MASERU — Lesotho has slumped to position 138 out of 183 countries in the Ease of Doing Business report for 2011 which was released by the World Bank earlier this month.
Last year Lesotho was listed on position 130.
The Ease of Doing Business report is an annual survey conducted by the World Bank to investigate regulations that either enhance or restrict business development around the globe.
Investors normally use the results of the survey as a reference point to gauge a country’s economic competitiveness against other countries.
The survey assesses procedures that entrepreneurs must complete in order to set up and operate the business.
It also looks at the time investors take to register a business, get a contract permit, issues of taxation as well as access to credit and the registration of property.
The report said Lesotho had not introduced any reforms to improve the business climate during the period under review.
Lesotho dropped from position 116 in 2006 to 130 in 2010 before dropping eight places down in the current rankings for next year.
The drop has been largely attributed to the slow pace in instituting reforms to improve the business climate in the country.
Comparatively, Lesotho is the lowest ranked country within the Southern African Customs Union.
Botswana has been ranked at position 52, Namibia at 69, South Africa at 34 while Swaziland is ranked at position 118.
According to the report, it takes about 40 days for an investor to fully register a business in Lesotho after satisfying seven procedures.
“A fundamental premise of Doing Business is that economic activity requires good rules — rules that establish and clarify property rights and reduce the cost of resolving disputes; rules that increase the predictability of economic interactions and provide contractual partners with certainty and protection against abuse.
“The objective is regulations designed to be efficient, accessible to all and simple in their implementation,” the report says.