World Bank data scandal bad for Malawi—economist

Economist Gowokani Chijere-Chirwa has described the latest admission by the World Bank Group on the manipulation of its data used in doing business reports as ‘not good’ for Malawi as an investment destination.

On Wednesday last week, World Bank—which is Malawi’s largest multilateral lender with over $1 billion loan portfolio—released the outcome of its audit instituted earlier this year after some of its employees raised concerns through an internal survey about the integrity of data in the annual Doing Business report.

Reacting to the revelation in the context of Malawi, Chijere-Chirwa, who teaches economics at Chancellor College—a constituent college of the University of Malawi, said by favouring other countries, it meant that Malawi was at a disadvantage in terms of overall rankings.

“Most of the international investors use these ranking to make an informed decision before fully committing themselves into injecting capital into the country,” he said.

Chijere-Chirwa said such data manipulation could have affected the country’s tourism sector as the rankings are ‘an advert for Malawi,’ stressing that the country might not have been directly affected by data irregularities.

He said: “As such, a poor advert does not attract consumers, as simple as that.

“In addition, the fact that others have moved in the rankings over the years while we have been stagnating means that investors might have been interested in those countries that were improving in their rankings.”

Malawi is among 190 countries annually assessed in terms of ease of doing business and the rankings are based on a country’s performance on 10 indicators, namely starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

However, in August this year, the bank announced that it was pausing publishing the Doing Business 2021 report to pave the way for an internal audit of reports for the past five years.

The decision to pause the publication was due to the fact that data from Azerbaijan, China, Saudi Arabia and the United Arab Emirates were found to have been inappropriately altered in the 2018 and 2020 reports.

Following internal investigation audit, the World Bank made a rare admission that management pressured staff members to manipulate data used in the report.