Online Reporter
Judith Phiri, Zimpapers Business Hub
ECONOMIC analysts have said the ongoing reforms by the Government to cut business costs to accelerate economic growth, once fully implemented, will be pivotal in the smooth transition to and implementation of the National Development Strategy 2 (NDS2).
Zimbabwe is reviewing its regulatory conditions to ease the burden on businesses, reduce bureaucratic hurdles and lower compliance costs to improve the overall cost of doing business and competitiveness.
In line with the aspirations of Vision 2030 of transforming Zimbabwe into an upper-middle-income economy, the NDS2 is an economic blueprint to complete the second five-year medium-term development plan, riding on the success of NDS1, running from January 2021 to December 2025.
The NDS1 succeeded the Transitional Stabilisation Programme (TSP), a short-term economic blueprint implemented from 2018 to 2020. The Second Republic introduced the NDS1 as a roadmap for transformative and inclusive growth.
Building on NDS1, the forthcoming NDS2 will serve as the final phase of the country’s development agenda, driving it towards 2030 aspirations.
In an online webinar hosted by the Public Policy and Research Institute of Zimbabwe (PPRIZ) titled Zimbabwe Government Reductions of Licences, Permits and Fees: Opportunities and Risks for Business and Ordinary Citizens, economic analysts commended the Government for the ease of doing business initiatives.
With a commitment to review the levies, licences, fees and permits across 12 key sectors, the Government initiatives seek to simplify processes for businesses, ultimately fostering a more conducive environment for economic growth.
Prominent economist and Government advisor, Professor Ashok Chakravarti, who is also a member of the Reserve Bank of Zimbabwe Monetary Policy Committee (MPC), said the Government was going to ensure all sectors are reviewed.
“I’m part of the committee led by the Office of the President and Cabinet (OPC), which is actually reviewing these levies, licences, fees and permits to put the whole process in play. So the overview basically is that this exercise is going to continue to cover all sectors of the economy.
“We have already completed the livestock sector. We are working on the agricultural sector, agricultural production and inputs along with stakeholders,” he said.
“The tourism sector has been completed and it has been approved by Cabinet, while it is with President Mnangagwa for his assent. So once it is done, the reviews in tourism will be revealed.”
He said likewise, the transport sector has been completed and approved by the Cabinet, and next they will move on to the retail sector and then manufacturing, until all sectors of the economy are completed.
Prof Chakravarti said the matrices in which they compile all the data on levies, licences, fees and permits were being obtained with close consultation with all the relevant stakeholders.
He added: “This exercise is home-grown and while we do have support from international agencies, we have borrowed the methodology from the World Bank. It is led domestically and it has the political will behind it, which is why it is progressing.”
“So the logic behind it is very simple, if we are to attain an upper-middle-income status, we require very substantial rates of growth of seven percent plus.
“As you know, because of the current situation in which we are isolated from international finance, domestic resources are only adequate for us to achieve rates of maybe four, five or six percent.”
Prof Chakravarti said the only way the country could achieve higher rates of growth was through improved productivity, including agriculture, manufacturing and tourism sectors, among others, by creating an enabling environment for businesses.
National University of Science and Technology (Nust) executive dean for the Faculty of Commerce, Dr Peter Nkala, said the new reforms were going to be of benefit to both businesses and citizens.
“There are going to be benefits for small to medium enterprises (SMEs), for smallholder farmers and also for ordinary citizens.
“Then, for ordinary citizens, I would say the ease of doing business itself makes it easy for those who want to get into the SME sector.
“If you have a sector to do business, the process has been simplified now with fewer requirements and lower fees to deal with,” he said.
Then there is going to be a reduced cost for citizens.
“I’m sure that we are going to see a lot of other fees that are going to come up, making things affordable to the ordinary citizens who will also benefit from less bureaucracy.”
He said the new reforms will ensure businesses will be able to compete, have a market share and ensure profitability, while promoting the formalisation of MSMEs are a major contributor to Zimbabwe’s economy, employing millions and contributing significantly to the gross domestic product (GDP).
Adding his input, Mr Ernest Mujongondi from OPC, said all these efforts by the Government were going to benefit businesses and citizens for the betterment of our economy.
He said: “We believe that if the reductions are going to financially impact the regulatory sector, it indicates that our regulatory framework is not the right size and therefore in NDS2 we have made a proposal to undertake the review of our regulatory institutional framework.”
Mr Mujongondi said this will ensure that they ascertain whether over 40 regulators are needed or fewer will do and can be supported by the economy.
Giving examples, he said the country could benefit from best practices also being done in other countries like Rwanda and Seychelles, whose licensing and regulation are mostly done by centralised entities.
Economist, Trade and Investment Specialist, Professor Tapiwa Mashakada, who is also the Former Minister of Economic Planning (2009 to 2013), said reducing the cost of doing business was key to luring domestic and foreign investors as well as stimulating economic growth.
“However, the slashing of these licences, permits and levies is not enough per se until the requisite regulation is reviewed or revised. We need new statutory instruments, a new regulatory environment and new laws that will effect these good Cabinet measures,” he said.
He commended the Government for doing a good job and revising its regulatory and tax framework in order to reduce the cost of doing business, while it must also be done in a manner that does not compromise health and safety standards, including the environment.
Prof Mashakada called for looking at the implications of the measures on tax revenues.
Wrapping up the discussion as the facilitator, Lupane State University (LSU) lecturer in Economics, Ms Pretty Nyathi called for all stakeholders’ participation in reforms consultations to ensure all inputs are incorporated for policies that contribute to economic development.
