Chairperson of the National Ease of Doing Business Committee (NEDBC) Lynn Holowesko said yesterday that the committee finds it “difficult to accept” The Bahamas’ slip to 119 in the World Bank’s Doing Business 2020 report, despite improving its country rankings by a net 55 places.
While The Bahamas improved most significantly in the area of protecting minority investors by some 44 basis points; dealing with construction permits by some 14 points; and starting a business by some 11 basis points, the World Bank cites an increase in the cost of registering property – which saw the biggest decline by 12 basis points – as one of the main factors behind the country’s ranking.
Holowesko said while the committee was surprised and disappointed, it is convinced that if the World Bank has proper data the country’s ranking would be different.
“Despite The Bahamas improving its country rankings by a net 55 places, its overall ranking fell by one place, primarily due to the fact that the World Bank’s data indicates that the cost of registering property increased from 4 percent to 12 percent, when in fact there has been no change in the combined rates of stamp duty and VAT associated with registering property. The World Bank stated that: ‘The Bahamas made property registration more costly by increasing the stamp duty on property transfers’. The deputy prime minister explained this point in his recent statement,” the NEDBC noted in a statement.
“Had the World Bank’s data reflected that there had been no change in the cost of registering property, The Bahamas’ overall ranking would have improved by 11 places relative to last year, instead of declining by one place.”
Still, Holowesko said the issue of registering property has been an area of great concern for the committee since its inception.
“The National Ease of Doing Business Committee met with the registrar general in the fall of 2017, leading to numerous recommendations being made to the government to improve the registry. Several of those recommendations were implemented, particularly as regards company formation and online access to corporate documents,” the statement revealed.
“However, as long as a limit remains in place on the number of documents that can be presented for recording at one time, it is difficult to see how significant improvement can be seen in registering property. As well, the time lapse between submitting a deed to be recorded and collecting the recorded deed involves several weeks and sometimes many months, before a recorded deed can be collected by a law firm or a member of the public.
“In 2017 the committee noted that the registrar is critically understaffed and required more qualified personnel. Government has many priorities and its timelines for improvement in all areas of doing business have, at times, been undermined by external pressures. However, the committee is of the view that the needs of the Registrar General Department must be a priority if we are to improve doing business in The Bahamas.”
The other area where The Bahamas scored negatively was in getting credit, in which the country dropped by eight basis points.
“The committee also met with the leading commercial bankers in October 2017. We understand that much of the constraint in banking operations comes from head offices in other countries. However, there would be few business people or ordinary citizens who would say that banking in The Bahamas is an efficient or straightforward process,” the statement noted.
“With particular reference to getting credit, The Bahamas missed an opportunity for an improved ranking because of delays in passing legislation and licensing of the Bahamas Credit Bureau. We now understand that licensing of the credit bureau is expected by year-end.”
The NEDBC stated that it will continue to review the processes involved in doing business in The Bahamas, monitor the country’s strengths and concentrate efforts in making recommendations to the government in the areas where The Bahamas lags behind other countries.
“The government must make the same commitment if we are to convince the world we are open for business and closing the gap with developed economies in ease of doing business,” the statement concluded.