Mozambique is among the countries which received poor rankings in the now-discredited World Bank “Doing Business” rankings, according to Joseph Hanlon, editor of the newsletter Mozambique News Reports and Clippings.Writing in Club of Mozambique, Hanlon is highly critical of the World Bank, saying that it used its “Doing Business” rankings to “bully” countries like Mozambique to “follow neo-liberal dictates” in order to attract investment by improving their ranking. In 2020 Mozambique was placed 138th out of 190 countries, having dropped three places in the “Doing Business” index.Writing in The Conversation, Fernanda G Nicola, professor of law, American University, says the World Bank is in “the middle of one of its biggest scandals since being founded in 1944”.The impact of the index on a country’s fortunes is illustrated by World Bank research which found that a 1 percentage point improvement in a country’s overall Doing Business score correlated with $250 million to $500 million in additional foreign direct investment.“Countries in Latin America and Africa have restructured their entire corporate governance regimes to fit Doing Business’s one-size-fits-all reforms,” she says.Companies looking to do business in Mozambique will be looking at other reports, such as the 2021 Investment Climate Statement by the US Department of State.“Despite the pandemic and terrorism, Mozambique has a decent mid-term outlook. “Following four years of reforms since the hidden debt scandal, Mozambique has made progress in the fight against corruption. “Thanks in part to these efforts, the IMF and Mozambique entered into discussions to relaunch a new lending programme, potentially the first non-emergency budgetary assistance to the government in five years. “If Mozambique continues on this path of reform, it will be better placed to manage its eventual resource income and attract other foreign investments.”The “hidden debt scandal” refers to €1.76 billion (R29 billion) in loans taken out by three Mozambican state-owned companies, ProIndicus, Ematum and Mam, between 2013 and 2014.A trial of 19 suspects – including the son of Mozambique's ex-president Armando Guebuza – has begun in the town of Machava outside Maputo. Former finance minister Manuel Chang, who is in detention in South Africa, is among the accused. FN4614SD
