FDI: Zim clears all bottlenecks •ease of doing business improves •regulatory burdens removed
Happiness Zengeni and Tinashe Makichi—
Zimbabwe has made considerable progress in improving its business environment after scoring high during the first 100 days of the Rapid Results Framework enunciated by President Mugabe in August. The framework was adopted in line with the 10-Point Plan, to create an enabling environment for local entrepreneurs to thrive and incentivise foreign investors to bring in capital and new technologies.
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Five thematic Technical Working Groups reporting to the Steering Committee were constituted to conceptualise reforms and deliver on action plans developed by stakeholders.
The initiative was launched in September to fast-track key business environment reforms with the support of the World Bank and other development partners. Speaking at the Performance Review workshop for the first 100 days, Office of the President and Cabinet Deputy Chief Secretary Retired Colonel Christian Katsande yesterday said results from the thematic working groups were encouraging.
“The thematic working groups scored an impressive performance in the first 100 days under the Rapid Results Approach, but only two have remained a cause for concern. The RRA that we pursued resulted in instilling teamwork among the groups and they got to know new things that they have not been aware of.
“We need to build on these achievements as we move from quarter to quarter and also work towards attaining desired requirements on the sectors that underperformed,” said Rtd Col Katsande.
Groups which showed improvement are Getting Credit (82 percent complete), Starting a Business (88 percent) and Property Registration (93 percent). The goal of the Starting a Business group is to reduce the days it takes to start a business to 30 days from the current 90 days by December 31, 2015. The Technical Working Groups drafted and amended nine pieces of legislation, by-laws and regulations, while streamlining various processes within multiple Government ministries, departments and agencies.
Among the laws drafted is the new Insolvency Bill to promote a culture of corporate rescue to preserve jobs in companies that are viable but experience challenges. Movable Property Securities Interest Bill was also drafted to permit responsible lenders to lend against movable assets as collateral and thereby improve access to finance for SMEs in particular.
A Shop Licensing Bill was amended to eliminate regulatory burdens that confront entrepreneurs trying to formalise their businesses. A Commercial Court Bill will be drafted to permit expeditious settlement of commercial disputes through accelerated processes.
Secretary for Justice, Parliamentary and Legal Affairs Ms Virginia Mabhiza, who is also the team leader of the thematic working group on Starting a Business, said her group continues to find ways to restructure some Government departments to sustain viability. She said there is need for serious buy in at the level of Cabinet ministers for the idea of reforming the business environment to prevail.
“There is need for restructuring of some departments to sustain viability and we are also looking at finalising a comprehensive review of the Companies Act while covering issues beyond the limits of ease of doing business. “There is need for serious buy in at the level of Cabinet Ministers and also lack of participation from the private sector has been a cause for concern,” said Mrs Mabhiza.
On business processes that straddled multiple Government agencies, these were streamlined and of particular mention are processes to pay taxes at the Zimbabwe Revenue Authority and processes to secure Construction Permits from the Harare City Council.
The next review will be done in April 2016 while the global Doing Business review will start in May and rankings subsequently released in October next year. The World Bank Doing Business report released in October showed that Zimbabwe is now ranked at 155 of 189 countries on the Ease of Doing Business. This is up 16 places from its original ranking last year of 171 and two places down from its rank on the revised list.
The report noted that Zimbabwe only showed an improvement in two of the topics; Getting credit ranked 79 from 90 and Protecting minority investors at 81 from 87. The country did not do well on Starting a business (182 from 179), Paying taxes (145 from 142), Trading Across Borders (100 from 99).
Efforts are, however, being made to improve this ranking next year.