Malawi improves on latest Doing Business Index

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By Earlene Chimoyo

The World Bank is appealing to the Malawi government to further improve its business regulations towards achieving job creation. 

The call comes in line with the latest Doing Business Index in which Malawi has improved and moved two spots up to seat on position 109 in the world. The index is a global indicator of strides that various countries are making towards improving the business environment. 

Commenting on Malawi’s position, the bank’s Country Manager for Malawi Greg Toulmin states that improving the business environment will be crucial to delivering the government’s commitment to create jobs for young people hence the recent rating is good news.

The global financiers and economic advisors assess factors such as starting a business, accessing electricity and credit, finding employment, dealing with construction permits, registering property, cross border trade, paying taxes as well as protection of minority investors.

Malawi has so far been making strides in easing access to credit with the low interests rates, which has seen some commercial banks registering an increase in the number of people and firms visiting to get loans.

Toulmin explains that they are happy that Malawi has overall, improved its business regulations and in absolute terms, is narrowing the gap with global regulatory best practice. In the previous index rating Malawi, managed to register two reforms.

In the recently passed 2019/2020 national budget the Finance Minister Joseph Mwananvekha has introduced various tax incentives and other money related laws which are expected to improve the way businesses in certain sectors are operated. 

And the minister himself is confident that such changes would help the country improve its economic performance as well as improve livelihoods. However the Bretton Woods institution is quick to point out that such improvements should not create room for complacency.

Toulmin stresses that there is still much more Malawi needs to do urgently, if this commitment is to be realized in full. Malawi joins other countries such as Zambia, Togo, Kenya Mauritius, Seychelles, Rwanda, South Africa, Namibia and Botswana that are ranked below the 110 mark on the global index.

The country is in the top ten African countries, ranking on position ten, with Mauritius and Rwanda being the highest ranked in the sub-Saharan region. However the countries that have done well with regard to making the most of business related reforms are Nigeria, Togo and Kenya.

Economies of the region enacted 73 reforms in the 12 months leading to May 1, down from a record high of 108, and the number of countries implementing, at least one reform fell to 31 from 40. 

According to the World Bank, when low-income economies achieve higher levels of economic efficiency, they tend to reduce the income gap with more developed countries.

The bank has since reaffirmed its commitment to working with the Malawi government to help it deliver its commitment to job creation which is also one of the indicators. 

 

 

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