Online Reporter
Michael Tome-Business Reporter
THE Confederation of Zimbabwe Industries (CZI) has proposed a Presidential directive compelling Government ministries, agencies, departments and regulatory bodies to cut licencing fees and charges to reduce regulatory costs burdening businesses by 50 to 70 percent by June 2025.
One of the country’s most influential lobby groups said this would ease business conditions and reduce the weight of excessive regulations on businesses and the economy as a whole.
CZI said there was a need for a Presidential directive to freeze any new regulations from being implemented until they are subjected to a Regulatory Impact Analysis and have demonstrated how they would promote competitiveness rankings, benchmarking with regional peers.
This comes after President Mnangagwa, in his address at the first meeting of the 2025 Cabinet Year recommended fees, licences, permits and regulations that promote economic development.
The Government has continuously worked to improve the ease of doing business to stimulate economic growth and attract more investment into the country.
Industry players say the economy has seen an increase in regulatory costs and licences over the past decade and this had seriously dented competitiveness as demonstrated by the country’s poor performance in global rankings and domestic products loss of market share to imports and limited export markets for Zimbabwean manufactured goods.
According to CZI, compliance accounts for about 18 percent of total overheads incurred by companies on average.
This comes as manufacturing sector firms are required to comply with requirements of a minimum of nine regulatory bodies, excluding central Government
This requires an average of three full-time employees to deal with regulatory issues only, while an average of 10 days per month is committed to processing or following up on all the regulatory requirements.
Zimbabwe has a total of 51 taxes and regulatory payments that need to be paid by a business compared to 7 and 11 in South Africa and Zambia respectively.
Regulatory authorities’ ability to collect even from struggling entities has further created incentives for introducing new regulatory bodies.
CZI argued that regulatory authorities were unjustifiably getting a lot of money, which manifested in the luxurious car purchases at a time industry and business in general were struggling.
“Our first recommendation is probably a Presidential Order, that all regulator fees be reduced, by 50 or 70 percent while they look at them on a case-by-case basis to see which ones are necessary and which ones are not, because we believe there was an error which led to regulators becoming more or less like cash cows in this economy.
“Regulators are the only ones immune to the current harsh economic realities because whether a company is making a profit or not, they are just collecting.
“We think there is merit in charging but the amounts are overstated, we think the best way is to just have an order which says all regulatory fees be reduced,” said CZI Chief Economist Dr Cornelius Dube in an interview.
Asked to justify the call for the Presidential order Dr Dube said, “These regulators were established by laws, there are Statutory Instruments that they use to collect money so we cannot wish away those laws.”
Presenting a paper to the Portfolio Committee On Industry and Commerce on February 11, 2025, the business member organisation also highlighted the need to have a Presidential directive to minimise tariffs and charges levied by key state entities.
“It is time for radical deregulation to save our industries and our businesses. We propose that there be a Presidential directive to the whole economy requiring ministries, agencies and departments and all regulatory authorities to reduce the burden and cost of regulations by 70 percent by June 2025.
“A Presidential directive to freeze any new regulations from being implemented until they are subjected through Regulatory Impact Analysis and demonstrate how they will promote competitiveness rankings and benchmark against our peers would be ideal,” CZI said.
This however comes at a time when the Zimbabwe Investment and Development Agency (ZIDA) has made strides in streamlining investment registration and licensing lead times from 21 to seven days as part of efforts to enhance the ease of doing business environment in the country.
ZIDA implemented a raft of measures under the One Stop Investment Services Centre (OSISC), which is a notable development under the ease of doing the business drive.
It has also amalgamated services of over 18 government departments to ensure timeous consultations and approval of business licenses.
Ease of doing business refers to the level of difficulty or ease with which businesses can operate, including starting a business, obtaining permits and licenses, dealing with taxes, and protecting investors, and other regulatory aspects.
It is an important indicator of a country’s business environment and can significantly impact investment attractiveness, and economic growth.
