World Bank admits Doing Business errors, suspends report
Mbongeni Mguni | Friday September 4, 2020 14:25
The annual report ranks countries worldwide on their ease of doing business, using indicators such as how long it takes to start a business, how quickly electricity can be connected, ease of visas, permits and licences, taxes, access to credit, contract enforcement and labour market.
The report is used by investors to guide their decisions and governments to enhance their investment climates.
So highly regarded is the annual report that government in 2011 set up a national committee and a Cabinet sub-committee solely aimed at raising the country’s performance. In a statement this week, the World Bank, whose researchers worldwide lead the report’s production each year, said a number of ‘irregularities’ had been reported regarding changes to the data in the Doing Business 2018 and Doing Business 2020 reports.
“The changes in the data were inconsistent with the Doing Business methodology,” the World Bank stated.
“We are conducting a systematic review and assessment of data changes that occurred subsequent to the institutional data review process for the last five Doing Business reports.
“We have asked the World Bank Group’s independent internal audit function to perform an audit of the processes for data collection and review for Doing Business and the controls to safeguard data integrity.”
The World Bank said this year’s Report was ‘paused’ for the time while authorities of the countries most affected by the data irregularities had been contacted.
While BusinessWeek was unable to reach officials at the Botswana National Productivity Centre who directly contribute to the report on behalf of Botswana, other international media reporting on the matter suspect the countries most affected are in South America and Asia.
Analysts commenting on the matter via social media said the World Bank’s probe would focus on issues of incorrect data collection, research and political influence over the rankings at country level.
Critics have said in some countries, the ground-level institutions the World Bank relies on for the report tend to unfairly influence the rankings depending on the leanings of the government in power. Other critics have said the reports’ biggest weakness is that they are based on governments’ promises of what will be done in the investment climate.
This week in Parliament, Trade and Industry minister, Peggy Serame said Botswana remained committed to enhancing its investment climate, which include the Doing Business Reforms. She made no mention of the World Bank’s adjustment of its data.
Botswana’s performance in the Doing Business Report has fluctuated over the years, as it has been outpaced by other more aggressive countries like Rwanda. The Doing Business Report 2020 ranked Rwanda first in Africa and 38th globally, while Botswana was ranked sixth in Africa and 87th globally.
“The ministry will continue with aggressive implementation of the Industrial Development Policy, Doing Business Reforms and Initiatives to transform the economy,” Serame told legislators on Monday. “I must emphasise that this will require that we learn new things, unlearn some and make difficult choices and sacrifices in the short-term.
“This will require us to deepen engagement with strategic partners, while we put in place measures to facilitate citizen economic empowerment.”
The trade ministry has set aside P134 million for the next two financial years for various doing business reforms which include e-government initiatives and a Ministry Management Information System to enable issuance of licences online.