Mozambique’s World Bank Business Ranking Improves

November 11, 2013

Mozambique, which has historically struggled with the process of issuing construction permits, jumped 46 places on the construction permit indicator in the recently released World Bank Doing Business 2014 report.

The vast improvement in the country’s process for issuing construction permits helped move the country overall to 139th from 146th in the most recent rankings. The rankings comprise 11 indicators that measure such things as a country’s business regulations, property rights, tax burdens, access to credit, and the cost of exporting and importing.

The slow process for issuing permits was identified by the private sector as a major obstacle impeding business in Mozambique. The Support Program for Economic and Enterprise Development (SPEED) project, a U.S. Agency for International Development-funded initiative led by DAI, began working with the municipality of Maputo in October 2011 to simplify the process of obtaining construction permits.

SPEED provided an in-kind grant comprised of technology equipment to the Department of Urbanization and Construction and hired two consultants to design a working business process management system, create a database that supports a file tracking system, and install computing equipment, and connect the network system. SPEED also hired a statistics consultant to analyze the amount of time it took to implement short-term reforms before and after the technology was introduced.

According to the latest Doing Business estimates, the SPEED team’s efforts contributed to a savings of approximately 247 days in the process for obtaining a license, resulting in substantial savings to the private sector, increased investment, and employment. SPEED’s estimates indicate that the private sector saved approximately $3.7 million and created nearly 2,600 jobs over the course of the year as more licenses were processed, allowing construction projects to start sooner.

“This effort shows that a dynamic, committed partner can make real change happen over a short period of time, even in a difficult environment,” said Brigit Helms, SPEED Chief of Party. The World Bank’s recognition of Mozambique offers further encouragement to continue work with the municipality on monitoring the implementation of other recommended reforms.