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THE hurdles that have been hindering investors from Zimbabwe are set to be removed as Government is taking giant steps towards improving the business environment. For long, potential investors and the business community have been expressing concern over the business environment and Government has responded by partnering the World Bank with a view to eliminating barriers that could be preventing FDI.

The fact that Zimbabwe is ranked 170 out of 189 economies on the World Bank Ease of Doing Business Index is cause for concern. This does indicate that the cost, time and procedures for starting business are so complicated for locals and so deters foreign investors.

The Doing Business Project provides measures of business regulations and their enforcement across 189 economies.
It provides quantitative measures of regulations for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

Doing Business, however, does not measure all aspects of the business environment that matter to firms or investors.
Naturally, a nation whose citizens invest in their economy tends to receive more FDI because of confidence they would have created for investors.

Participation by local investors also provides an indication to foreign investors on the business environment of a country. Although the Government doesn’t agree entirely with the ranking of Zimbabwe on the Ease of Doing Business Index, it is, however, encouraging that it has taken the initiative in efforts to identify areas that need improvement.

The World Bank says that it is more expensive and that it takes at least three times longer to start a business in Zimbabwe than in other countries. All successful governments always take introspection seriously which helps in defining the present and future.

Improving the doing business environment will assist Zimbabwe in its target to attract US$2 billion Foreign Direct Investment annually. Zimbabwe could build on the 162 investment approvals and the US$400 million FDI achieved as at the end of June.

When Government opens up and invites strategic partners to help scrutinise its environs then it must be applauded. It is hugely sacrificial for any state to become reclusive for no country can prosper in isolation in this era of globalisation.

We are particularly enthralled that it is the Government that requested its partners, the business community and other stakeholders to view its linen. Granted, doing business environment is a major economic indicator that potential investors use to determine where to invest.

For our country, which is operating under sanctions, improving the Doing Business Environment is the only way to go.
The process should obviously include synchronising investment laws to eliminate duplications. We should consolidate the idea of the Zimbabwe Investment Authority’s One Stop Shop; plug loopholes and ensure a water-tight and yet efficient system of registering new businesses.

Government should also carefully investigate the sector specific licensing requirements and synchronise them. A potential investor should be given a complete set of requirements, application and registration forms under one roof, and most importantly, efficiently.

Investors naturally prefer countries where they can quickly move in, where decisions are made in a reasonable time, where documents, permits and licenses are processed in a very short space of time.

This in turn has a bearing on when the investor can possibly begin to reap rewards for the investment poured in any market. Investors prefer efficient markets. While Government interrogates these issues, we must not forget that locally-based Zimbabweans could be our greatest investors. The cost of registering new businesses remains too high and this has forced many to operate unregistered backyard companies.

This means Government is not accessing potential tax revenue from these entities.
It means therefore that while we are engaged in improving the doing business environment, we must make it easier and cheaper and therefore attractive for local entrepreneurs to register their businesses. The investment laws should not leave the Zimbabwean poorer. We applaud Government for setting the reform exercise in motion and naturally we call on the partners and other stakeholders to thoroughly interrogate these issues.