World Bank gives Zim poor ranking

According to the latest World Bank report on Ease of Doing Business, the country is ranked 171 out of 183 countries.

Although Zimbabwe has recorded economic recovery following the adoption of a multi-currency system in February 2009, economic growth is still stifled by political and economic factors resulting in the country being ranked poorly in terms of doing business.

“Since 2009, at some point there was improved economic performance. However, that growth is being choked by overriding impediments such as lack of funding, political risks and inconsistent economic policy environment.

“These result in the country being ranked poorly in terms of ease of doing business,” said BancABC group economist, Mr James Wadi.

He said the ranking by World Bank also meant that Zimbabwe did not have competitive environment to strategically position any business set up by potential investors.

“For example, if an investor wants to start up a business in a manufacturing sector the viability of that project is likely to become uncompetitive due to inconsistency in power supplies, lack of funding as well as lack of clarity on indigenisation policy.”

“The cost of borrowing money is high in an environment characterised by election sentiments,” he said.

Mr Wadi said it was imperative for Government and other stakeholders to improve its rankings on ease of doing business by addressing major fundamentals such as the country’s political risk and economic issues.

Another economic analyst, Mr Christopher Mugaga, said the country’s soaring external debt estimated to be around $10 billion also worsened Zimbabwe rankings on ease of doing business.

He said technological factors like the computerisation of the Zimbabwe Stock Exchange were critical in improving the country’s rankings.

“Because of the absence of computerisation of the ZSE, for example, if one buys shares on the stock exchange, it takes an average of seven days to confirm the transaction. “This negatively affects Zimbabwe’s rankings on ease of doing business.

“Zimbabwe’s external debt is almost $10 billion, a figure which is 118 percent of the country’s Gross Domestic Product and this indicates to investors the uncompetitiveness we have in terms of doing business over other countries,” he said.

Ms Wendy Mpofu said policy inconsistencies affected the country resulting in the country being ranked poorly in terms of doing business.

“There is a lot of political bickering within the GNU, which has outlived its lifespan.

“The political risk in the country can be addressed through elections. Zimbabwe needs to go for elections like yesterday, so that if one Government is in power we do not have contradicting policies,” she said.

The World Bank’s Doing Business indicators include dealing with construction permits, getting electricity, access to credit facilities, investors’ protection, and payment of taxes as well as trading across borders.