ONGOING reforms to the doing business conditions in Zimbabwe will, among extensive reforms already underway, result in the creation of collateral registry that will enable the use of movable properties as security for financial credit from banks and other lenders.
The extensive reforms will also touch on issues around starting a business, protecting minority investors, company insolvency, property security and registration, harmonising insolvency laws, integrating inter-agency processes and construction permits.
This will also see the creation of special platforms within High Courts to deal with commercial issues and extending the jurisdiction of magistrates’ courts to handle commercial cases, addressing bottlenecks around enforcing contracts, amending city by-laws and Deeds Act and reducing cost of importing and exporting among other reforms.
Presently, financial institutions and other providers of financial credit predominantly require immovable property as security against loans, which many individual borrowers and small to medium enterprises do not have.
Deputy Chief Secretary to the President and Cabinet Dr Ray Ndhlukula said yesterday that part of the widespread reforms will be creation of the registry for movable collateral. These will be contained in the Personal Property Security Interest legislation which is currently at the draft stage.
Dr Ndhlukula said this while giving an overview of work that has gone into extensive reforms to the doing business conditions in the country under the second phase of the 100-day rapid results initiative to improve Zimbabwe’s global competitiveness rankings.
The first phase of the 100-day RRI on the doing business reforms ran up to the end of 2015 during which a number of key milestones were achieved including the process to amend various legislations and signing of MoUs between Zimra and key institutions that included the Manpower Development Fund and National Social Security Authority.
The reform process will see a series of regulatory, licensing and legal reforms as well as other structural reforms, including setting up of the collateral registry and removing bottlenecks to doing business conditions, which are hostile to businesses and investment.
Further, tied to the creation of the collateral registry will be the setting up of a credit reference registry, which will be complementary to work that the Reserve Bank is already doing.
Dr Ndhlukula, however, noted that some of the principles and Draft Bills to give effect to the extensive reforms had not been presented to respective ministries and departments.
“Some of the principles and Draft Bills have not yet been taken to the respective ministries, departments and agencies for processing. The Chief Secretary to the President and Cabinet (Dr Misheck Sibanda) will engage them to take the process (doing business reforms) forward,” he said.
In his key note address to launch the second 100-day RRI for doing business reforms Dr Sibanda said there was need to redouble efforts aimed at reforming doing business conditions as this is critical to enhance the competitiveness of Zimbabwe and attract foreign investment.
Apart from the focus to improve Zimbabwe’s global competitiveness through efficiency and reducing the cost of doing business, the reforms are also meant to address issues raised by the President in his 10-point plan delivered last year, as it relates to Zim-Asset.