1. What is the SNDB programme?

The Sub-National Doing Business (SNDB) reform programme is the Metropolitan municipality (Metro)-level, local equivalent of the World Bank’s annual flagship publication, Doing Business (DB). DB provides a measure of the ‘ease of Doing Business’ in 190 countries through a set of objective indicators that focus on the impact of laws and regulations (and their enforcement) on the ease of Doing Business for domestic firms in 11 areas – starting a business, dealing with construction permits, getting electricity, registering property, trading across borders, and enforcing contracts – construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency. The City of Johannesburg is South Africa’s proxy for the DB Survey. The SNDB programme supports metros in terms of their areas of responsibility in the three indicator areas where they perform a specific role, namely Registering Property, Dealing with Construction Permits and Getting Electricity.

2. What does the SNDB measure?

Doing Business South Africa 2015 was undertaken by the World Bank at the request of the South African government. The report measured the business regulation environment across 9 cities (Buffalo City, Cape Town, Ekurhuleni, eThekwini, Johannesburg, Mangaung, Msunduzi, Nelson Mandela Bay and Tshwane) and 4 maritime ports (Cape Town, Durban, Ngqura and Port Elizabeth) in 6 Doing Business indicators that show regional variation – starting a business, dealing with construction permits, getting electricity, registering property, trading across borders, and enforcing contracts. The second sub-national Doing Business study in South Africa, Doing Business SA 2018 (published in September 2018) updated the data for these locations.

In order to improve the DB performance of the metros, a comprehensive metro reform programme has been implemented since 2015 that is focused on reducing the time, cost, number of procedures related to three DB indicators – dealing with construction permits, getting electricity, and registering property.

The support has focused on:

  • City-to-city peer learning events;
  • Developing robust city-level Reform Action Plans (RAPs) for each of the 3 SNDB indicators, have these signed by the
  • City Manager and submit to National Treasury, enforcing accountability;
  • Quarterly progress reporting on the implementation of the Reform Action Plans; and
  • Engagement with international and local technical experts to improve and update these Reform Action Plans.

3. Why is the SNDB Programme important?

Improving the competitiveness and performance of our metro economies is key to SA’s national economic recovery. The eight metropolitan municipalities in South Africa are the focus for driving and measuring DB reforms in the country given the fact that they collectively contribute more than half of national employment and GDP.

The City of Johannesburg is the proxy city for the Doing Business survey in South Africa given the fact that it has the largest city economy. Metros have direct influence over 3 of the 11 DB indicator areas, namely: Dealing with Construction Permits, Registering Property and Getting Electricity. These 3 indicators relate to the process of finding and securing a business location within the life-cycle of a firm.

The Doing Business and SNDB scores are inherently related. They are both critical to the attractiveness of SA as an investment destination, the value of the programme lies in the national and sub-national reforms that are being driven that are addressing existing inefficiencies and weaknesses within government’s businesses and regulations that undermine the competitiveness of the country and metros.

In South Africa there are good practices to be found on various indicators across cities. For example, according to the subnational doing business report, combining South Africa’s subnational good practices in dealing with construction permits, getting electricity and enforcing contracts would improve South Africa’s score above the OECD high-income economy average on all 3 indicators. This is an important opportunity whereby tangible improvements can be achieved by introducing measures already successfully implemented elsewhere in South Africa.

With global inward investment flows under real pressure WBG FDI Monitor 2021, says global FDI flows down 42% YoY, the competition over FDI has become increasingly fierce and cities are at the heart of this competition in terms of their location attractiveness. Such pressure on global investment highlight the benefits of supporting the existing base of investors in the country and creating the needed business environment for them to expand and grow. Creating an enabling business environment is critical to encourage investment generation, expansion and retention is critical for job creation in our country.

4. How does South African government implement reforms?

The implementation of DB and SNDB reforms requires public sector departments, agencies and the metros to prioritise these actions and commitment and integrate these reforms into their respective plans and budgets. It also requires the public sector to build relations with the private sector within all spheres and to co-design the required reforms and communicate progress in the implementation thereof.

As part of SA’s National Economic Recovery Plan, government has prioritised the DB reform agenda and is holding relevant sector departments and agencies to account for implementing the reforms that they are responsible for. In the same manner, the Presidency will hold the city political and administrative leadership to account for the implementation of the required SNDB reforms.

The SNDB programme is implemented in partnership with the Ministry of Finance also known as National Treasury, the World Bank and SECO.