Ease to start a business is one of the key policy-area (elements) underpinned in the Legatum prosperity index. The figure above shows the respective scores on the ease to start a business among EAC partner states; Tanzania scored 74.4 while Rwanda scored 93.2 followed by Burundi and Kenya which scored 92.9 and 82.7 respectively. The least-performing countries in ease of starting a business were Uganda, South Sudan, and the Democratic Republic of Congo as they scored 71.4, 71.0, and 65.8 respectively. The analysis establishes the difference in scores between these countries; this indicates that some countries are doing well in this element than others.

Despite the sustained economic growth achieved in Tanzania over the last two decades, the country’s score in this element is not significant. Information across sources identifies challenges such as high tax rates and excessive bureaucracy in registering new businesses among others to be the roadblocks to the ease to start a business in Tanzania.

Learning from the best-performing countries in this aspect; favorable policies, low business start-up costs and the relaxation of procedures required to start a business have contributed to the good performance of these countries. For instance, it takes just two procedures and three days to start a business in Rwanda and it takes less time to transfer properties.

Ultimately, to improve the ease to start a business in Tanzania, the government should strengthen its administrative machinery, Increase the use of ICT to reduce the time taken to register new businesses such as issuing electronic business licenses and permits, and enact laws to protect young entrepreneurs and new start-up businesses. Furthermore, the government should cut tax rates for newly established businesses to attract more people to start a business.