Sunday, October 25, 2020

How Botswana does it with ease in 2016

Botswana’s 2016 ease of doing business based on the economy’s improvements in business regulatory conditions on a measure of ten topics that inform the collective ranking was ticked up slightly by the reformation related to construction permits.

The country’s 2016 rank at 71 out of 190 indicates a marginal improvement from 72 in 2015. The report states as the only reform that happened between June 2015 and June 2016 the elimination of the requirement to submit a rates clearance certificate in obtaining a building permit. Regarding the construction industry Doing Business records all procedures required for a business to build a warehouse, along with the time and cost to complete each procedure.

One might expect a significant change in business regulatory conditions given the impetus persistently propelled by Business Botswana (BB), an Apex body that represents the interests of privately controlled companies in the country, to increase the contribution of the private sector to economic activities. This is particularly so as proponents of the economy argue that the role of government in aiding economic growth and development is limited to how much is in its pocket, of which recently demonstrates a dry up. That being the case, reformations remain somewhat stagnant, as is indicated by the doing business report. The report highlighted ten economies considered to have made the biggest improvements in their business regulations such as Kenya, Belarus, Indonesia, Serbia and Kazakhstan to mention but a few. “Compared to previous years there is a lower number of top improvers from Sub Saharan Africa even though this region accounts for over a quarter of all reforms globally,” cites the report. The sluggishness of the country in making significant changes to the business environment does not reflect an economy desperate to create jobs.

Doing business report shares insight into procedures and the corresponding number of days it takes to complete them specific to each of the ten topics discussed. In the case of Botswana, it takes 9 procedures to start a business over a period of 48 days, which in comparison to the best practice in New Zealand with one procedure over 0.5 days indicates that the Botswana has ample room for improvement. In terms of getting electricity, which refers to procedures required for a business to obtain a permanent electricity connection and supply for a standardized warehouse, it takes four procedures over 77 days, the best practice on the other hand taking three procedures over 18 days. Botswana in this regard fairs well in terms of number of procedures but indicates however that effort can be put in reducing the number of days. Access to electricity in Botswana has been inconsistent due to plant failures in Morupule power plant station, which the country relies on to meet the local demand. The failure of Morupule B contributes negatively to the business environment, hence explaining the marginal improvement of business conditions.

An area of potential which however remains to be reformed is the time and cost associated with compliance with the documentary requirements of all government agencies of the origin economy, the destination economy and any transit economies when exporting goods and services. This also includes the time and cost associated with compliance with the economy’s customs regulations and with regulations relating to other inspections that are mandatory in order for the shipment to cross the economy’s border, as well as the time and cost for handling that takes place at its port or border. Given the small market in Botswana, improving the ease with which goods and services can move opens possibilities and access to outside markets as a source of alternative revenue to businesses. Currently it takes 8 hours for border compliance and 24 hours for documentary compliance.

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