What is the current ranking of Zimbabwe on the World Bank doing business report index and why is the country poorly ranked, what needs to be done to improve the ranking?

 Answer

 Zimbabwe is currently ranked at 155 out of 189 countries in the World Bank Ease of Doing Business Index of 2015. The World Bank DOING BUSINESS investigates the quantitative indicators on regulations that enhance business activity and those that constrain it. Ease of Doing Business measures aspects of regulation affecting 11 areas of the life of a business.

 The areas included are-

  • starting a business;
  • dealing with construction permits;
  • getting electricity;
  • getting credit;
  • registering property;
  • protecting minority investors;
  • trading across borders;
  • contracts
  • Resolving insolvency.

 Zimbabwe, bench marked against the regional ranking

 

 

Countries that tend to do best are those countries that have rules that facilitate market interaction, without needlessly hindering the development of the private sector and those that have fewer and less time consuming procedures. For example before the reform process, Zimbabwe had 9 procedures required to START A BUSINESS as opposed to the OECD average of 4.7 procedures and 90 days as opposed to 8.3 days to start a business respectively. So we generally have many procedures with a number of agencies required to give their approvals. The ZIM Asset Cluster based approached has  facilitated  a ONE  GOVERNMENT APRROACH, with Central Government, Ministries and Government Agencies  working together to ensure that there is seamless service provision.

 

In countries that are ranked highly on the World Bank Ease of Doing Business ranking, the proliferation and use of communication technologies has transformed Government operations as internet provides a new platform for delivering Government information and services that enhances efficiency and transparency of public administration. Zimbabwe now has the internet infrastructure to modernize government operations. The Office of the President and Cabinet through the Public Sector Modernisation Department is currently implementing the Flag Ship projects, which have resulted in marked improvements at the operations in the Passport and Deeds Offices. Other projects which are being pilot tested by Government, include, on-line application for liquor licences, paying taxes and e-health.

 

2.       What are the prevailing realities in the Doing Business Environment in Zimbabwe?

 Answer

 

The prevailing realities in the Ease Of Doing Business environment in Zimbabwe is a lack of coordination between Government Ministries, Local Authorities and Government Agencies which have resulted in numerous procedures for entrepreneurs necessitating better coordination in order to  reduce the procedures, time and cost of Doing Business in Zimbabwe. Whilst the Zimbabwe Investment Authority has made efforts in the past to stream line these procedures, the process of reviewing and streamlining procedures has been slow. Hence, the need to have a coordinated approach spearheaded by the Office of the President and Cabinet, which has the responsibility to coordinate Zim Asset implementation

 

3.       What necessitated the idea of doing business reforms and what progress has been made thus far?

 

Answer

 

The implementation of the ZIM Asset Blue Print 2013-18 calls for the mobilizations of resources both internally and internationally. This can be done through effective collection of taxes and plugging of elicit outflows of resources, better use of remittances from the Zimbabweans in the Diaspora, more targeted planning and prudent resource allocation, more stringent rules on corruption, reviewing diamond revenue transparency, and improve revenue collection in order to achieve set goals. It also calls for the Government to mobilize internal investment, by facilitating our entrepreneurs to start and grow their businesses and by providing a legislative framework for the setting up Special Economic Zones, and facilitating private/public joint ventures. With respect to Foreign Direct Investment as a country, when we look at our competitiveness, we see that we have a skilled population and a relatively well developed infrastructure but we are not receiving the FDI flows that we expect, hence the need to reform in order to reduce the costs of doing business and also to ensure that we have clearer investment policies that facilitate investment.

 

The ZIM Asset Blue print has provided us with a framework in order to ensure that we unlock the enablers that will result in more investment which include clearer investment policies, financial sector confidence building and stability, e-enabled services, operational infrastructure, links between local and regional value chains.

 

The 10 Point Plan enunciated by His Excellency President R. G. Mugabe also gave impetus to these measures by calling for the reform of the investment climate in order to mobilize investment. Zimbabwe has achieved major milestones, in mobilizing resources with respect to engagement with the international creditors so that we could clear our debts and unlock new funding.

 

 The Ease of Doing Business Reforms will transform the investment climate in the country and lead to significant changes in our Company Act. The Joint Venture Legislation has now been enacted in order to facilitate public/private partnerships, and the Special Economic Zones Bill is at an advanced stage. The Reforms are also facilitating the collection of taxes through ZIMRA and addressing parallel fund administration.

 

Government, through the Public Service Commission, is reviewing the Government wage bill in order to ensure that funds go towards the productive sectors, whilst ring fencing expenditure towards the social sectors in order to ensure that growth of the economy does not leave anyone behind.

 

The process of improving land administration and bankability of land offer letters has been making some headway as the collection of levies will ensure that the administration of land continues to be further improved.

 

Reform of the procurement system of Government is at an advanced stage and the Bill should be ready by June 2016 ensuring that Government entities procure at effectively and efficiently and also at best advantage.

 

 The Ministry of Industry and Commerce and the Ministry of Small to Medium Scale Enterprises has put measures in place in order to formalise the informal sector and make them contribute toward the fiscus, and is also supporting value chain development to link our producers to regional and global markets.

 

The Diaspora Policy which has been finalised will hopefully lead to mobilization of remittances for the productive sector, and in this regard the Insolvency Regulations and accelerated efforts to create a Credit Registry will assist in the mobilization of investment for some of our companies who have a good credit history.

 

4.       Do the realities on the ground match the talk and the spirit of the reforms?

 

Answer

 

Government recognise that the reform process will require a robust communication strategy and feedback mechanisms in order to ensure that the reforms achieve the necessary impacts. As you may be aware, ZIM Asset implementation recognises the important role of stake holders in the process of policy formulation, implementation and monitoring of impacts. Thus the implementation architecture of ZIM Asset has a special role for the citizenry, private sector, and development partners  who if fully engaged can also be the channels for communicating the reform process and  getting feedback on implementation in order to ensure that the programmes have the intended impacts. Thus the Ease Of Doing Business Technical Working Groups are multi-sectoral and multi-stakeholder. It is also recognised that the reform process also requires that those implementing the reforms have a culture change in terms of service delivery in order for them to provide information and also empower stakeholders.

 

As part of the reform process, the Office of the President and Cabinet is launching a Zim Asset Communication Strategy by May 2016, produced after stakeholder consultation. The Strategy will focus on the need to communicate with the various stakeholders so that they play their role. For its implementation, it will require that platforms that ensure regular feedback are created as programmes are implemented. The Ease of Doing Business Technical Working Groups have already instituted feedback mechanisms in order to ensure that there is stakeholder buy-in as they develop the various reforms. Moreover, many of the reform Committees have also consulted widely with various stakeholders in order to get their views to ensure that the reforms have the intended impacts.

 

In the coming months, Government Ministries will make more use of their web-sites and various communication platforms in order to ensure that the reform process is communicated with a focus on feedback mechanisms.

 

5. What is the way forward in improving the Ease of Doing Business in Zimbabwe?

 

Answer

 

September 2015, the Office of the President and Cabinet initiated the first 100 Day Rapid Results Initiative on the Ease Of Doing Business, which saw the setting up of Five Technical Working Groups on the following Thematic areas:

  •   Starting a Business and Protecting Minority Investors;
  •   Enforcing Contracts and Resolving Insolvency;
  •   Getting Credit;
  •   Paying Taxes and Trading Across Borders; and
  •   Dealing with Construction Permits and Registering Property

 

A review meeting of the first 100 Day Progress indicated that considerable progress had been made by the Working Groups including the following mile stones: Online linkages of the Harare City Council with its District Offices, and various draft pieces of legislation including, the Commercial Court Bill, the Collateral Registry and Credit Reference System and the Consolidated Insolvency Act .

 

The Second 100 Day initiative was launched in February 2016 and will focus on the unfinished business of the process initiated in September 2015, amongst which will be amendments to the Company's Act and will also focus on implementation of reforms and awareness campaigns to ensure that the Zimbabwean Citizens take advantage of the reforms to start or grow their businesses.

 

Zimbabwe produced a Competitiveness Report for 2015 and is in the process of producing another report for 2016.  As a country we have recognised that we need to consistently bench mark ourselves against other countries in order to remain competitive and in order to do this, reviewing our procedures

 

How to contact us

Department of Public Affairs and Knowledge Management

First Floor Charter House Cnr Julius/ Samora Machel

P.Box Cy 7700, Harare

Telephone numbers: 04-707091-604-707091-6/ 795541/ 793132

  1. What is the current ranking of Zimbabwe on the World Bank doing business report index and why is the country poorly ranked, what needs to be done to improve the ranking?

 Answer

 Zimbabwe is currently ranked at 155 out of 189 countries in the World Bank Ease of Doing Business Index of 2015. The World Bank DOING BUSINESS investigates the quantitative indicators on regulations that enhance business activity and those that constrain it. Ease of Doing Business measures aspects of regulation affecting 11 areas of the life of a business.

 The areas included are-

  • starting a business;
  • dealing with construction permits;
  • getting electricity;
  • getting credit;
  • registering property;
  • protecting minority investors;
  • trading across borders;
  • contracts
  • Resolving insolvency.

 Zimbabwe, bench marked against the regional ranking

 

 

Countries that tend to do best are those countries that have rules that facilitate market interaction, without needlessly hindering the development of the private sector and those that have fewer and less time consuming procedures. For example before the reform process, Zimbabwe had 9 procedures required to START A BUSINESS as opposed to the OECD average of 4.7 procedures and 90 days as opposed to 8.3 days to start a business respectively. So we generally have many procedures with a number of agencies required to give their approvals. The ZIM Asset Cluster based approached has  facilitated  a ONE  GOVERNMENT APRROACH, with Central Government, Ministries and Government Agencies  working together to ensure that there is seamless service provision.

 

In countries that are ranked highly on the World Bank Ease of Doing Business ranking, the proliferation and use of communication technologies has transformed Government operations as internet provides a new platform for delivering Government information and services that enhances efficiency and transparency of public administration. Zimbabwe now has the internet infrastructure to modernize government operations. The Office of the President and Cabinet through the Public Sector Modernisation Department is currently implementing the Flag Ship projects, which have resulted in marked improvements at the operations in the Passport and Deeds Offices. Other projects which are being pilot tested by Government, include, on-line application for liquor licences, paying taxes and e-health.

 

2.       What are the prevailing realities in the Doing Business Environment in Zimbabwe?

 Answer

 

The prevailing realities in the Ease Of Doing Business environment in Zimbabwe is a lack of coordination between Government Ministries, Local Authorities and Government Agencies which have resulted in numerous procedures for entrepreneurs necessitating better coordination in order to  reduce the procedures, time and cost of Doing Business in Zimbabwe. Whilst the Zimbabwe Investment Authority has made efforts in the past to stream line these procedures, the process of reviewing and streamlining procedures has been slow. Hence, the need to have a coordinated approach spearheaded by the Office of the President and Cabinet, which has the responsibility to coordinate Zim Asset implementation

 

3.       What necessitated the idea of doing business reforms and what progress has been made thus far?

 

Answer

 

The implementation of the ZIM Asset Blue Print 2013-18 calls for the mobilizations of resources both internally and internationally. This can be done through effective collection of taxes and plugging of elicit outflows of resources, better use of remittances from the Zimbabweans in the Diaspora, more targeted planning and prudent resource allocation, more stringent rules on corruption, reviewing diamond revenue transparency, and improve revenue collection in order to achieve set goals. It also calls for the Government to mobilize internal investment, by facilitating our entrepreneurs to start and grow their businesses and by providing a legislative framework for the setting up Special Economic Zones, and facilitating private/public joint ventures. With respect to Foreign Direct Investment as a country, when we look at our competitiveness, we see that we have a skilled population and a relatively well developed infrastructure but we are not receiving the FDI flows that we expect, hence the need to reform in order to reduce the costs of doing business and also to ensure that we have clearer investment policies that facilitate investment.

 

The ZIM Asset Blue print has provided us with a framework in order to ensure that we unlock the enablers that will result in more investment which include clearer investment policies, financial sector confidence building and stability, e-enabled services, operational infrastructure, links between local and regional value chains.

 

The 10 Point Plan enunciated by His Excellency President R. G. Mugabe also gave impetus to these measures by calling for the reform of the investment climate in order to mobilize investment. Zimbabwe has achieved major milestones, in mobilizing resources with respect to engagement with the international creditors so that we could clear our debts and unlock new funding.

 

 The Ease of Doing Business Reforms will transform the investment climate in the country and lead to significant changes in our Company Act. The Joint Venture Legislation has now been enacted in order to facilitate public/private partnerships, and the Special Economic Zones Bill is at an advanced stage. The Reforms are also facilitating the collection of taxes through ZIMRA and addressing parallel fund administration.

 

Government, through the Public Service Commission, is reviewing the Government wage bill in order to ensure that funds go towards the productive sectors, whilst ring fencing expenditure towards the social sectors in order to ensure that growth of the economy does not leave anyone behind.

 

The process of improving land administration and bankability of land offer letters has been making some headway as the collection of levies will ensure that the administration of land continues to be further improved.

 

Reform of the procurement system of Government is at an advanced stage and the Bill should be ready by June 2016 ensuring that Government entities procure at effectively and efficiently and also at best advantage.

 

 The Ministry of Industry and Commerce and the Ministry of Small to Medium Scale Enterprises has put measures in place in order to formalise the informal sector and make them contribute toward the fiscus, and is also supporting value chain development to link our producers to regional and global markets.

 

The Diaspora Policy which has been finalised will hopefully lead to mobilization of remittances for the productive sector, and in this regard the Insolvency Regulations and accelerated efforts to create a Credit Registry will assist in the mobilization of investment for some of our companies who have a good credit history.

 

4.       Do the realities on the ground match the talk and the spirit of the reforms?

 

Answer

 

Government recognise that the reform process will require a robust communication strategy and feedback mechanisms in order to ensure that the reforms achieve the necessary impacts. As you may be aware, ZIM Asset implementation recognises the important role of stake holders in the process of policy formulation, implementation and monitoring of impacts. Thus the implementation architecture of ZIM Asset has a special role for the citizenry, private sector, and development partners  who if fully engaged can also be the channels for communicating the reform process and  getting feedback on implementation in order to ensure that the programmes have the intended impacts. Thus the Ease Of Doing Business Technical Working Groups are multi-sectoral and multi-stakeholder. It is also recognised that the reform process also requires that those implementing the reforms have a culture change in terms of service delivery in order for them to provide information and also empower stakeholders.

 

As part of the reform process, the Office of the President and Cabinet is launching a Zim Asset Communication Strategy by May 2016, produced after stakeholder consultation. The Strategy will focus on the need to communicate with the various stakeholders so that they play their role. For its implementation, it will require that platforms that ensure regular feedback are created as programmes are implemented. The Ease of Doing Business Technical Working Groups have already instituted feedback mechanisms in order to ensure that there is stakeholder buy-in as they develop the various reforms. Moreover, many of the reform Committees have also consulted widely with various stakeholders in order to get their views to ensure that the reforms have the intended impacts.

 

In the coming months, Government Ministries will make more use of their web-sites and various communication platforms in order to ensure that the reform process is communicated with a focus on feedback mechanisms.

 

5. What is the way forward in improving the Ease of Doing Business in Zimbabwe?

 

Answer

 

September 2015, the Office of the President and Cabinet initiated the first 100 Day Rapid Results Initiative on the Ease Of Doing Business, which saw the setting up of Five Technical Working Groups on the following Thematic areas:

  •   Starting a Business and Protecting Minority Investors;
  •   Enforcing Contracts and Resolving Insolvency;
  •   Getting Credit;
  •   Paying Taxes and Trading Across Borders; and
  •   Dealing with Construction Permits and Registering Property

 

A review meeting of the first 100 Day Progress indicated that considerable progress had been made by the Working Groups including the following mile stones: Online linkages of the Harare City Council with its District Offices, and various draft pieces of legislation including, the Commercial Court Bill, the Collateral Registry and Credit Reference System and the Consolidated Insolvency Act .

 

The Second 100 Day initiative was launched in February 2016 and will focus on the unfinished business of the process initiated in September 2015, amongst which will be amendments to the Company's Act and will also focus on implementation of reforms and awareness campaigns to ensure that the Zimbabwean Citizens take advantage of the reforms to start or grow their businesses.

 

Zimbabwe produced a Competitiveness Report for 2015 and is in the process of producing another report for 2016.  As a country we have recognised that we need to consistently bench mark ourselves against other countries in order to remain competitive and in order to do this, reviewing our procedures

 

How to contact us

Department of Public Affairs and Knowledge Management

First Floor Charter House Cnr Julius/ Samora Machel

P.Box Cy 7700, Harare

Telephone numbers: 04-707091-604-707091-6/ 795541/ 793132