Lesotho drops 16 places in global Doing Business rankings

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Bereng Mpaki

LESOTHO has slid 16 places to 122 from 106 in the latest annual World Bank Doing Business rankings.

The World Bank’s Doing Business rankings come out of a study that investigates the regulations that enhance business activity and those that constrain it.

Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 190 economies over time.

Regulations affecting 12 areas of the life of a business are covered in the study. These include starting a business; dealing with construction permits; getting electricity; registering property; getting credit; protecting minority investors; paying taxes; trading across borders; enforcing contracts; resolving insolvency; employing workers; and contracting with the government.

The indicators are used to analyse economic outcomes and identify what reforms of business regulation have worked, where and why.

Chaba Mokuku, the project manager of the World Bank funded Private Sector Competitiveness and Economic Diversification project (PSCEDP), said the country’s performance was not overly bad as there were areas that it performed well.

PSCEDP implements a number of interventions in the country to improve the business environment to facilitate private sector investment in Lesotho.

“We may have dropped in all the areas except on starting a business and dealing with construction permits,” Mr Mokuku said.

“This means that while other countries were able to come up with interventions that facilitate business activity, we were mostly stuck and unable to do the same thing.”

Despite this, Mr Mokuku said Lesotho has managed to perform better than its southern African counterparts in starting a business.

In this regard, Lesotho ranks 84 out of 190 economies having moved up 35 places. South Africa ranks 139, Botswana ranks 159, Namibia ranked 165 and Eswatini ranked 155 out for 190 economies.

The study said Lesotho made starting a business easier by removing the requirement for a health certificate and the inspection of the premises for all businesses.

“It is easier to start a business in Lesotho than in the region and this is a massive marketing message that we should make some noise about,” Mr Mokuku said.

Mr Mokuku also said Lesotho’s overall doing business ranking had improved over the past decade, despite the notable political instability.

“Our performance over the past 10 years has generally improved. In 2010 we ranked 142 and in 2020 we are ranking 122. This is a clear indication that we have a huge potential, as all that happened despite the political situation we had had in the country.”

In 2016, Lesotho reached its highest ever ranking by notching at position 100 after reforming its computerised business registration system to an online system.

 

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