The World Bank Has Scrapped Doing Business Reports that Rank Rwanda’s Business Environment Ahead of Countries such as the Netherlands, Belgium, Kenya and South Africa
By David Himbara
The World Bank has confirmed that after discovering some ethical issues involving former bank staff and board officials, it is discontinuing the use of Doing Business to assess countries’ business environments. General Paul Kagame must be mourning this decision – the reports rank Rwanda ahead of developed and developing countries. Kagame uses Doing Business reports to boasting that Rwanda is an economic success story.
On September 16, 2021, the World Bank dropped a bombshell. It confirmed that it will be discontinuing ‘Doing Business’ reports. The global lender explained that after the irregularities raised ethical matters involving former bank staff and board officials, it will work on a new approach to assessing countries’ business and investment climates. The Bank issued the following statement:
“Trust in the research of the World Bank Group is vital. World Bank Group research informs the actions of policymakers, helps countries make better-informed decisions, and allows stakeholders to measure economic and social improvements more accurately. Such research has also been a valuable tool for the private sector, civil society, academia, journalists, and others, broadening understanding of global issues.
After data irregularities on Doing Business 2018 and 2020 were reported internally in June 2020, World Bank management paused the next Doing Business report and initiated a series of reviews and audits of the report and its methodology. In addition, because the internal reports raised ethical matters, including the conduct of former Board officials as well as current and/or former Bank staff, management reported the allegations to the Bank’s appropriate internal accountability mechanisms.
After reviewing all the information available to date on Doing Business, including the findings of past reviews, audits, and the report the Bank released today on behalf of the Board of Executive Directors, World Bank Group management has taken the decision to discontinue the Doing Business report. The World Bank Group remains firmly committed to advancing the role of the private sector in development and providing support to governments to design the regulatory environment that supports this. Going forward, we will be working on a new approach to assessing the business and investment climate. We are deeply grateful to the efforts of the many staff members who have worked diligently to advance the business climate agenda, and we look forward to harnessing their energies and abilities in new ways.”
Kagame will not be happy with this development. Doing Business reports rank Rwanda ahead of all African economies except Mauritius. Rwanda tops Kenya, the East African economic powerhouse. Rwanda is even ranked higher than than the Netherlands and Belgium. Kagame and his government ceaselessly use the Doing Business Reports to boast. Here is an example of his government’s boasts on how Rwanda shines globally, in Africa and in East African contexts:
“Rwanda remains the second easiest place to do business in Africa and is now 38th globally, according to the 2020 World Bank Doing Business report released today. The World Bank assessed 190 countries using 10 indicators in business regulations…Rwanda ranked second in Africa after Mauritius and maintained first position in the East African Community. Rwanda is also the only low-income country in the Top 50.”
Despite this “impressive” ranking, Rwanda has failed to attract significant foreign direct investment (FDI). In 2020, FDI stock in Rwanda stood at US$2.6 billion, versus US$10 billion in Kenya; US$14.5 billion in Uganda; and US$16.5 billion for Tanzania. FDI flows into Rwanda in 2020 was US$135 million versus US$717 million to Kenya; US$823 million to Uganda; and US$1 billion for Tanzania.
Kagame will have to find another boasting tool – stay tuned.