The Private Enterprise Federation (PEF) is pushing the government to continue introducing policies, guidelines and legislation to enhance Ghana’s business-friendly environment.
This follows the suspension of the World Bank’s Doing Business report after irregularities were detected regarding changes to the data used in the report.
Nana Osei-Bonsu, chief executive officer of the PEF, said the Ease of Doing Business report is very important because “it’s a pragmatic, competitive peer review and peer comparison mechanism”.
Speaking to Nana Oye Ankrah on the Asaase business news, he said the report of business rankings has always been a “cosmetic comparison but it gives the government a pull-up, in the sense of, ‘How do we perform among our peers?’ It also allows the government to tinker with its policy framework as to the direction it wants to take in the economy…”
“The irregularities, we [the PEF] have brought that up years back. So, now that they have discovered that themselves … we think that they [will] go back to the drawing board and look at the inconsistency and come up with a framework that is applicable,” he said.
Nana Osei-Bonsu said even though the country has consciously restructured its business regulatory environment to attract investors in the past four years, the decision by the World Bank Group should not slow the progress it is making.
He said: “The Ease of Doing Business index is to help you to improve business enablers in your country; whether it is done or not, that is the fundamental motive. It allows you to showcase your business environment and opportunities.
“It is good for us, published or not published. You have to focus on correcting your systems, and when these corrections happen, they surely reflect on the ground. Even though it is not going to be published, we still have to continue to do what is good to create better-enabling conditions to do business,” Nana Osei-Bonsu told the B&FT.
A World Bank statement said: “A number of irregularities have been reported regarding changes to the data in the Doing Business 2018 and Doing Business 2020 reports, published in October 2017 and 2019. The changes in the data were inconsistent with the Doing Business methodology.
“The board of executive directors of the World Bank has been briefed on the situation, as have the authorities of countries that were most affected by the data irregularities. The publication of the Doing Business report will be paused as we conduct our assessment,” the statement said.
The ranking is important but …
Despite the suspension, Nana Osei-Bonsu stressed that what matters is what the investors experience and recommend – not really what the ranking will say, even though it is important.
He said: “The ranking is not the only thing that investors look at. They get attracted by that and further come into the country, go through their embassy and ask about the real issues on the ground.
“So, the ranking allows investors to get some data on how well a country is when it comes to taxes and others; but they don’t only look at the ranking. Any serious investor goes down to the country.
“Word of mouth is very important in the investing world. Ghana is working on taxes; if word goes out that Ghana has a good tax regime, that is good. Liquidity, long-term capital, taxes, law enforcement are things that we need to continuously improve to attract investors.
“With non-publication of the Ease of Doing Business Index 2020, I don’t foresee it hurting us – but I don’t also want the government to relax, but rather continue doing the right things,” he said.
In the last report, published in 2019, Ghana improved its ranking to 114 out of 190 economies – up six places from 120 in the 2018 Doing Business report. Ghana’s Ease of Doing Business score, formerly called distance to frontier, has increased by 2.06 to 59.22.
The progress reflects reforms in three critical areas. First, the government has made it easier to deal with construction permits by strengthening construction quality control, through imposing stricter qualification requirements for professionals in charge of technical inspections.
Second, the government has made it easier to pay taxes by allowing financial losses to be carried forward fully during any of the following five years of assessment. And third, the government has made it easier to trade across borders by implementing a paperless customs clearance processing system.
Four African economies – Côte d’Ivoire, Kenya, Rwanda and Togo – are among the top ten most improved economies globally.