Nam slides on business ladder

NAMIBIA has become a worse place to conduct business over the past three years, consistently sliding down the global ladder measuring the extent to which red tape ties the hands of entrepreneurs.

According to ‘Doing Business 2010’, released by the World Bank, Namibia now ranks 66th out of 183 economies worldwide, down from its 51st place in 2009 and its 48th position the previous year.’In times overshadowed by the global financial and economic crisis, business regulation can make an important difference for how easy it is to reorganise troubled firms to help them survive, to rebuild when demand rebounds, and to get new businesses started,’ said Penelope Brook, the World Bank’s Acting Vice President for Financial and Private Sector Development.Namibia has slipped in seven of the 10 indicators used to judge the ease of doing business between June 2008 and May 2009, improving in only two and remaining unchanged in one.The World Bank couldn’t credit the country with a single reform to lure businesspeople during that time.’In Namibia no major reform was recorded,’ the World Bank says in its analysis.Mauritius, on the other hand, ranked 17th out of 183 with six reforms, clinching the top spot for sub-Saharan Africa for the second year running. Among others, the country adopted a new insolvency law, established a specialised commercial division within the court, eased property transfers and expedited trade processes.Angola recorded three reforms, while Malawi, Mozambique and Botswana each boasts with two reforms.Rwanda reformed in seven business regulation areas, thereby becoming the first sub-Saharan African country to clinch the title as the world’s best reformer.It now takes a Rwandan entrepreneur just two procedures and three days to start a business, ‘Doing Business 2010’ shows.In comparison, it takes a businessperson 10 procedures and 66 days to start a business in Namibia. This placed Namibia 123rd out of 183 on the index for starting a business. Last year Namibia held the 116th spot.Illustrating just how cumbersome the process is, the World Bank broke the 10 various steps down.Anyone wishing to start a business locally must first pay the registration fees and buy revenue stamps at the Receiver of Revenue. This can be done within a day and will cost N$130.Next the entrepreneur must hire an attorney to register the company with the Registrar of Companies at the Ministry of Trade and Industry and must get a certificate to start business.This will cost more than N$6 000 and can take up to two weeks.Depositing the initial capital in a bank account, applying for a town planning certificate and a trading licence from the local municipality should all be finalised within a day. The only expense is that of the trading licence, which costs about N$200.The entrepreneur also needs to register for pay-as-you-earn tax (PAYE), as well as value-added tax (VAT) at the Receiver. This can take up to four and nine days respectively.Furthermore, the future investor will have to register workers with the Social Security Commission and the Workmen’s Compensation Commission, taking another 20 and 18 days respectively.Obtaining the approval of the Registrar for a company is another lengthy process. According to ‘Doing Business 2010’, if the proposed name is acceptable, it is reserved for 60 days. However, data computerisation is causing a delay and the process can take anything from between seven to 30 days, the report states.Besides slipping on the index for starting a business, Namibia also fared worse on sixth other ladders: dealing with construction permits: 38th out of 183 (2009: 37th), employing workers: 43rd (2009: 39th), registering property: 134th (2009: 133rd), getting credit: 15th (2009: 12th), protecting investors: 73rd (2009: 70th), and paying taxes: 97th (2009: 93rd).Namibia improved in two of the indicators – enforcing contracts: 41st (2009: 44th) and trading across borders: 151st (2009: 152nd).It remained in 55th position as far as closing a business is concerned.jo-mare@namibian.com.na