimidating an investment destination as many
may think.
We strove to edit each countrys responses as little as possible. This provides, even if only slightly, a
flavour of each in terms of linguistic subtleties, applicable laws and culture. To add an objective measure
of the investor-friendliness of each country we have, with grateful permission, added the 2011 Ease of
Doing Business ranking compiled by the World Bank and International Finance Corporation.
While not all African countries took part in this survey, we believe we have sufficient representation from
the core areas of North, West, East, Central and Southern Africa. In future updates, we aim to attract
greater participation and hence add greater value.
Finally, for those who are interested, we have incorporated the summarised financial information of up
to four important banks in each country.
We hope you will find this survey a useful starting point for future investment into Africa!
KPMG
May 2012
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Financial Services | 1
World Bank Ease of Doing Business Ranking (2011): 183 countries surveyed
Population
GDP (nominal)
USD Exchange rate (17/03/012)
Currency
2. Functional Approach
Regardless of a firms legal status, it is regulated by the type of business it
conducts. This means that one legal entity could have several different regulators,
depending on the type of business it conducts.
5. Hybrid Approach
A mixture of the above 4 approaches.
Responses
Some countries elected not to answer all survey questions. Where further information
is required, please contact the nominated in-country KPMG representative.
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Section 1
Regulatory
1.1 Briefly describe the regulatory regime in your country.
For example, who is the principle regulator of the banking
sector? What sort of framework is used (eg Institutional
vs Functional vs Single-Regulator (Integrated) vs
Twin Peaks vs Hybrid approach). For a description of
these, please see Definitions overleaf.
1.2 Does the regulator follow international practice (eg
Basel I, II and III), or some other practice? What is the
status of implementation of the Basel Accords
(if applicable)?
1.3 What is the broad structure of the supervisory body?
How is it managed and controlled? In some countries, this
would fall under the control of the countrys central bank.
Is there a single person responsible for supervision?
1.4 What is the broad process for a banking licence
application in your country? Is there any special protocol
to be followed? How long would a typical licence
approval take? Do non-bank entities in a banking group
require regulatory approval?
1.5 What are the banks broad reporting requirements
in respect of the regulator (eg monthly/quarterly/annual
returns)? Are these standard/ automated/manual?
1.6 Please list the most important banking regulatory
requirements (e.g capital, liquidity, credit, forex, etc) in
your country. What are the regulatory consequences of
non-compliance?
Section 3
People
Section 2
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Financial Services | 3
Section 4
Banking Environment
4.1 What are the major loan and deposit products offered
in your country?
Section 6
Section 5
Physical Environment
5.1 What are the broad principles relating to property
ownership (title, ability to buy, etc).
morocco
mauritania
SNGAL
nigeria
ghana
uganda
KENYA
TANZANIA
zambia
zimbabwe
namibia
botswana
SOUTH AFRICA
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Financial Services | 5
BOTSWANA 6
GHANA 12
KENYA 16
MAURITANIA 24
MAURITIUS 28
MOROCCO 34
NAMIBIA 40
NIGERIA 46
SENEGAL 50
SOUTH AFRICA
56
TANZANIA 60
UGANDA 64
ZAMBIA 70
ZIMBABWE 76
MAURITIUS
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International. MC8241
Section 1
Regulatory
1.1 Regulatory regime
Section 2
Commercial, Legal and Tax Environment
2.1 Process for establishing a new company
The incorporation process has been simplified. To facilitate
the incorporation of a company, a completed application form
must be accompanied by the various stakeholder consents,
and a notice of reservation of the company name.
The Companies Act allows foreign companies incorporated
outside Botswana to register and continue business as if they
had been incorporated in Botswana under the Act.
Capital
Core capital to total unimpaired capital should be at least
50%.
Liquidity
Credit
The Banking Act restricts a bank from granting facilities
that are in excess of 10% of a banks unimpaired capital to
a single or group of related borrowers, without the specific
approval of a banks entire board of directors. Further, a
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Financial Services | 7
52
2 million (2010 estimate)
Gerry Devlin
T: +2673912400
E: gerry.devlin@kpmg.bw
Section 3
People
3.1 Skills availability
There is a general skills shortage, with a resulting high
turnover in staff between banks, and especially if a new
bank enters the market. There are, as a result, issues around
service levels coupled with a generally low productivity.
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3.6 Contractors
The use of contractors is tolerated.
Section 4
Banking Environment
Section 5
Physical Environment
5.1 Property ownership
Property can be either leasehold or freehold. Sectional title
is also permissible. Property may be purchased without
restrictions.
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Financial Services | 9
5.9 Language
English is widely used both spoken and written mainly in the
business circles. Setswana is also widely used both spoken
and written.
Section 6
Governance and reporting Issues
6.1 IFRS implementation
The Companies Act and the Regulators require compliance
with International Financial Reporting Standards (IFRS)
IFRS.
6.3 FATCA
There is no evidence of FATCA implementation in Botswana
to date.
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Financial Services | 11
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Section 1
Regulatory
1.1 Regulatory Regime
The Bank of Ghana has an overall supervisory and regulatory
authority in all matters relating to banking business.
The regulatory regime in Ghana uses the Institutional approach.
Section 2
Commercial, Legal and Tax Environment
2.1 Process for establishing a new company
Potential investors must first register with the Registrar
General Office. The minimum number of shareholders is
one, with at least two directors. One of the directors has to
be present in Ghana at all times. Investors must register with
the Bank of Ghana (if it is a financial institution), and register
with the Ghana Investment Promotion Council (GIPC). Upon
submission of all required documents, the process can take an
average of three to four weeks.
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Financial Services | 13
67
24.2 million (2010 estimate)
Nathaniel Harlley
T: +233302770454
E: nharlley@kpmg.com
Section 3
People
3.1 Skills availability
There are highly educated people in the job market and there
are also many professional bodies active in the fields of
banking, accountancy, marketing and management, whose
members are largely employed in the banking sector. In
addition, the banks continuously assess staff training needs,
and provide appropriate training on a regular basis.
3.6 Contractors
Where Contractors refers to the use of casual or temporary
workers, the Labour Act provides rules for the on-boarding and
remuneration of casual and temporary workers. A temporary
worker employed by the same employer continuously for more
than six months, is treated as a permanent worker.
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Section 4
Banking Environment
4.1 Major loan and deposit products
Loan products
Term loans, mortgage loans, staff loans, overdrafts, leases,
and hire purchase.
Deposit products
Current accounts, time/fixed deposits, savings accounts and
cash collateral.
Section 5
Physical Environment
5.1 Property ownership
Land in Ghana can, and in many cases does, belong to local
communities, which are represented by their chiefs and kings.
The constitution provides for both public land (i.e. land owned
by the state) and private land (i.e. land owned by clans, families
or individuals).
Land cannot be legally acquired as freehold but only as
leasehold. Ghanas constitution provides that non-Ghanaians
are allowed to lease residential, commercial, industrial and
agricultural land for up to 50 years. The property market is
quite open and flexible. Administrative procedures for property
ownership/title and its registration are known to
be bureaucratic and time consuming.
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Section 6
Governance and reporting Issues
6.1 IFRS implementation
All listed and financial institutions are required to report their
financial results in accordance with International Financial
Reporting Standards (IFRS). However, most SMEs have not
yet completely adopted IFRS.
6.3 FATCA
Ghana has not yet implemented FATCA.
5.9 Language
The official language is English, which is also the medium for
education and business. However, most Ghanaians also speak
at least one local language.
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Section 1
Regulatory
1.1 Regulatory Regime
Kenya predominantly uses an institutional regulatory
framework. The banking sector is regulated by the Central
Bank of Kenya (CBK), which was established through an Act
of parliament in 1966 to licence, regulate and supervise banking
operations.
In addition, listed banks are also regulated by the Capital
Markets Authority (CMA).
A license is then issued and the institution can open its doors
to customers.
Licence renewal applications should be made within three
months immediately preceding the expiry of the licence.
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98
41.1 million (2011 estimate)
Eric Aholi
T: +254202806000
E: ericaholi@kpmg.co.ke
Section 2
Commercial, Legal and Tax Environment
2.1 Process for establishing a new company
Broadly the process is:
Submit the proposed name to CBK for approval.
Register the proposed company name with the Registrar of
Companies at the Attorney Generals Chambers.
File the Memorandum and Articles of Association with the
Registrar of Companies who, upon satisfaction, will issue the
Certificate of Incorporation.
Apply in writing to CBK for an operating license.
On satisfaction, CBK will issue a letter to allow
commencement of operations, with a copy to the Treasury.
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The employer should pay the tax via its bankers to the
Paymaster General by the 9th day of the month following the
month to which the income relates.
Section 3
People
3.1 Skills availability
Kenya has a highly skilled workforce, and the banking sector
is able to secure banking staff with relevant training, including
university training and finance-related professional certification.
Additionally, Kenya has returning citizens with international
professional experience to add to an already diverse talent pool.
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Section 4
Banking Environment
4.1 Major loan and deposit products
The loan products offered are mainly categorized as personal
loans and institutional (corporate) loans. Personal loans include
unsecured loans, secured loans and overdrafts, motor loans,
mortgages, home loans, premium financing, and salary
advances, while institutional loans include working capital
loans, commercial motor loans, invoice discounting, contract
financing and overdrafts.
Deposit products offered include call deposits, savings
accounts, current accounts, fixed deposit accounts, student
accounts, investment accounts and salary accounts.
3.6 Contractors
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Section 5
Physical Environment
5.1 Property ownership
Every person has the right, either individually or in association
with others, to acquire and own property of any description and
in any part of Kenya.
A person who is not a citizen may hold land on the basis of
leasehold tenure only, and any such lease, however granted,
shall not exceed ninety-nine years.
Financial Services | 21
5.9 Language
English is widely spoken and the main language of doing
business. Kiswahili is the national language.
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Section 6
Governance and reporting Issues
6.1 IFRS implementation
Kenya Adopted the use of IFRS in 1999. All organizations, in
Kenya including banks, report based on the IFRS framework.
The Institute of Certified Public Accountants carries out
annual competitions covering IFRS, corporate governance and
Corporate Social Responsibility (CSR). Banks have consistently
won the first slot over the 11 years of the competition. This
indicates quite robust reporting standards in the banking sector.
6.3 FATCA
There is no evidence of FATCA implementation in Kenya
to date.
The year end for all banks is 31 December. All banks must
submit their Audited Annual Financial report to the Central Bank
by not later than 31 March.
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Section 1
Regulatory
1.1 Regulatory Regime
The Central Bank of Mauritania is the principle regulator of
the banking sector. The Institutional framework is used
in Mauritania.
Section 2
Commercial, Legal and Tax Environment
2.1 Process for establishing a new company
Registered parties wishing to invest in Mauritania use
a simplified form, attaching duly certified supporting
documents, and a file containing various required documents.
Foreign corporations are required to have a permanent
establishment able to represent them in accordance with the
laws of the Islamic Republic of Mauritania.
Any person is free to create a private company. In the case of
a business corporation, there must be a minimum of seven
shareholders with registered capital of at least MRO 5 million
(USD 18 500). Under Mauritanian law, limited companies
require a minimum of MRO 1 million (USD 3 700) and at least
two partners.
Foreigners wishing to invest in Mauritania must form
companies in accordance with corporate law in Mauritania.
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165
3.1 million (2009 estimate)
VAT is at 14%.
Tax on dividends and interest at 10%.
Tax on royalties at 3%.
Section 3
People
3.1 Skills availability
The educational system was affected by the political
instability of the country. Globalization requires a good
command of English. Unfortunately few managers are fluent
in this language.
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3.6 Contractors
No employer can conclude with the same worker,
successively and without interruption, more than two
fixed-term contracts, or renew more than once a fixedterm contract. However this does not apply to hourly or
daily workers, seasonal workers hired for the duration of
agricultural, commercial, industrial or tourism campaigns,
casual dockers hired for handling work inside the port,
workers hired following increased activity of the company,
workers hired to provide temporary replacement of an
employee whose contract has been legally suspended, and
workers hired temporarily for the purposes of building and
construction works. Note also that the duration of a fixedterm contract cannot exceed two years, renewal included.
Section 5
Physical Environment
Section 4
Banking Environment
4.1 Major loan and deposit products
Loan Products
Real estate, auto, consumption, overdraft facilities, Islamic
finance products, letters of credit and guarantees and
acceptances.
Deposits
Current accounts, saving accounts and term deposits.
Financial Services | 27
5.9 Language
Arabic is the official language, bur French is also widely
spoken. Mauritanians are showing interest in learning and
speaking English.
Section 6
Governance and reporting Issues
6.1 IFRS implementation
For statutory accounts, a Mauritanian chart of accounts is
used. But when reporting for international subsidiaries or
branches, IFRS are used.
6.3 FATCA
There is no evidence of FATCA implementation in Mauritania
to date.
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Section 1
Regulatory
1.1 Regulatory regime
Forex requirement:
Banks should maintain their overall foreign exchange risk
exposure as at the close of each business day to a limit of
15% of their Tier 1 Capital with effect from 4th January 2011.
Section 2
Commercial, Legal and Tax Environment
2.1 Process for establishing a new company
A company incorporated in Mauritius can be either a global
business company (GBC1 or GBC2 license) or a domestic
company.
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20
1.2 million (2011 estimate)
Ashish Ramyead
T: +2304069885
E: aramyead@kpmg.com
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Section 3
People
3.6 Contractors
3.1 Skills availability
Personnel employed in the banking sector in Mauritius tend to
be highly skilled.
Section 4
Banking Environment
4.1 Major loan and deposit products
Banks in Mauritius usually offer the full spectrum of deposit
products from current accounts to term deposits in most
currencies. Advances are offered over and above traditional
overdraft facilities, and most banks provide financing for both
corporate and private requirements. These range from short
to long term loans and multi currency lending facilities.
Others include home loans (limited), fixed deposit, current
accounts, savings accounts, credit cards, online accounts,
mobile banking.
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Financial Services | 31
Section 5
Physical Environment
5.1 Property ownership
Property ownership is regulated by the Registration Duty Act
and the Land (Duties and Taxes) Act.
Foreigners are entitled to purchase and own land in Mauritius.
5.9 Language
Section 6
Governance and reporting Issues
6.1 IFRS implementation
IFRS is widely adopted for the preparation of accounts of
Mauritian Companies. The Mauritian Accounting Standards
also are derived from IFRS.
6.3 FATCA
Mauritius has not yet implemented FATCA.
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Financial Services | 33
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Section 1
Regulatory
1.1 Regulatory Regime
The principal regulator of the banking sector in Morocco is the
Central Bank (Bank Al Maghrib). Exchange transactions are
regulated by the Exchange Authority. The Moroccan Capital
Authority controls organisations that engage in any activity
related to the capital market.
A legal entity could have several different regulators,
depending on the type of business it conducts. Therefore,
the framework used is a Functional approach.
Each quarter, banks should communicate to Bank AlMaghrib on the risks relating to counterparty exposures,
where the amount is equal to or higher than 5% their equity.
Solvency coefficient:
Liquidity coefficient:
Section 2
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114
35.7 million (2012 estimate)
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Section 3
Section 4
People
Banking Environment
Loan products
3.6 Contractors
Companies are authorised to hire contractors, subject to
certain conditions. There is an applied time limit period not
exceeding 12 months, and in exceptional cases 24 months.
When opening a business for the first time, or a new
establishment within the company, or when launching a new
product for the first time in a sector other than agriculture, the
contract can be entered into for a fixed-term of employment
of a maximum period of one year, renewable once.
Financial Services | 37
Section 5
Physical Environment
5.1 Property ownership
Property ownership in Morocco is governed by a number
of laws. Buildings and land are recognized by law as private
(freehold) ownership, only, if they are entered on special
registers, called land books.
5.9 Language
Section 6
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6.3 FATCA
FATCA has not yet been addressed.
Financial Services | 39
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Section 1
Regulatory
1.1 Regulatory Regime
The Bank of Namibia is the Central Bank of Namibia and
regulator of the banking sector.
There are three approaches under Basel II for credit risk, the
standardised approach, the FIRB approach, and the AIRB
approach. The FIRB and AIRB approaches are collectively
referred to as the internal ratings based (IRB) approaches.
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69
2.1 million (2009 estimate)
Section 2
Commercial, Legal and Tax Environment
2.1 Process for establishing a new company
Registering a new company in Namibia requires the applicant
to obtain approval for a company name from the Registrar of
Companies.
Applicants are required to pay the registration fees and buy
revenue stamps at the Receiver of Revenue. Applicants must
hire an attorney to register the company with the Registrar of
Companies and obtain the certificate to commence business.
Various documents are required for submission to the
Registrar of Companies. A trading license must be obtained
from the local municipality. Applicants are also required to
register with the Receiver of Revenue for both VAT and PAYE.
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Section 3
People
3.6 Contractors
The Namibian government has amended legislation to
severely limit or prevent labour hire companies from
operating in the country. This severely impacts on the use of
contractors.
Financial Services | 43
Section 4
Banking Environment
4.1 Major loan and deposit products
Loan products
Mortgage loans / home loans, infrastructure financing in urban
and semi-urban areas, term loans, vehicle and assets finance
(instalment sales), personal loans, student loans and credit
cards.
Deposit products
Savings account, cheque accounts, call accounts / investment
accounts and fixed deposit accounts.
Bonds
Treasury Bills
Equities traded on the Namibian Stock Exchange
The Stock Exchange Control Amendment Act introduced a
stock exchange in Namibia (NSX) which opened in September
1992 and which currently has thirty-seven listings, with a
continually increasing market capitalisation which presently
totals NAD 417.7 billion (USD 54.6 billion).
Namibias banking sector is still mainly in the hands of foreignowned companies, mostly South African. The Central Bank,
the Bank of Namibia, regards Namibian banks as still serving
simply as branches of their South African parent banks.
voluntary; or
subject to the supervision of the Court.
In the event of a company being wound up, every present
and past member shall be liable to contribute to the assets
of the company an amount sufficient for payment of its
debts and liabilities, and the costs, charges, and expenses
of the winding up, and for the adjustment of the rights of
the contributories among themselves, subject to certain
provisions in the Companies Act.
Section 5
Physical Environment
5.1 Property ownership
The Namibian Constitution guarantees all persons the right to
acquire, own and dispose of all forms of property in any part
of Namibia.
From a conveyance perspective, once legally allowed to be in
the country and official permits provide proof thereof, foreign
residents and citizens of Namibia are generally regarded
as having equal status when it comes to the purchase and
possession of land/real estate with the important exception of
agricultural land.
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5.9 Language
Section 6
Governance and reporting Issues
6.1 IFRS implementation
All domestic listed companies in Namibia are required to
comply with International Financial Reporting Standards
(IFRS) effective 1 January 2005, under the requirements
of the Namibian Stock Exchange Act. Unlisted Namibian
companies have the option to apply IFRS or Namibian GAAP.
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Financial Services | 45
6.3 FATCA
There is no evidence of FATCA implementation in Namibia
to date.
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Section 1
Regulatory
1.1 Regulatory Regime
The principal regulator is Central Bank of Nigeria (CBN)
with other regulatory support by the Securities and Exchange
Commission and the Nigeria Deposit Insurance Corporation.
A Hybrid approach is practiced in Nigeria.
Section 2
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Financial Services | 47
137
170.1 million (2012 estimate)
Bisi Lamikanra
T: +23412718962
E: bisi.lamikanra@ng.kpmg.com
Section 3
People
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3.6 Contractors
Contractors are tolerated, but all contracts pass through a
bidding process.
The top four banks are: First Bank of Nigeria, Guaranty Trust
Bank, Zenith Bank and UBA and they account for 44% and
42% of industry assets and deposits respectively.
Hindrances in the current environment include decline in
middle income class, poor risk management, high operating
costs, lack of credit information and a lack of accessible
consolidated financial sector data.
Opportunities in the current environment include finance of
small and medium enterprises, untapped agriculture finance
and the high number of unbanked citizens.
Section 5
Physical Environment
5.2 Transport infrastructure
Section 4
Banking Environment
4.1 Major loan and deposit products
Loan products
Term loans, overdraft, lease financing and invoice discounting.
Deposit products
Early saver account, call deposit account and standard savings
account.
Nigeria is the United States largest trading partner in subSaharan Africa, largely due to the high level of petroleum
imports from Nigeria. Nigeria has an abundant supply of
natural resources, and is the largest producer of oil in Africa.
Nigeria has one of the fastest growing telecommunications
markets in the world, and a highly developed financial
services sector.
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Financial Services | 49
5.9 Language
English is the predominant language in Nigeria and it is widely
spoken and understood for business.
Section 6
Governance and reporting Issues
6.1 IFRS implementation
2010 was a period for awareness, assessment, legislative
changes, training and planning. In 2011 entities prepared IFRS
Opening Statement of Financial Position (SFP), dry runs of
IFRS statements were compiled for listed and SPEs.
6.3 FATCA
Nigerian banks are generally aware of the major requirements
of the FATCA regulations, as the provisions could impact
their businesses. However, the banks are yet to implement
measures to enable them to comply with the requirements of
the FATCA.
Section 1
Regulatory
1.1 Regulatory Regime
The Senegalese banking system is regulated as follows:
the Council of Ministers, which defines the monetary and
credit policy;
the Central Bank of West African States (BCEAO), which
implements the monetary policy, draws up the prudential
and accounting requirement, and monitors the banking
system;
the Banking Commission, which oversees the organization
and the control of banks and financial institutions; and
the Ministry of Finances.
Section 2
Commercial, Legal and Tax Environment
2.1 Process for establishing a new company
In Senegal, start-up times have been considerably shortened
and procedures simplified. The APIX Administrative
Procedures Facilitation Centre (CFPA) can simplify and
perform, on your behalf, all procedures with government and
local authorities, as well as relevant public institutions, all in a
guaranteed time frame. When you (or your agent) present the
deeds and other documents of incorporation, a receipt will be
issued, and 24 hours later you will have registered articles of
organization, the register of commerce and movable capital,
your companys tax registration identification number and the
declaration of establishment.
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Financial Services | 51
152
12.9 million (2011 estimate)
$13.5 billion (2010 estimate)
Section 3
People
3.1 Skills availability
Long convinced that educating and training men and
women creates invaluable wealth for the country, Senegal
spends over a third of its national budget on education. The
country has many primary, secondary and higher education
institutions, public and private. Education is mostly in
French, but also in Arabic or English. Prestigious universities
and foreign schools offer high quality initial and ongoing
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Section 4
Loan Products
Real estate, auto, consumption, overdraft facilities, Islamic
finance products, letters of credit and guarantees and
acceptances.
3.6 Contractors
The duration of a fixed term contract cannot exceed
24 months.
Banking Environment
Deposits
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Financial Services | 53
Section 5
Physical Environment
5.1 Property ownership
Individuals or companies (physical or moral persons),
whatever their nationality, within the framework of the laws in
force, may acquire any rights of whatever nature in property,
concessions or administrative authorizations.
5.9 Language
French is the official and business language. Senegalese are
showing interest in learning and speaking English.
Section 6
Governance and reporting Issues
6.1 IFRS implementation
For statutory accounts, the SYSCOA chart of accounts is used
(regional chart of accounts). But when reporting to group for
international subsidiaries or branches, IFRS is used.
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6.3 FATCA
There is no evidence of FATCA implementation in Senegal to
date.
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Financial Services | 55
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Section 1
Regulatory
Section 2
Commercial, Legal and Tax Environment
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Financial Services | 57
34
50.5 million (2011 estimate)
Richard Buchholz
T: +27 (0)11 647 6204
E: richard.buchholz@kpmg.co.za
Section 3
People
3.1 Skills availability
South Africa has a reasonably well structured Primary,
Secondary and Tertiary educational system. The challenges
are:
Trying to develop a skills base that is representative of the
demographics of the country.
Developing appropriate skills to meet the challenges of a
rapidly developing country.
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3.6 Contractors
Section 4
Banking Environment
4.1 Major loan and deposit products
The major lending products are loans, overdrafts, structured
finance, vehicle and asset finance and home loans.
The major deposit products are current accounts, overnight,
money market notice, call and fixed term deposits.
Section 5
Physical Environment
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Financial Services | 59
Section 6
Governance and reporting Issues
6.1 IFRS implementation
All listed companies are required to prepare their financial
statements in accordance with IFRS. Unlisted companies and
certain others may apply IFRS or SA GAAP (which is consistent
with IFRS), for SMEs.
6.3 FATCA
There are very strict AML laws in South Africa, most specifically
the Financial Intelligence Centre Act (FICA) and the Prevention
of Organised Crime Act (POCA), and all banks are required to
have processes to address the requirements of these.
5.9 Language
English is the main business language in South Africa. There
are 10 other official languages, as recognised in the countrys
Constitution.
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Section 1
Regulatory
1.1 Regulatory regime
The principal regulator in the country is the Central Bank (known
as the Bank of Tanzania) which monitors the operations of all
commercial banks in the country.
The major framework used for monitoring commercial bank is
the Hybrid, whereby the Institutional as well as the Functional
approaches are used. All Banks are monitored by the Bank of
Tanzania. In addition, banks that are listed on the Dar es Salaam
Stock Exchange are also under the supervision of the Capital
Markets and Securities Authority.
Capital requirement:
To start a commercial bank, one should have a total capital not
below TZS 5 billion (USD 3.1 million) which shall be contributed
by at least five people. The limit is in the process of being revised
to TZS 15 billion (Usd 9.3m).
Every bank shall maintain, at a minimum, a core capital and total
capital equivalent to 10% and 12% respectively of its total risk
weighted assets and off balance sheet exposures.
Liquidity:
Every bank shall maintain minimum liquid assets amounting to
not less than 20% of its demand liabilities.
Every bank shall maintain at all times its gross loan portfolio at
levels not exceeding 80% of its total deposit liabilities. Total
deposits shall include local and foreign exchange deposits of
customers, banks, and special deposits.
Credit:
The total amount of credit accommodation which any bank, other
than a microfinance company and financial cooperative, may
grant, directly or indirectly, to any person and his related parties,
is required to be monitored against a number of stringent criteria.
Section 2
Commercial, Legal and Tax Environment
2.1 Process for establishing a new company
An application is made to the Registrar of Companies for the
reservation of a name, accompanied by various prescribed
documents. Once approved, a Certificate of Incorporation is issued.
Applications are made to the Registrar of Companies
in the required format. This process takes approximately
one month.
Once the company is appropriately registered with the Registrar of
Companies, it should be registered for tax purposes. This requires
completion of the respective tax registration forms and submission
of various specified documentation. Thereafter, a business license
must be obtained from the municipal authorities. This takes
approximately five to eight weeks.
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Financial Services | 61
128
43.2 million (2010 estimate)
Ketan Shah
T: +255 22 2118866
E: kshah@kpmg.co.tz
Section 3
People
3.2 Foreign nationals
Under the Licensing regulations of 2008, The Bank of Tanzania
restricts the employment of non Tanzanians to not more than five at
any point in time, for institutions that are under its regulation.
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Section 4
Banking Environment
4.1 Major loan and deposit products
Loan products
Overdraft Facilities, term loans, unsecured loans, auto loans,
mortgages (recently introduced), asset finance / equipment loans,
structured agri-finance, structured trade finance, SME loans, letters
of credit, guarantees and bills for collection.
Deposit products
Section 5
Physical Environment
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Financial Services | 63
5.9 Language
Swahili and English are the official languages, with the national
language being Swahili. English is encouraged as the business
language in the corporate environment. Higher education is
conducted in English.
Section 6
Governance and reporting Issues
6.1 IFRS implementation
All companies are required to prepare financial statements using
International Financial Reporting Standards (IFRS) as prescribed
by the National Board of Accountants and Auditors.
Over the past two decades, Tanzania has been transformed from
a centrally planned/command economy to a market oriented
system, through successful implementation of trade liberalization
measures. The Government has taken deliberate steps to
encourage private sector-led growth through restoration of market
forces, and less interference in commercial activities. These
measures include the privatization of state owned companies,
reduction of tariff and non-tariff barriers. Fiscal/monetary reforms
have opened doors for expansion of private sector operations in all
spheres of business. GDP is estimated at USD 29 billion in 2012.
6.3 FATCA
Tanzania has not implemented FATCA.
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Section 1
Capital Requirements:
Regulatory
Liquidity Requirements:
Credit Requirements:
A financial institution may not grant credit facilities to a
single or a group of individuals which is more than 25% or
more of its total core capital.
A financial institution may not have exposures that exceed
800% of its total capital.
A financial institution should not grant credit facilities to
any of its affiliates and associates, directors, persons with
executive authority, substantial shareholders, or to any of
their related persons or their related interests, except on
terms which are non-preferential.
Non compliance with regulatory requirements results in the
imposition of penalties by the regulator.
Section 2
Commercial, Legal and Tax Environment
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Financial Services | 65
122
32.3 million (2009 estimate)
Benson Ndungu
T: +256414340315
E: bndungu@kpmg.com
Section 3
People
3.1 Skills availability
There are generally no major skills gaps in the market for
low and mid entry points. Most of the low level staff are
university graduates, who learn on job. Skilled resources
can be expensive, and it is sometimes difficult to find senior
experienced bankers.
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3.6 Contractors
Generally there are no restrictions on the use of contractors.
However, the regulator regularly monitors the employment
contracts of all managerial positions for commercial banks.
Section 4
Banking Environment
4.1 Major loan and deposit products
Loan products
Mortgages, working capital loans, personal loans (unsecured
loans based on salary) and card products (card products are
new in the market, and quickly becoming popular).
Deposit products
Current accounts (corporate and individual) and fixed deposits
(time deposits).
Section 5
Physical Environment
5.1 Property ownership
Anyone may own property in their own right irrespective of
their nationality. The only exception relates to land, whereby
a non-Ugandan can only own a leasehold land (this includes
foreign-owned companies).
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Financial Services | 67
The railway system has broken down and now has only
one route that connects the capital Kampala to the port of
Mombasa in the neighbouring Kenya. There are, however,
efforts by the East African governments to revitalise the
railway system.
5.9 Language
English is the official language and is the one used for business
transactions.
Section 6
Governance and reporting Issues
6.1 IFRS implementation
Uganda has adopted International Financial Reporting
Standards (IFRS) fully and has no areas of deviation.
6.3 FATCA
FATCA has not yet been addressed.
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Financial Services | 69
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Section 1
Regulatory
1.1 Regulatory regime
The Bank of Zambia (BOZ) is the Central Bank of Zambia,
and the regulator of the financial services sector.
Section 2
Commercial, Legal and Tax Environment
2.1 Process for establishing a new company
The initial step towards incorporating or registering a
company is to complete a name clearance form requesting for
a particular proposed name to be cleared with the Registrar.
There are a number of required forms and fees payable to the
Registrar. Upon receipt of completed application, the BOZ will
within 180 days make a decision on granting or refusal of the
license.
To operate a bank in Zambia, the bank must be licensed by the
Registrar of banks and financial institutions (the Registrar)
at the BOZ.
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Financial Services | 71
76
12.9 million (2009 estimate)
Dumi Tshuma
T: +260211372900
E: dumitshuma@kpmg.com
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Turnover tax returns and payments are due by the 14th day of
the month following the transaction month.
Section 3
People
3.1 Skills availability
Skills are readily available, and training is offered at a number
of training institutions and colleges offering banking and
finance training. Banks in Zambia have a history of offering
good management development programmes.
3.6 Contractors
There are no specific laws on the use of contractors.
Section 4
Banking Environment
4.1 Major loan and deposit products
Loan products
Bonds, home loans (limited), car loans (limited), personal
loans and credit Cards (limited).
Deposit products
Fixed deposit, current accounts, savings accounts,
transaction accounts, online transact accounts (limited) and
mobile banking (limited).
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Financial Services | 73
Section 5
Physical Environment
5.1 Property ownership
In order to buy property, the buyer must be a Zambian
National, or hold permanent Zambian residency.
A limited company, or a foreigner with written permission
from the Commissioner of Land (who is the custodian of all
land),is also entitled to purchase property).
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5.9 Language
The official language of Zambia is English. English is the
medium of instruction in schools, and is used to conduct
official business.
Section 6
Governance and reporting Issues
6.1 IFRS implementation
International Financial Reporting Standards (IFRS) is widely
applied, as it is the only universal accepted financial reporting
framework in the country.
6.3 FATCA
FATCA has not yet been addressed.
Financial Services | 75
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Section 1
Regulatory
1.1 Regulatory Regime
The single regulator in Zimbabwe is the Reserve Bank of
Zimbabwe (RBZ).
Zimbabwe predominantly uses an Institutional approach,
as all registered banks are regulated by the single regulator.
Where banks are part of a group which includes, for example,
building societies, leasing operations and stock broking
entities, further regulation may be applicable, and thus a
functional approach may be used. For example, stock broking
firms are regulated by the Securities Exchange Commission.
Regulatory capital:
For commercial banking institutions, minimum tier-1 capital
of USD 12.5 million is required.
Liquidity:
Banks should maintain a liquid asset ratio of 30% as a
minimum, sound liquidity and a quality asset book.
Other:
There is currently no predetermined loan to deposit rate
for the market, but banks are persuaded to use internal risk
management processes in deploying resources to quality
assets, pursuant to economic growth.
Currently the country does not have the luxury of using its
own currency.
The functional currency is the United States Dollar. The
other major currency is the South African Rand.
Section 2
Commercial, Legal and Tax Environment
2.1 Process for establishing a new company
An application is made to the Registrar of Companies for the
reservation of a name, accompanied by various prescribed
documents. Once approved, a Certificate of Incorporation
is issued. Applications are made to the Central Bank in the
required format.
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Financial Services | 77
157
12.5 million (2009 estimate)
Themba Mudidi
T: +2634302600
E: tmudidi@kpmg.com
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Section 3
People
3.6 Contractors
The use of contractors is tolerated, provided that the
period of employment is clearly defined in the contract
e.g. three months, six months. This is common in the NonGovernmental Organisations (NGO) sector where there are
donor funds, and the funds usually come for a specific period
and or project. When hiring someone, it is not permitted for
an employee to work for a period of more than three months
without a contract. Should the three months lapse, they are
deemed to become permanent employees.
Section 4
Banking Environment
4.1 Major loan and deposit products
Loan products
Short term loans, overdrafts and bankers acceptances.
Deposit products
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Financial Services | 79
Section 5
Physical Environment
There is a significant housing back log caused by ruralurban migration and expansion in urban settlements. The
Government since 2010 has availed USD 25 million through
the Infrastructure Development Bank of Zimbabwe for
housing projects in various localities.
Education is one of the sectors most affected by the brain drain
as qualified personnel migrated to neighbouring countries.
Prior to 2009, the economic challenges lead to a deterioration
of health infrastructure, loss of experienced health
professionals, drug shortages and a drastic decline in the
quality of health services. The health sector is currently
facing insufficient financial resources to procure essential
medicines, equipment and anti-retroviral therapy.
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5.9 Language
Zimbabwe has three official languages English, Shona, and
Ndebele. The official business language is English.
Section 6
Governance and reporting Issues
6.1 IFRS implementation
Zimbabwe has a very active accounting and auditing
profession. Practising Accountants and Auditors are
registered with the Public Accountants and Auditors Board,
a statutory body.
The accounting framework used in Zimbabwe is International
Financial Reporting Standards (IFRSs), issued by the
International Accounting Standards Board (IASB).
6.3 FATCA
FATCA has not yet been addressed.
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Financial Services | 81
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COUNTRY
BOTSWANA
GHANA
KENYA
MAURITIUS
MOROCCO
NAMIBIA
NIGERIA
SENEGAL
BANK
REPORTING DATE
TOTAL ASSETS
TOTAL LIABILITIES
$000's
$000's
Barclays
31-Dec-10
1591240
1418930
First National
30-Jun-11
1794352
1637788
Stanbic
31-Dec-10
1225381
1169959
Standard Chartered
31-Dec-10
1446257
1361674
Barclays
31-Dec-10
913905
778668
Ecobank
31-Dec-10
849180
722104
Ghana Conmmercial
31-Dec-10
1179419
1039631
Standard Chartered
31-Dec-10
931045
821645
Barclays
31-Dec-10
2055022
1680589
Co-operative Bank
31-Dec-10
1832404
1591995
Equity
31-Dec-10
1593291
1256431
Kenya Commercial
31-Dec-10
2653992
2167563
Barclays
31-Dec-10
3045303
2754838
HSBC
31-Dec-10
1016594
952412
Mauritius Commercial
30-Jun-11
4840136
4528287
30-Jun-11
2863265
2609354
Attijariwafa
31-Dec-10
35878672
32599714
BMCE
31-Dec-10
21900944
20050125
31-Dec-10
25181422
22493858
SG
31-Dec-10
8661697
7782813
Bank Windhoek
30-Jun-10
2091454
1885662
FNB
30-Jun-11
2082079
1848743
Nedbank
31-Dec-10
936748
827658
Standard
31-Dec-10
1870271
1680127
First Bank
31-Dec-10
9405709
10333189
Guaranty
31-Dec-10
4151193
4869509
31-Dec-10
6179666
7960051
Zenith
31-Dec-10
6160266
9218163
CBAO
2010*
1313444
1150832
SGBS
2010*
1174495
1008600
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Financial Services | 83
EQUITY
NET INTEREST
INCOME
NON INTEREST
REVENUE
NET PROFIT
AFTER TAX
$000's
$000's
$000's
$000's
172310
136604
50571
68106
156564
90236
68796
78249
55422
31889
22772
14211
84584
65976
31008
30202
135237
93239
41706
33072
127077
60881
39689
33592
139788
158695
25962
31317
109401
85267
36439
40308
374433
186514
123168
126128
240409
109219
74083
52113
336860
131573
108732
89897
486430
220131
117666
104944
290465
74906
83668
78331
64194
21453
17830
13152
587206
416319
38717
148779
453604
232058
48932
60179
3278958
1041157
638479
555099
1850819
568214
289042
166676
2686363
919144
230597
358392
878884
315792
114252
130628
204769
87835
60401
42982
233337
109939
82219
56791
109090
46381
26452
18755
190144
65775
73803
40997
2184199
82859
83832
172666
1315177
486024
30424
234048
1203398
403378
290558
13891
2310345
538263
62455
213685
162612
84549
12249
15269
165895
65030
36192
33413
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COUNTRY
SOUTH AFRICA
TANZANIA
UGANDA
ZAMBIA
ZIMBABWE
BANK
Absa
REPORTING DATE
31-Dec-11
TOTAL ASSETS
TOTAL LIABILITIES
$000's
$000's
102666830
93739977
FirstRand
30-Jun-11
91369053
82697850
Nedbank
31-Dec-11
84580574
77705181
Standard
31-Dec-11
195414615
179490614
CRDB
30-Sep-11
1623926
1456090
30-Sep-11
2329357
2169963
National Microfinance
30-Sep-11
1377438
1211523
NBC
30-Sep-11
1003946
899302
Citibank
31-Dec-10
264754
208818
CRDB
31-Dec-10
322895
276666
Stanbic
31-Dec-10
960059
868028
Standard Chartered
31-Dec-10
722894
631098
Barclays
31-Dec-11
863965
793488
Stanbic
31-Dec-11
798944
752840
Standard Chartered
31-Dec-11
871278
800418
31-Dec-11
877088
780371
BancABC
31-Dec-11
379384
343888
CBZ
31-Dec-11
981767
903500
Stanbic
31-Dec-11
361404
326856
Standard Chartered
31-Dec-11
325106
271109
Note 4: Although these figures were extracted from the public domain, some may be unaudited
Note 5: All numbers are translated as at 17 March 2012 with the exception of Nigeria where date of translation
is 31 December 2010
Note *: Senegal not on IFRS
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Financial Services | 85
EQUITY
NET INTEREST
INCOME
NON INTEREST
REVENUE
NET PROFIT
AFTER TAX
$000's
$000's
$000's
$000's
8926853
3187985
2793092
1329012
8671203
2675381
3111642
1533636
6875393
2353437
2011266
848642
15924002
3761924
3879113
1590665
167834
24476
15021
10651
159394
14545
12346
7191
165914
29366
13728
12396
104643
13728
9011
5089
55935
11576
9056
10515
46229
36424
11689
11759
92035
69084
46564
28833
91796
48898
26421
29208
70477
57168
44306
34716
46104
43034
40193
14550
70860
48908
44828
25166
96717
73949
43482
23291
35496
19876
16584
7253
78267
70631
35153
24698
34548
25342
31046
11146
53997
14481
45778
21990
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Contacts
Botswana
Nigeria
Gerry Devlin
T: +2673912400
E: gerry.devlin@kpmg.bw
Bisi Lamikanra
T: +23412718962
E: bisi.lamikanra@ng.kpmg.com
Ghana
Senegal
Nathaniel Harlley
T: +233302770454
E: nharlley@kpmg.com
Kenya
South Africa
Eric Aholi
T: +254202806000
E: ericaholi@kpmg.co.ke
Richard Buchholz
T: +27116476204
E: richard.buchholz@kpmg.co.za
Mauritania
Tanzania
Ketan Shah
T: +255 22 2118866
E: kshah@kpmg.co.tz
Mauritius
Uganda
Ashish Ramyead
T: +2304069885
E: aramyead@kpmg.com
Morocco
Jamal Saad El Idrissi
T: +212537633702
E: jsaadelidrissi@kpmg.com
Namibia
Silvia Rosado
T: +26461387500
E: srosado@kpmg.com
Benson Ndungu
T: +256414340315
E: bndungu@kpmg.com
Zambia
Dumi Tshuma
T: +260211372900
E: dumitshuma@kpmg.com
Zimbabwe
Themba Mudidi
T: +2634302600
E: tmudidi@kpmg.com
We acknowledge with thanks the permission we have received to publish the Ease of Doing Business Rank 2011 which formed part of a co-publication by The World Bank and The
International Finance Corporation entitled Doing Business in 2011 Making a Difference for Entrepreneurs ( 2010 The International Bank for Reconstruction and Development/World Bank).
The Ease of Doing Business Rank is a worldwide ranking, based on 9 criteria, being Starting a Business, Dealing With Construction Permits, Registering Property, Getting Credit, Protecting
Investors, Paying Taxes, Trading Across Borders, Enforcing Contracts and Closing a Business. The survey included data from 183 countries.
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makes any representation concerning the accuracy and completeness of any such information contained or provided herein.
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