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Malawi up 8 steps on World Bank index

 

Malawi has climbed up eight steps on 2017 World Bank Doing Business (DB) index from 141 last year to 133, thanks to reforms undertaken over the year.

The report released yesterday noted that Malawi made it easier to start a business by eliminating the legal requirement to use a company seal, making it optional for entrepreneurs as well as getting credit.

Along with the developments, the World Bank gave Malawi a score of 76.73 out of 100 from an overall distance to frontier (DTF) score of 54.39 last year.

Mwanamvekha: We embarked on a  number of initiatives
Mwanamvekha: We embarked on a
number of initiatives

While Minister of Industry, Trade and Tourism Joseph Mwanamvekha said yesterday the feat signifies that Malawi is becoming a better place to do business and will boost investor confidence, Malawi Confederation of Chambers of Commerce and Industry (MCCCI) president Karl Chokotho advised government to maintain the momentum on reforms.

Mwanamvekha, however, said this does not mean the country has no challenges, assuring that government is working towards the elimination of  the bottlenecks.

The DB report recognises Malawi’s effort to strengthen access to credit by adopting a new law on secured transactions that implements a functional secured transactions system and establishes a centralised, notice-based and online collateral registry.

Reads the report in part: “Malawi introduced new secured transactions legislation and established modern unified collateral registries. Both registries are now fully operational, resulting in an improvement in the ability of small businesses to obtain credit as they can now use firm assets as collateral.”

The collateral registry enables businesses to use movable assets to get a loan and such assets include motor vehicles, livestock, crops, maize mill, equipment, or accounts receivable.

The World Bank Group supported the establishment of the registry with $550 000 (about K401 million) financing from the International Finance Corporation (IFC) and the International Development Association (IDA).

For his part, Chokotho said there have been some notable initiatives that the Ministry of Industry, Trade and Tourism undertook during the year.

According to the report, neighbouring Zambia is on position 98, Mozambique at 137 and Tanzania at 132.

World Bank DB report ranks 189 economies based on the average of each economy’s DTF scores for 10 indicators and show how close each economy is to global best practices in business regulation.

The  10 indicators are starting a business, registering property, resolving insolvency, getting credit, trading across borders, dealing with construction permits,  protecting minority investors, getting electricity,  paying taxes and enforcing contracts. n

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