World Bank scraps report that had Kenya ranked 56th in ease of doing business
The World Bank Group has scrapped its ease of doing business report that had Kenya in 56th spot worldwide.
In a statement issued on Thursday evening, the multi-lateral lender says the withdrawal of the rankings reports follows the uncovering of irregularities that had seen the publication paused since last year.
“Going forward, we will be working on a new approach to assessing the business and investment climate,” the World Bank said.
Findings by Wilmerhale, a firm contracted to carry out investigations of data irregularities in Doing Business 2018 and 2020 reports has revealed intense lobbying by countries for a better ‘score’ with many having complained of low rankings in the index.
Moreover, the audit has opened the door to how improper changes to the data for China, Saudi Arabia, the United Arab Emirates (UAE) and Azerbaijan were effected.
While the findings have not singled out Kenya, industry captains and Kenyans have been skeptical of the report and have previously questioned where it presents a true reflection of the business environment in the country.
Materially, the report covers indicators such as how fast one obtains construction permits, getting electricity, registering property, getting credit and resolving insolvency.
By the indicators, it may be easier to set up a business in Kenya but running it is a different matter going by views of industry captains.
Lobbies such as the Kenya Association of Manufacturers (KAM) have for instance complained of the country’s waning competitiveness as a producer of goods while the government has been reprimanded more widely for a burdening taxation regime.
At the same time, multiple layers of regulation and polices have been cited as a hindrance to doing business.
“We have found that more and more institutions are being created and these institutions require money to run and people in them. This becomes a license fee, a tax or some cost at one stage,” KAM Chairman Mucai Kunyiha said in March this year.
Players have also resoundingly pushed for the formulation of a national tax policy to create predictability in taxation during budget cycles.
“The good thing about having a tax policy is predictability so one knows that the National Treasury cannot just wake up tomorrow and decide to increase a certain class of taxes affecting you without having had enough time to plan for it,” Kenya Bankers Association (KBA) Chief Executive Officer Habil Olaka said in a recent interview.
In five years of the report, Kenya has moved up from position 136 of 190 to 56.
The government says it will continue to make reforms to better the ‘ease of doing business’ even as disparities persists between the ranking on paper and the assessment of the business environment on the ground.
“The Government in partnership with the Private Sector will continue to collaborate with the relevant agencies to develop new reforms and complete ongoing reforms, to address barriers to a conducive business environment,” East African Community & Regional Development Cabinet Secretary Adan Mohamed said in a statement on Thursday.