Botswana improves slightly on ease of doing business

The World Bank has recently released the Doing Business Report for 2015 which sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business in compliance to relevant regulations. The report measures and tracks changes in regulations affecting eleven areas in the life cycle of a business: 1) starting a business, 2) dealing with construction permits, 3) getting electricity, 4) registering property, 5) getting credit, 6) protecting minority investors, 7) paying taxes, 8) trading across borders, 9) enforcing contracts, 10) resolving insolvency and 11) labour market regulation. The report presents quantitative indicators on business regulations and the protection of property rights that can be compared across 189 economies. The data set covers 47 economies in Sub-Saharan Africa, 32 in Latin America and the Caribbean, 25 in East Asia and the Pacific, 26 in Eastern Europe and Central Asia, 20 in the Middle East and North Africa and 8 in South Asia, as well as 31 OECD high-income economies. The indicators are used to analyze economic outcomes and identify what reforms have worked, where and why. Overall the country has improved on rankings save for indicators on Enforcing Contracts, Trading Across Borders, and Dealing with Contracts Payments.

Indicator 1: Starting a Business
The report measures the ease of starting a business in an economy by recording all procedures officially required or commonly done in practice by an entrepreneur to start up and formally operate an industrial or commercial business—as well as the time and cost required to complete these procedures. According to data, starting a business requires 10 procedures, takes 60 days, costs 1% of income per capita and requires paid-in minimum capital of 0% of income per capita. Globally, Botswana stands at 149 in the ranking of 189 economies on the ease of starting a business.

Indicator 2: Dealing with Construction Permits
Dealing with construction permits in Botswana requires 20 procedures, takes 110 days and costs 0.3% of the warehouse value. Botswana stands at 93 in the ranking of 189 economies. Smart regulation ensures that standards are met while making compliance easy and accessible to all. Coherent and transparent rules, efficient processes and adequate allocation of resources are especially important in sectors where safety is at stake. Construction is one of them. In an effort to ensure building safety while keeping compliance costs reasonable, governments around the world have worked on consolidating permitting requirements

Indicator 3: Getting Electricity
This indicator records all procedures required for a local business to obtain a permanent electricity connection and supply for a standardized warehouse, as well as the time and cost to complete them. Data suggests that getting electricity in Botswana requires 5 procedures, takes 121 days and costs 340.4% of income per capita. Botswana stands at 103 in the ranking of 189 economies on the ease of getting electricity.

Indicator 4: Registering Property
The indicator records the full sequence of procedures necessary for a business to purchase property from another business and transfer the property title to the buyer’s name. The transaction is considered complete when it is opposable to third parties and when the buyer can use the property as collateral for a bank loan or resell it. Registering property in Botswana requires 4 procedures and takes 15 days and costs 5.1% of the property value. As a result, Botswana stands at 51 in the ranking of 189 economies on the ease of registering property.

Indicator 5: Getting Credit
This indicator measures rules and practices affecting the coverage, scope and accessibility of credit information available through a credit registry or a credit bureau. Globally, Botswana stands at 61 in the ranking of 189 economies on the ease of getting credit.

Indicator 6: Protecting Minority Investors
This indicator measures the protection of minority investors from conflicts of interest through one set of indicators and shareholders’ rights in corporate governance through another. Botswana stands at 106 in the ranking of 189 economies on the strength of minority investor protection index.

Indicator 7: Paying Taxes
Using a case scenario, the report measures the taxes and mandatory contributions that a medium-size company must pay in a given year as well as the administrative burden of paying taxes and contributions. This case scenario uses a set of financial statements and assumptions about transactions made over the year. Information is also compiled on the frequency of filing and payments as well as time taken to comply with tax laws. On average, firms make 34 tax payments a year, spend 152 hours a year filing, preparing and paying taxes and pay total taxes amounting to 25.3% of profit. The country stands at 67 in the ranking of 189 economies on the ease of paying taxes

Indicator 8: Trading Across Borders
According to data collected by Doing Business, exporting a standard container of goods requires 6 documents, takes 27 days and costs $3145. Botswana stands at 157 in the ranking of 189 economies on the ease of trading across borders.
Indicator 9: Enforcing Contracts
This indicator measures the efficiency of the judicial system in resolving a commercial dispute before local courts. Botswana stands at 61 in the ranking of 189 economies on the ease of enforcing contracts.
Indicator 10: Resolving Insolvency
Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recouped by secured creditors through reorganization, liquidation or debt enforcement (foreclosure) proceedings. Globally, Botswana stands at 49 in the ranking of 189 economies on the ease of resolving insolvency.

Indicator 10: Labour Market Regulation
The data on labor market regulations are based on a detailed survey of employment regulations that is completed by local lawyers and public officials. Employment laws and regulations as well as secondary sources are reviewed to ensure accuracy. To make the data comparable across economies, several assumptions about the worker and the business are used.

The worker:
Is a cashier in a supermarket or a grocery store
Is a full-time employee
Is not a member of the labour union, unless membership is mandatory

The business:
Is a limited liability company (or the equivalent in the economy) with 60 employees.
Operates a supermarket or grocery store in the economy’s largest business city.
Is subject to collective bargaining agreements if such agreements cover more than 50% of the food retail sector and they apply even to firms that are not party to them.
Abides by every law and regulation but does not grant workers more benefits than those mandated by law, regulation or (if applicable) collective bargaining agreements.