Home | Business | EASE OF DOING BUSINESS BLOW FOR ESWATINI

EASE OF DOING BUSINESS BLOW FOR ESWATINI

Font size: Decrease font Enlarge font

MBABANE - Minister of Commerce, Industry and Trade Manqoba Khumalo’s efforts to position Eswatini as one of Africa’s top investment havens has been dealt a blow.

This follows the World Bank’s decision to throw out its iconic Ease of Doing Business report. The Bretton Woods Institute has discontinued publishing the report, which was the holy grail of global rankings that showed the most welcoming countries for private and business investments.The report was a trusted reference point showing countries that are easy to do business with. The decision to discontinue such a tool comes after some data irregularities in the 2018 and 2020 reports.

Economies

This ranking facility had acquired a prestige label status for most emerging economies and was a key factor in the formulation of economic policies by the individual States. The decision to discontinue the tool was reportedly influenced by an investigation which showed that some of the rankings were manipulated. The investigation involved then World Bank Managing Director (MD) Kristalina Georgieva, who is now with the International Monetary Fund (IMF), and former World Bank President Jim Yong Kim.

The rankings had set in motion far-reaching economic policies that focussed on cutting red tape and relaxing regulations to facilitate faster investments, sparking global competition from countries that were eager to be graded favourably. “After irregularities in data on Ease of Doing Business 2018 and 2020 were reported internally, World Bank management suspended the upcoming report and launched a series of reviews and audits of the report and its methodology,” the World Bank Group has said in a statement.

The confidence placed in the Ease of Doing Business report and its rankings is essential in many developing countries’ efforts to reduce poverty levels and stimulate income-generating investments. Upon assuming office in 2018, Commerce, Industry and Trade Minister Manqoba Khumalo outlined a list of goals to jumpstart Eswatini’s ailing economy.

Goals

One of his top short-term goals was for Eswatini to be ranked among the top 10 countries in Africa in the World Bank’s Ease of Doing Business rankings. The improvement of the Ease of Doing Business ranking was also listed as top priority in the Kingdom of Eswatini’s Strategic Road Map: 2019-2022. Reached for comment, Khumalo said the World Bank had formally informed him about the decision to cease publication of the report. He said such had left him confused on the next available indicator that government would use to measure economic policy reforms.

“I am yet to report it to Cabinet because it was one of the priority goals of the ministry to increase job creation through attracting foreign investors and also encouraging the locals to make more investments,” Khumalo said. He added, “For now, I cannot say what other indicator we will adopt, but I am glad to announce that the ministry, in collaboration with the relevant departments, has made meaningful policy reforms aimed at making Eswatini a preferred investment destination.”

Registration

The minister mentioned the introduction of online registration for companies as one of the milestones worth celebrating. He said the infusion of technology would go a long way in speeding up the process. Khumalo highlighted the payment for trading licences electronically through MTN Mobile Money (MoMo) as another step in the right direction. “We have also successfully established the Small Claims Court and the Commercial Court to protect the interests of investors. Prior to the introduction of these initiatives, it was taking forever for investors to get justice. It is envisaged that the establishment of these courts will ensure that investors do not spend a lot of money and time in dispute settlements,” he said.

On the improvement of cross-trade, Khumalo said the Ngwenya Border Post would soon operate for 24 hours to enhance the flow of import and export goods at the shortest time possible. Meanwhile, the World Bank Group stated: “In the future, we will work on a new approach to assess the business and investment climate. We are deeply grateful to the efforts of the many staff members who have worked diligently to advance the business climate agenda, and we look forward to harnessing their energies and capabilities in new ways.

Reports

“The reports with irregularities were from 2018 to 2020 and showed Eswatini to have slipped from 112 (2017) to 117 out 189 countries. Ease of Doing Business in Eswatini averaged 116.09 between 2008 and 2018. The country reached an all-time high of 124 in 2011 and a record low of 108 in 2015.“The recently-discovered irregularities in the ease of Doing Business reports affected four countries, namely; China, Saudi Arabia, United Arab Emirates and Azerbaijan. “In August 2019, the Doing Business team generated a draft of its list of best improvers for 2020 in which Jordan was the top perfomer with Saudi Arabia ranking second,” the investigation showed.

However, the rankings of the two countries changed in the final report. “The following month, in September 2019, Mr Djankov – then director of DEC – asked the Doing Business team to find a way to change the data so that Jordan fell from first place in the top list of improvers.

Comments (0 posted):

Post your comment comment

Please enter the code you see in the image:

: Political parties
Do you think the political parties system would be good for Eswatini?