Windhoek – The difficulty of starting a business in Namibia has dramatically dropped the country’s global ranking in the last five years, falling from 132nd (out of 189 countries) to 172nd position (out of 190 countries), according to the World Economic Forum’s Global Competitiveness Report (GCR).
Comparing 2014 to 2019, the Institute of Public Policy Research (IPPR) in its report entitled “Improving the Business Environment in Namibia”, also indicates that Namibia has fallen drastically in the GCR’s Ease of Doing Business when it comes to dealing with construction permits, getting credit, protecting investors and resolving insolvency.
The GCR’s Ease of Doing Business report annually examines pillars that are relevant to operating a business across 190 countries and the methodology is based on interviews with in-country stakeholders across the financial, transport, legal, including government.
Namibia’s ranking for dealing with construction permits fell from being 31st in the world in 2014 to the 83rd position in 2019, while the ease with which to get credit slumped from position 55 to 73.
However, Namibia made small improvements on pillars such as getting electricity from position 72 to 71 and registering property, from position 178 to 174.
In addition, the country improved on trading across borders (from 141st to 136th), paying taxes (from 114th to 81st), enforcing contracts (69th to 58th), but fell back on pillars such as protecting investors (80th to 99th) and resolving insolvency (85th to 125th).
When it comes to Namibia’s overall global competitiveness, Namibia’s downward trajectory has also been observed as it now ranks 100th out of 144 countries, compared to ten years ago when it was ranked 74th out of 133 countries.
This is due to poor performance in the quality of its higher education, health, primary education, business sophistication, technological readiness, macro-economic environment and market size.
However, Namibia was ranked highly for its institutions – 51st in the world (out of 144 countries), infrastructure (91st), financial system (47th) and labour market efficiency (39th).
When it comes to SADC’s ranking on the 2018 GCR, Mauritius stands out with a 49th global ranking out of 144 countries, followed by South Africa (67th), Seychelles (74th), Botswana (90th) and Namibia (100th).
In order to improve Namibia’s economic competitiveness, the IPPR recommends the relevant Namibian authorities to continue buttressing unfolding reforms by adequately supporting consultants, ensuring that appropriately qualified and skilled personnel are assigned to shadow the consultants in order to enable smooth eventual handover to Namibian officials.
The research institute further recommends inter-agency and inter-ministerial coordination and communication systems and processes to remain robust while adherence to timeliness and deadlines and the inculcation and maintenance of political resolve on reforms is also important.
When it comes to enhancing the overall business environment, the IPPR took note of areas of significant concern within the state sector, such as policy uncertainty from housing to mineral resources of which the Namibian government has been making slow progress.
In particular, the IPPR pointed to the dragging Minerals Amendment Bill (prospecting and mining) and the controversial New Equitable Economic Empowerment Framework, which have dented Namibia’s image as an attractive investment destination.
Also, the public research institute indicated that rampant political interference in the public service was another impediment to enhancing the business environment in Namibia.
“The Namibian authorities are thus encouraged to view current economic conditions as an opportunity to decisively deal with some of these issues, as improving institutional and policy environments are already part of expressed widespread reform proposals in order to infuse and improve efficiency, accountability and transparency in the public sector,” stated the IPPR.