Competitiveness summit to solve critical economic issues

Source: The Herald – Breaking news.

Business Reporter

THE National Competitiveness Commission Summit held in Bulawayo last week could not have come at any better time, given growing calls from the business community for authorities to look into constraints weighing down Zimbabwe’s businesses.

President Mnangagwa headlined the event, demonstrating the Government’s commitment and desire to continue improving business conditions to support business and economic growth.

The President had already shown that his administration was alive to the urgent need to address the multiplicity of issues hindering business operations across the economy, including regulations, fees and permits administered by statutory bodies.

Challenges weighing on business include multiple taxes, exchange rate disparities, restrictive regulations, the growing informal sector and high costs of and limited power supply.

At the NCC Summit in Bulawayo, industry leaders said regulatory and compliance costs constituted about 18 percent of total overheads, making it difficult for businesses, especially micro, small and medium enterprises (MSMEs) to operate viably.

Furthermore, these requirements discourage informal businesses from transitioning into the formal economy.

The Government is already working on various interventions to address challenges afflicting businesses, including initiatives under the Zimbabwe Industrial Reconstruction and Growth Plan (ZIRGP) 2024-2025, which seeks to improve the ease of doing business and competitiveness.

The strategy acknowledges that the industry faces high regulatory and utility costs, negatively impacting manufacturing.

To address the issues, the Ministry of Industry and Commerce, through the National Competitiveness Commission (NCC), is carrying out regulatory impact assessments to review regulations that hinder competitiveness.

Economic analysts who spoke to The Herald at the weekend said resolving the issues affecting business would greatly improve the country’s investment climate and attract both domestic and foreign direct investment (FDI).

Lower regulatory costs and improved infrastructure, they said, would significantly reduce business risks and encourage investors to commit long-term capital.

At the summit, President Mnangagwa reiterated his Government’s efforts and commitment to improving Zimbabwe’s business environment through streamlining regulations, addressing infrastructure gaps and fostering innovation.

In his keynote address at the summit, President Mnangagwa, reaffirmed the Government’s commitment to swiftly addressing business concerns.

“The Second Republic is fully aware of the challenges facing businesses and is intensifying efforts to establish a conducive operating environment that fosters innovation and investment,” he said.

“This will strengthen the competitiveness of the country’s manufacturing sector, particularly now that the African Continental Free Trade Area Agreement is in effect.

“I encourage stakeholders to seize the new market opportunities arising from these evolving trade conditions. Therefore, ensuring the competitiveness of our country’s goods and services remains crucial.

“All sectors must commit to the competitiveness agenda and elevate it to new heights.”

Proposed interventions by the Government and its arms will include streamlining business regulations, reducing compliance costs, and eliminating bureaucratic inefficiencies.

If implemented effectively, it is expected that the reforms would enhance Zimbabwe’s ease of doing business rankings, making the country more attractive to both domestic and foreign investors.

Addressing power supply gaps ranks among the biggest priorities economic analysts believe the Government and key stakeholders should address urgently. Economist Ms Gladys Shumbambiri-Mutsopotsi believes this could be a game-changer.

“Stable and affordable electricity supply is fundamental for industrial expansion. Without it, productivity remains constrained, and economic growth is stunted,” she said.

If power infrastructure is strengthened, industries could experience lower operational costs, leading to increased output and higher economic growth.

The Government’s commitment to infrastructure development, particularly in transport, is expected to enhance logistical efficiency and reduce costs for businesses.

Economic analyst Namatai Maeresera said: “Zimbabwe’s road and rail network has suffered years of under investment. Improving transport infrastructure will not only ease domestic trade, but also facilitate regional exports.”

Enhanced connectivity could also make the country a more competitive business hub in the Southern African Development Community (SADC) region.

Additionally, the focus on value addition and beneficiation of raw materials signals a strong desire to shift towards industrialisation.

Industrialist Dr Nxaba Ndiweni weighed in saying, “Value addition in key sectors like mining and agriculture is crucial for sustainable development. It creates jobs, strengthens value chains, and boosts foreign exchange inflows.”

If these measures are executed effectively, Dr Ndiweni said, Zimbabwe investment climate could improve, attracting more foreign direct investment (FDI), driving economic growth and export performance.