Malawi slips on ease of doing business report

Malawi has slipped six steps from 151 to 157 on 2013 World Bank’s Ease of Doing Business 2013 (DB 13).

The report ranks 185 economies based on ease of doing business in registering property, getting electricity, protecting investors, enforcing contracts and trading across borders among others.

Market analyst James Chikavu Nyirenda in an interview on Tuesday said Malawi needs to harmonise laws to create a conducive business climate.

“We need to improve and harmonise our business laws. Let us look at Rwanda, for instance, which is one of the best performing economies in Africa and see why [Rwanda] is doing well. Let us look at the criteria on the ease of doing business one by one and focus on improving these,” he said.

Nyirenda added that if business environment is improved, government will benefit in form of increased income taxes and be able to meet its social responsibilities.

Economic Empowerment Action Group (EEAG) chairperson Lewis Chiwalo said the fall in the ranking means Malawi cannot create wealth.

“This will have a negative impact on people’s lives by worsening poverty levels since businesses create wealth” Said Chiwalo.

In the report, Malawi has also slipped 28 steps on paying taxes, three steps on registering property, protecting investors and trading across borders.

DB13, however, shows that the country has improved on enforcing contracts and resolving insolvency by one step.

The report notes also that Malawi introduced new taxes, improved customs administration, made dealing with construction permits more expensive and introduced a mandatory pension contribution for companies.

It adds that trading across borders became easier, courtesy of improvements in customs clearance procedures and transport links between the port of Beira in Mozambique and Blantyre.

Minister of Climate Change and Environmental Affairs Catherine Gotani Hara was quoted in The Nation of Tuesday as saying bureaucracy in the country worsens the ease of doing business.

Institute of Bankers in Malawi (IOB) executive director Lyness Nkungula said on Friday that high taxes on some equipment, poor infrastructure such as roads, poor telecommunication services, intermittent power and water supply cripple business operation in the country.

In the region, South Africa tops the ranking at 39 in the world, Rwanda on 52, Botswana on 59, Zambia on 94 and Mozambique on 147.

Below Malawi are Angola on 172, Angola on 172, Zimbabwe on 173, Democratic Republic of Congo 181 and Republic of Congo at 183.