Faster reforms required around doing business

Mmegi Editor | Wednesday November 5, 2014 11:53

The Doing Business report sheds light on how easy or difficult it is for an entrepreneur to open and run a small to medium-size business when complying with relevant regulations.

According to the 2015 report, Botswana has slipped eight positions down the rankings with paying taxes, access to electricity and credit cited as among the major hindrances to conducting business in the country.  From the 189 countries surveyed globally, Botswana is now placed at position 74 from a revised position of 66 last year.

Ministry officials will be disappointed that Botswana’s fall in rankings comes after numerous reforms initiated in the last four years, through the formation of a Doing Business Cabinet subcommittee as well as the National Doing Business Committee.

Evidence shows that Botswana’s business environment has actually not regressed but that other countries are implementing reforms at a much faster rate than Botswana. According to the report, Botswana registered a marginal rise in the doing business score to 64.9 points from 64.7 points last year, suggesting that other countries are effecting reforms to the ease of doing business at a quicker pace.

This clearly shows that while the numerous reforms we have introduced are welcome, others are doing a much better job in making their business environment more conducive for the investor.

This why countries such as Rwanda and Ghana have overtaken us in the past few years on the rankings and the disappointing report should only act as motivation for the government to up its game.

The 2015 report, for example, shows that just like in the 2014 edition, it still takes up to 60 hours and 10 procedures to start a business in Botswana. This is significantly above countries such as Mauritius where it takes only five procedures and 10 hours to start a business.

On paying taxes, businesses in Botswana on average pay taxes at least 34 times a year spending 152 hours in the process. This is far above Mauritius and South Africa where businesses only pay taxes between eight and seven times a year respectively.

With Botswana FDI attraction continuously going down in the past few years, a new approach will be needed to either reinforce the reforms or introduce a new approach as other countries have done. The fact that five of the top 10 most improved countries are located in sub-Saharan Africa indicates that this region is the most aggressive in the race for global investment.

Botswana will need to do more to outdo its peers especially as competition for FDI is continuously rising due to the slow recovery of the developed world from the 2009 crisis.

                                                            Today’s thought

“More of the same will just produce more of the same: less competitiveness, less growth, fewer jobs.”

 

                                             - David Cameron