Botswana's DBI Ranking And What It Means For SMMEs
The Doing Business Index (DBI) is a ranking system created by the World Bank and aims to measure the quality of the business environments of over 190 countries and give a score to determine where they rank compared to other surveyed countries.
The index uses 10 factors which affect the life of a business which include starting a business,dealing with construction permits,getting electricity,registering property,getting credit,protecting minority investors,ease of paying taxes,trading across borders,enforcing contracts and resolving insolvency.
This year's results place Botswana 86th in the world,falling down 15 places from its 71st ranking in 2017 . This year,although its overall score increased,the country still slipped down in the overall rankings which shows that although it is doing enough to improve its business enabling environment,other countries worldwide are doing much better and in an environment where competition for investors is intense, "doing enough" is just not good enough.
Further breaking down the results,on each category uses to measure each country's index,Botswana ranks are as follows:starting a business(157th),dealing with construction permits(31st),access to electricity(133rd),registering property(80th),access credit(85th),protecting minority investors(83rd),ease of paying taxes(51st),trading across borders(55th),enforcing contracts(134th) and resolving insolvency(81st).
Although it is ranked an impressive 6th amongst its African peers,a first glace at the breakdown of those results shows a very worrying picture for the country's small,micro and mediums enterprises (SMMEs). A ranking of 157th in starting a business means that the country's regulations are making it hard for these SMMEs to prosper and this goes against one of the government's foremost mandates which is to facilitate growth the country's entrepreneurial environment.
It further shows that even though the government is committed to supporting startups,the way it is going about doing it is simply not working despite billions of taxpayers money being pumped into various initiatives to support this cause.
One of the contributing factors responsible for the country's slip in ratings was identified as the dwindling of foreign investment in the country's diamond mining industry,its biggest contributor to the national GDP. The reason present by economists for this reduced interest was that investors felt like the country did not need more investments by them in the industry.
Even-though this does not look favorable,when one thinks about it,it presents a very unique opportunity for local entrepreneurs to fill in the gap left by the absence of foreign investors. It therefore falls on both the local entrepreneurs to have sustainable and practical ideas which would fill this gap and on the government to put in place a friendly environment for those startups who will be trying to fill those shoes to succeed in doing so and hence gear the country towards a diamond industry which would be in the hands of locals in the near future.
To strengthen the country's quality of doing business and create an enabling environment for the success of SMMEs,the responsibility therefore falls on legislative bodies to go back to the drawing board and further ponder more effective ways of supporting the country's startups which are so vital in a country where there is minimal citizen participation in most private sector industries including mining and tourism which are the 2 biggest contributors to the country's GDP.
Like i mentioned on this post,the only way to come with these effective ways is to consult and involve the youth,who are the intended beneficiaries of these entrepreneurial initiatives, in the legislative process so they can contributed to the tabled solutions.Failure to do so will see the trend of taxpayers money being invested on projects which failure to achieve their assigned mandate continue.
The index uses 10 factors which affect the life of a business which include starting a business,dealing with construction permits,getting electricity,registering property,getting credit,protecting minority investors,ease of paying taxes,trading across borders,enforcing contracts and resolving insolvency.
This year's results place Botswana 86th in the world,falling down 15 places from its 71st ranking in 2017 . This year,although its overall score increased,the country still slipped down in the overall rankings which shows that although it is doing enough to improve its business enabling environment,other countries worldwide are doing much better and in an environment where competition for investors is intense, "doing enough" is just not good enough.
Further breaking down the results,on each category uses to measure each country's index,Botswana ranks are as follows:starting a business(157th),dealing with construction permits(31st),access to electricity(133rd),registering property(80th),access credit(85th),protecting minority investors(83rd),ease of paying taxes(51st),trading across borders(55th),enforcing contracts(134th) and resolving insolvency(81st).
Although it is ranked an impressive 6th amongst its African peers,a first glace at the breakdown of those results shows a very worrying picture for the country's small,micro and mediums enterprises (SMMEs). A ranking of 157th in starting a business means that the country's regulations are making it hard for these SMMEs to prosper and this goes against one of the government's foremost mandates which is to facilitate growth the country's entrepreneurial environment.
It further shows that even though the government is committed to supporting startups,the way it is going about doing it is simply not working despite billions of taxpayers money being pumped into various initiatives to support this cause.
One of the contributing factors responsible for the country's slip in ratings was identified as the dwindling of foreign investment in the country's diamond mining industry,its biggest contributor to the national GDP. The reason present by economists for this reduced interest was that investors felt like the country did not need more investments by them in the industry.
Even-though this does not look favorable,when one thinks about it,it presents a very unique opportunity for local entrepreneurs to fill in the gap left by the absence of foreign investors. It therefore falls on both the local entrepreneurs to have sustainable and practical ideas which would fill this gap and on the government to put in place a friendly environment for those startups who will be trying to fill those shoes to succeed in doing so and hence gear the country towards a diamond industry which would be in the hands of locals in the near future.
To strengthen the country's quality of doing business and create an enabling environment for the success of SMMEs,the responsibility therefore falls on legislative bodies to go back to the drawing board and further ponder more effective ways of supporting the country's startups which are so vital in a country where there is minimal citizen participation in most private sector industries including mining and tourism which are the 2 biggest contributors to the country's GDP.
Like i mentioned on this post,the only way to come with these effective ways is to consult and involve the youth,who are the intended beneficiaries of these entrepreneurial initiatives, in the legislative process so they can contributed to the tabled solutions.Failure to do so will see the trend of taxpayers money being invested on projects which failure to achieve their assigned mandate continue.
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