THE WORLD BANK: Mixed reaction to WB`s Doing Business reports

BY CORRESPONDENT

15th January 2013

World bank

 The World Bank and International Finance Corporation (IFC) annual reports on “Doing Business and Measuring Business Regulations” in the East Africa have received mixed reaction, with some experts dismissing them, while others urge the governments to seriously address the issues raised in them.

University of Dar es Salaam (UDSM) Senior Lecturer Dr Bashiru Ally said the world financial institutions are paving the way for multinational companies from developed countries to come and invest in developing countries in all key sectors of the economy.

“African leaders and entrepreneurs should rethink on how to control their growing economies in this era of technology, globalisation and investments,” he said, adding that international financial institutions’ eyes are on the rich African resources available in every sector such as mining, fishing, fertile land, construction, trade as well as in the public services.

Dr Bashiru argues that with proper regulatory reforms which will foster social and economic development, Africans can rehabilitate their economies by themselves.

But Hussein Kamote who is the Director of Policy and Advocacy from Confederation of Tanzania industries (CTI) differs: “These reports on doing business in Africa and East Africa feature what is really happening on the ground in most of the developing countries.”

He cites corruption, bureaucracy and the red tape as the major blocks to investment, especially foreign direct investment in Tanzania.

“Some of the business people nowadays go to neighboring countries such as Rwanda, Namibia, Mozambique and Zambia where there is less bureaucracy and opportunities are available,” says Kamote.

Kamote gave the example of investors in the textile industry who shifted from Tanzania to Mozambique due to the red tape in the country.

He said in Tanzania the process of registering companies or getting business licenses is more cumbersome when compared to other East African countries such as Rwanda which has for the last two years attracted foreign investors in tourism, construction and other key sectors.

Kamote said that the reports on doing business in Africa provide opportunity for African governments to re view the overall system governing businesses in the country.

For his part David Mbulumi from the United Nations Development Programme (UNDP) says the IMF and the World Bank reports for Africa don’t reflect the reality on the ground in the continent.

He says the reports are not applicable in the most of the developing nations due to the fact that the criteria used by the institutions to carry out the survey are not suitable for the African environment.

“I am a bit skeptical over these reports because they are using the same criteria worldwide, while Africa and Europe have different cultures, values, business and environment. It is not fair to put them in the same basket,” he said.

Mbulumi added that although these reports outlined the weaknesses in registering and starting up business, bureaucracy in getting construction permit and the cost of doing business in African countries, sometimes the studies were biased.

He said it is not fair to match developed and developing countries in regulatory reforms, law and order, technology, infrastructure and capital for investment.

Christopher Singa who is a lawyer noted improvements, saying that according to IFC and the World Bank report on doing business 2012/2013 the East African governments including Tanzania were praised for undertaking a number of regulatory reforms that have improved the environment for local businesses.

Singa added that continuous improvement of the business environment is important for economies seeking to benefit from increased trade and investment through regional integration.

SOURCE: THE GUARDIAN