Times Of Swaziland: EASE OF DOING BUSINESS BLOW FOR ESWATINI

EASE OF DOING BUSINESS BLOW FOR ESWATINI
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BY TIMES REPORTER on 14/10/2021 08:16:00


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.