Harare – Zimbabwe has made significant progress on ease of doing business indicators with the World Bank saying that they have been tangible improvements including greater transparency and efficiency, better regulation, fewer, faster procedures and lower costs.
In an interview with Equity Axis on the side-lines of the World Bank Group Stakeholder Breakfast where policy, institutional, legal and regulatory reforms targeted at improving the business environment in Zimbabwe were presented by Technical Working Groups, Country Coach on Ease of Doing Business, Eric Zinyengere said Zimbabwe is getting towards the right way in reforms meant to improve the business environment.
In 2015 Zimbabwe was ranked 171st of 190 countries and in the last reporting period 2019, Zimbabwe was ranked 155th.
“I believe that reforms have started and the political will we see now – the attention that we have been given by the Office of the President means that there is already a significant drive towards making sure that we begin to have more consistency on how those things are done.
“The Rapid Results Initiatives that we are running, the 76 – day period in itself is a reflection of the need to drive the process. It’s not about now it about moving forward and say those
“That is exactly why a process like ease of doing business is so important. Because remember doing business targets the local business and if you can get local investment you build confidence to foreign investors. So if you get local businesses feeling that they can start here, you can start a business, register your property and you can do these things easily and if investors see from outside they will be attracted to do business in the country,” said Zinyengere,” adding that the process of actually improving the doing business environment will definitely have a ripple effect even on external investors.
Leaders and policy-influencers from Government, private sector and professional bodies met in the capital on Monday to review Zimbabwe’s progress on the ten World Bank Doing Business (DB) indicators.
Technical working groups have been formed which are reporting progress in seven out of 10 indicators. There are reporting on the progress of dealing with construction permits, getting electricity, registering property, getting credit, trading across borders, enforcing contracts and resolving insolvency.
Doing business indicators focus on regulations relevant to the life cycle of a small to medium sized business, in the formal sector and are measured for the largest business city in each economy.
The government, last year set April as the deadline for the completion of the 2019 Ease of Doing Business in Zimbabwe Reforms Project.
The project is aimed at ensuring that investment promotion and economic development targets set in the Transitional Stabilisation Programme are achieved by focusing on a favourable climate for companies to operate in line with Vision 2030 for an upper middle- income economy.
The Deputy Chief Secretary to the President and Cabinet Dr Ray Ndhlukula said technical teams are already working on proposals to ensure removal of challenges in setting up companies with deadline for finalisation of the project being on April 29 this year.
Economies are ranked on their ease of doing business, from 1–190. A high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a local firm. The rankings are determined by sorting the aggregate scores on 10 topics, each consisting of several indicators, giving equal weight to each topic.
Interestingly, when evaluating potential investment zones, foreign investors largely rely on the ease of doing business country ratings.
Zimbabwe is ranked 159 out of 190, according to the World Bank’s Doing Business 2018 index, signifying an unfavourable interaction between government and entrepreneurs.
Within the 10 key areas, Zimbabwe was ranked 180 out of 190 for starting a business, 175 out of 190 for dealing with construction permits, 161 out of 190 for getting electricity, 108 out of 190 for registering property, 105 out of 190 for getting credit, 143 out of 190 for paying taxes, 153 out of 190 for trading across borders, 166 out of 190 for enforcing contracts, 155 out of 190 for resolving insolvency, 89 out of 190 for protecting minority investors and labour market regulation.
Countries are partly assessed on the results of questionnaires completed by chosen actors in relevant sectors. The deadline for submission of the questionnaires is April 29, 2019.
Technical support for the policy, institutional, legal and regulatory reforms being undertaken by Government is provided by the World Bank Group with funding from Zimbabwe Reconstruction Fund (Zimref).
Analysts agree that lessons can be drawn from Rwanda, a country which is ranked number two, after Mauritius, in the ease of doing business in Africa. Lessons from Rwanda call for the need to implement reforms so that the Special Economic Zones (SEZ) can be implemented to attract investment needed to resuscitate the economy.
Among other reforms, the Rwanda Development Board (RDB) was formed in 2008 after merging eight different institutions. The vision of the RDB was to move GDP per capita from $720 to $1,200, to increase exports, to advocate for policy change, assess the needs and develop the labour market.
Moreover, opening up a business in Rwanda takes less than six hours at zero cost and this can happen online.
Equity Axis News
Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment.