At the end of 2020, Benin was named world number 1 in terms of business creation by UNCTAD. This West African country owes this satisfaction in particular to a new business creation platform developed by the Agency for the Promotion of Investments and Exports (APIEx). Laurent Gangbes, managing director of the agency, agreed to comment on the distinction.

Agence Ecofin: Can you briefly introduce APIEx and the work that this agency has been doing for several years?

Laurent Gangbes: APIEx is an agency created by the government to promote investment and facilitate the export of products manufactured in our country.

Laurent Gangbes: "We are so ambitious that the current objective is to be the best everywhere."

We ensure that investors, whether Beninese or foreign, can find in one place all the procedures and information they need to be able to invest in our country and develop their business there.

AE: According to UNCTAD, Benin is, together with Estonia, the country where business creation is the fastest in the world. How do you explain this performance?

LG: This performance makes us happy, even if that does not say everything. Our goal remains to ensure that Benin is filled with investors and that young people can easily find jobs. We will only be completely satisfied when this goal is achieved. Despite everything, we welcome this ranking by a United Nations organization which recognizes that Benin has embarked on a "pro business" direction, which allows companies wishing to set up in the country to easily obtain all the documents they need to operate. This result is the result of the efforts of the government, for its massive investment in digital technology, and APIEx employees.

Investments in the field of fiber, digital and digital gave us the idea of relying on these infrastructures to develop a platform which means that in 20 minutes, people wishing to create businesses can submit all the asked documents. We then have, on our side, 3 hours to carry out the various checks and controls to enable them to be issued the various certificates.

This result is also the result of the efforts of APIEx insofar as we had to revisit all the procedures that were imposed on companies. We removed a good number of them that we no longer considered necessary and which even contributed to making the formalities more difficult, then we lightened other processes. For example, when a woman was looking to start a business in Benin, she was asked to provide her identity card. However, in order for her to obtain her identity card, she was asked for her marriage certificate, which is not asked of men. For us, it was a constraint that had to be lifted, so we broke this lock thanks to the Minister of the Interior who immediately took the decision to impose on all prefectures and town halls no longer require this formality.

“When a woman was looking to set up a business in Benin, she was asked to provide her identity card. However, in order for her to obtain her identity card, we asked her for her marriage certificate, which we do not ask men.

We have also grouped together within APIEx all the State services that issue the documents necessary to create a company. Now they process files from one computer to another, in the same department. There is no more paper support and at the end of the process which lasts a little over 2h30mn, they are able to send the certificates to the promoters. We have also added something rare in public administration: a customer relations service. This aims to support entrepreneurs and promoters in getting started with the platform, in particular by responding to their concerns and guiding them thanks to a team set up for this purpose. It is all these reforms that have earned us today this recognition from UNCTAD economists.

AE: Speaking of this digital platform, it's not the first one that has been set up to create businesses. Are you saying that it's mainly the centralization of services and other changes that make the difference this time around?

LG: In fact, if you set up a new platform without changing the procedures, you do not ensure its success. What is important is that the procedures are rid of all that is redundant. It is not necessary to request the same documents several times. So what made the difference was the grooming work, a better organization of the back-office work, then the implementation of the front-office. These three elements make it easy for promoters to use the platform today.

"What is important is the image that investors may have of your country."

We managed to give success to the platform because we are in a continuous process of improvement. We identified what investors want and how we could organize ourselves to meet those demands. It is therefore not simply a question of tools, but also a question of approach.

AE: According to an IMF report, foreign direct investment (FDI) in Benin represented 3.4% of GDP in 2017, significantly less than the regional average of 5.4%. In your opinion, will the contribution of digital technology in the business creation process improve the interest of foreign companies for the Beninese economy?

LG: I think anything we can do to see Benin as a modern, business-friendly country where it is easy to invest will be beneficial. What is important is the image that investors may have of your country. Have the laws been passed? Aren't there corruption issues? Are there infrastructures? Are investors protected when they have difficulties on the spot? Hence the importance of setting up effective commercial courts. All these elements are appreciated by potential investors and encourage them to invest in the country.

“Have the laws been adopted? Aren't there corruption issues? Are there infrastructures? Are investors protected when they have difficulties on the spot? »

The government's approach, consisting in centralizing within APIEx the elements necessary to support all investors who come to Benin, goes in the same direction as the promotion of FDI. If the procedure for investing in a country remains too complicated for an investor, he will prefer to go to another country. This is the reason why - for our young people, for our companies which can provide subcontracting for these companies which come - we must be very rigorous and ensure that the improvement of the business climate, as a whole , necessarily leads to an increase in FDI. In 2019, for example, we supported around 18 companies whose value of investments in Benin was equivalent to 105 billion FCFA. For 2020, we expect to have a little less due to the Covid-19 crisis, but our goal is to increase to 130 billion FCFA. The idea is therefore to ensure that incessantly, companies continue to invest in Benin.

AE: Speaking of the business climate, we know that business creation is not the only factor. How does APIEx collaborate with tax institutions and the many other services responsible for improving the business climate in general in Benin?

LG: Very clearly, it should be specified that it is we who are essentially responsible for improving the business climate. Actions to improve performance in Doing Business are driven by APIEx.

Now taxes, customs and all related items are very important in the implementation of our agenda. And that's why we collaborate a lot with the Ministry of Finance, because these administrations are under its responsibility and we have excellent relations. There is a structured and organized approach, working groups that meet regularly with a very clear roadmap. On a daily basis, we work to resolve the difficulties of companies, in collaboration with the Ministry of Finance.

AE: Today the most prominent ranking in terms of improving the business climate is the World Bank's Doing business report. Even though it was recently suspended, all countries want to improve their positions in the ranking. Benin being 149th in the last ranking, do you currently have a clear objective in terms of improving its position?

LG: We are so ambitious that the goal right now is to be the best everywhere. What is important for us is to move towards best practices for improving the business climate. We want to be a global reference for companies looking for countries with a favorable investment environment.

"We want to be a global reference for companies looking for countries with a favorable investment environment."

If you set a goal to be 50th and you get there, you can easily tumble the next year. We are we in a constant process. So we didn't give ourselves a performance target; we rather want to be the best. We want the next Doing Business ranking to see a significant leap for Benin.

AE: How do you live with the discredit that there has been in recent months regarding the World Bank's Doing Business ranking?

LG: We are experiencing this situation very calmly. The work we do is not cosmetic. We don't just repaint the facade. Rather, we do substantive work. We are working on the foundations and the architecture of our economy so that our achievements become solid and sustainable. We will take the time it takes to become the best without going through devious means (some of the Doing Business agents said they were pressured to favor certain countries, Editor's note).

AE: Today, does APIEx have a way of checking whether the companies it helps to create are sustainable?

LG: In reality, no one can guarantee that these companies will remain sustainable. People start a business because they either have a market or an expectation of earning more than their tax burden if they hope to stay afloat. Suddenly, if someone creates a business by fad, he will have to bear all these charges. We therefore believe that those who set up their businesses do so with a minimum sense of responsibility, weighing the pros and cons of what they will have to bear in terms of tax in relation to the turnover and profits they could achieve. Even those who create physical person businesses, those who create booths to carry out "mobile money" operations, even if they have not been much educated, still had to make calculations to check whether their business could be viable before deciding to take the plunge.

But, in fact, we often receive a lot of criticism regarding the sustainability of the companies we help to create. Still, I could answer, if I want to be provocative, that it's not really a concern how many businesses are closing. The important thing is that more are created than those that close. We cannot rely solely on the number of businesses that close to say that what we are doing in the area of business creation is not positive. You also have to solve one problem at a time. The first difficulty to which we were trying to find a solution concerned the creation of businesses.

“The important thing is that more are created than those that close. We cannot rely solely on the number of businesses that close to say that what we are doing in the area of business creation is not positive.

Now there are ministries and agencies, whose objective is to ensure that these enterprises are sustainable. But, we can be sure that if we improve the business climate and attract businesses, the number of businesses that close will decrease. This is partly because the foreign companies we attract will not be able to do everything, and will have to outsource some of their activities to local companies and local workers. Thus, the creation of enterprises alone does not guarantee their sustainability. What guarantees it is rather the whole process integrating the creation of companies, the image that this sends back and the improvement of the business environment which will bring in companies, and create a climate in the country to make work as many companies as possible.

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"Create a climate in the country to make the maximum number of companies work."

Between February 17, 2020, the date of the launch of the business creation platform, and November 30, 2020, we recorded a 41% increase in the number of businesses created in Benin compared to 2019. Initially we expected to a fall due in particular to the difficulties associated with handling the tool. However, if this fall was noticed during the first two months, the trend was very quickly reversed during the months that followed. All of this should raise questions for us, because it actually means that there are activities, companies that were not created at the start, which were in the informal sector and which the platform has made it possible to reveal thanks to more easy. All this provides economic data on the country and also allows the Ministry of Finance to improve the tax base.

AE: Today the method of special economic zones, free zones, is quite popular with many countries in Africa; does the APIEx also follow this logic?

LG: In Benin, APIEx is the administrative authority for all the economic zones located on the national territory. Of course, we are convinced that a geographical grouping of companies regardless of any specialization makes it possible to optimize investments. For example, when you have a company moving to one site to manufacture sewer pipes, and another company moving elsewhere to manufacture street signs, each company will come to the state to request access to fiber optics, access to electricity, access to road infrastructures for the transport of goods, access to water, etc. The State which must create these infrastructures will be obliged to do this for each of the companies in question, which does not really rationalize the expenses.

Thanks to the economic zones, the State has the possibility of pooling all the services which may be common to several industries. The State will only make one investment, even if it is a massive investment given the demand that will be generated in the area by the companies that will set up there. It will bring water, electricity, fiber and road to the perimeter of the area.

"Thanks to the economic zones, the State has the possibility of pooling all the services which may be common to several industries."

Thus, for the community, it is much more interesting to have industries that are grouped together, because we can develop services there that will reduce costs for the companies that are inside. This model is therefore interesting for the APIEx, interesting for Benin, because it is a good system which makes it possible to optimize the expenses of the State but also those of the investors.

AE: Benin is today cited as one of the countries where the informal sector occupies a significant part of the economy. It is estimated that more than 90% of jobs in the country are in the informal sector. Today, does this strategy of digitizing the business creation service have a real impact on the incidence of the informal sector in the economy and on the unemployment rate?

LG: At Benin's stage of development, digitalization is an opportunity. If I take the example of the informal sector, digitalization makes it easier to create businesses and therefore the transition of companies that already existed in the informal sector to the formal sector. This is what explains the 41% growth recorded in terms of companies created, thanks to the APIEx platform.

For the country, the fact that many companies are formalizing and becoming legal can make it possible to broaden the tax base, the tax base, because it is important that all activities, all companies, contribute to development from the country. Even those who are in the informal sector understand that they will not be able to settle on the side of the tracks if there is no road. So whoever talks about digitization is talking about economic data, and whoever talks about economic data is talking about improving the approach to corporate taxation.

"For the country, the fact that many companies are formalizing and becoming legal can help broaden the tax base, the tax base, because it is important that all activities, all companies, contribute to the development of the country."

On the other hand, the digitization of the economy opens up new job opportunities for young Beninese, most of whom come from an education system that is not very focused on technical education. So by emphasizing digital infrastructures, the State allows these young people to explore new horizons and better seize employment opportunities.

AE: For the moment, only the UNCTAD article clearly distinguishes Benin as a champion of business creation and we have not yet observed reports from other institutions on the subject. So what does APIEx do to communicate on the work it does in terms of business creation?

LG: There is of course the press, thanks to which we can communicate on our various activities. But in reality it is not the work done by APIEx that interests us. What matters to us is to ensure that the image of our country leads potential investors to take an interest in our economy. The APIEx is only an instrument. The government has made a lot of effort in this direction, in collaboration with foreign partners such as the Kingdom of the Netherlands, which has funded the implementation of the digital business creation platform. It is the international impact that the result of all these efforts will have that will attract investors to our country. The ultimate goal is to see more and more companies come to the country and create jobs.

AE: When do you think Benin's image as a business-creating country will be known around the world?

LG: Already, the UNCTAD distinction is already very significant. It is nevertheless an important agency of the United Nations and therefore it has a global reach. For us, it is already a huge plus to have been noticed positively by this institution and we hope that when the World Bank resumes its ranking, this will manifest itself there too. We also hope that the changes taking place in Benin will be better popularized so that everyone can know what is happening in the country. The objective is therefore for the image of Benin as described in the UNCTAD article to take hold and for investors to come.

AE: How does APIEx manage the personal data of companies that use its platform?

LG: This is an excellent question because in the euphoria of digitization we often forget that behind all this there is data that belongs to people, and that we have no right to do with it. whatever. This is a subject that is quite worrying for us at APIEx level.

"We try to give everyone the possibility of having access to a certain amount of data."

In fact, we have everything about the companies, but we have to make sure that we don't keep this data just for ourselves, because we are the only ones with it. These data can be used to guide economic policies, to know the number of companies in Benin, the number of people they employ, the most dynamic sectors of activity, etc. Today, there are various departments and agencies that may have some of the data in question. What we are trying to do with the platform is to bring together as much information as possible about companies, so that we can make it available to researchers, students, INSAE (National Institute of Statistics and of economic analysis, Editor's note) so that reflections can be carried out in the direction of economic development. We therefore need reliable and secure data. And at APIEx, we try to give everyone the possibility of having access to a certain amount of data.

On the other hand, there are data that we protect, which are data related to the identity of companies, entrepreneurs, etc. But since we are working on a daily basis to ensure that the platform is a real repository of data, we are wondering about the other part of the problem: what data do we deliver to the public and what data do we deliver to professionals?

"But given that we are working daily to ensure that the platform is a real repository of data, we are wondering about the other part of the problem: what data do we deliver to the public and what data do we deliver to professionals? »

So there are three elements. There is the data that we do not deliver, the data that we deliver to the public, and the data that we deliver to professionals. It can be interesting for the public to have data necessary for market studies. This makes it possible to revitalize the economic sectors.

Of course, we will have to set up a much more professional system to protect the data that we do not wish to disclose, because it is an element of trust for the companies that entrust us with their information. We have even already suffered computer attacks which we have resisted, because our platform is solid and we continue to work with the designers of the platform.

AE: Regarding access to data for journalists, will your platform be able to deliver economic information that can be used in the context of major studies, major reports on Beninese economic activity over the next few years?

LG: Of course, that's our goal because if we don't do it, nobody will do it for us. The data is produced by us. Before our digitalization strategy, everything was done physically. So currently, there are a lot of documents that we are integrating into the platform. In a few months, we will normally have integrated all the history of the archives on the companies. So we can access it from the platform.

“And we want to make sure that every year when businesses do their tax returns, that's available on the platform. »

The question that remains to be asked concerns what we deliver and what we keep. We can deliver quantitative data, that's not a problem. But what we are trying to protect is personal data. And we want to make sure that every year, when companies do their tax returns, it's available on the platform. We want to be able to make available all public information concerning the activity of companies, which until now was difficult to obtain. And of course we are open to suggestions from all media professionals who have difficulty obtaining reliable data.

AE: Do you already ask companies to submit their quarterly activity reports on the platform?

We don't do that yet because some companies can give you whatever numbers they want. So we don't want to have to ask them, but we are currently trying to set up a system to obtain this information directly from the Ministry of Economy and Finance.

Interview by Servan Ahougnon and Moutiou Adjibi Nourou