adminKUDZANAI GEREDE
As the promulgation of regional integration gains momentum now more than ever before, Zimbabwe and the rest of its regional counterparts are signing conventions pursuing the fruition of this noble idea envisioned as far back as the formation of the continental bloc, the Organization for African Unity now the African Union. An integrated African economy will unlock new markets and efficiency in trade among regional members without the cumbersome bureaucratic procedures that tends to slow down economic activities across the region.
However there is always an economic matrix each member state should be prepared to solve if they are to survive the vicious African Safari and the even more intricate global economic arena and this has been more pronounced in this age as the World Bank states- “The world economy has become more competitive than ever before at any historical period”.
With the advent of new technologies that have rendered the world a global village on one hand and a growing population with unmet needs due to scarcity of resources on the other hand, economies can longer afford a lax approach to business or else they risk extinction in the global economy.
According to a recent study by the World Bank, 60% of countries had announced measures designed to improve their business environment over the past year while 85 developing countries had implemented 169 separate reforms, an increase from 154 in the previous year.
The study further showed that Sub-Saharan Africa had the most significant progress in speeding the processes of starting a business with the rest of the world countries having made tremendous strides to ease processes of starting a business. Today it now takes a global average of 20 days to go through all legal processes and set up a business which is less than half the time it took in 2003 which was at an average of 51 days. The length of starting a business in Mozambique has fallen from 168 days to 19 in the last 12 years.
Howard Rosen an Internationally acclaimed Competitiveness expert says there is an increased competition of products, emergence of new technologies and need to expand sales into external markets hence the need for competitiveness.
This comes at a time when there is global financial instability especially amongst the leading economic giants such as the European Union and Asian powerhouse China and Japan whose economy has remained stagnant for years. This is compounded by a general slowdown in international trade that has led to stagnant uptake of products and services.
With such competition raging outside our borders, what are the odds for Zimbabwe’s economy as we integrate with our regional competitors in Tripartite Free Trade Area under the auspice of African Union?
The recently launched Zimbabwe National Competitiveness Report (ZNCR) provides a window on which to mirror the country’s preparedness to venture into the regional and global markets as a competitive entity.
Zimbabwe’s economic outlook reveals a need for investment capital to address key issues that hinges its capacity to be competitive such as infrastructure development among others. There is high cost of labor, low saving rates and high cost of finance that curtails local business from advancing towards external markets.
This has seen the decline of productivity levels in the country’s industrial index which has opened up space for external players to fill. The country currently sits at around US$ 4 billion trade deficit with products from regional competitors such as South Africa enjoying a competitive advantage over expensive locally manufactured goods.
“The long and short of this report (Zimbabwe National Competitiveness Report) is that we live in a world that produces goods and services, and those goods and services are priced somewhere else not in Zimbabwe therefore, we are not price-givers to the world, we are price-takers and the only way we can make money and sustain ourselves as a nation is if we reduce the cost of production and the only way we can reduce cost of production is if we make every facet of our lives competitive”, Mines and Mining Development Minister Walter Chidhakwa recently stated.
A tripartite arrangement consisting government, labor and business can provide lasting solutions to the country’s fortunes in identifying cost drivers which lead to high cost of production.
It is important to note that the TFTA presents an uneven platform for competitors across the region as the African states level of development varies.
As the case with the EU were south eastern states have tend to struggle with the more developed Western states having competitive advantage, Zimbabwe is then posed to thrive in the peaceful southern part of the continent.
According to the ZNCR, the country finds itself with a competitive advantage of having a highly skilled population, a literacy rate of 92%, abundant natural resources and a strategic geo-location that has the capacity to serve regional markets such as SADC and COMESA.
These identified advantages are then supposed to be considered in the formulation of various legislations that seek to protect and promote local business such that they compete at international markets.
Other economies have used the new technologies in advancing efficiency in staring up businesses, with e-governance also paying dividend in this fast-paced business environment.
Online Reporter