‘Devolution unlocks value of natural endowments’ - Zimbabwe Situation

‘Devolution unlocks value of natural endowments’

Source: ‘Devolution unlocks value of natural endowments’ | Herald (Business)

Michael Tome Business Reporter
TRADE development and promotion body, ZimTrade has called for the immediate implementation of devolution citing a plethora of economic benefits that could emanate from the process.

Devolution is a statutory decentralisation or delegation of decision making to lower levels of government which includes, provincial and district authorities. From an economic dimension it encompasses fiscal, investment, trade and administrative issues among  others.

According to ZimTrade, devolution unlocks the value of natural endowments and enhances the ease of doing export business since it provides an alternative to geographical centralisation of permit and license issuing offices which normally cause delays and increased costs of doing business.

Generally, the centralisation of government offices in the main cities has become detrimental to the smooth flow of business especially for those stationed in the outlying areas, miles away from the capital city.

Government through the Ministry of Finance and Development has vowed to apportion $310 million to devolution.

In a statement released by ZimTrade, the issue of licensing and permit issuance remain a bottleneck to the flawless conduct of export business rendering the country poor in terms of competitiveness index on the global level.

“One of the biggest impediments to export growth is the local regulatory environment which is not facilitative of trade. From 2016, ZimTrade undertook a Rapid Results Initiative which was aimed at improving the ease of doing export business.

“Most recurring findings across different sectors was the geographical centralisation of permit and license issuing offices which was causing delays and increased costs of doing business,” said ZimTrade in the statement.

In recent times Rwanda has been endowed with mega investments owing to investor friendly climate that allows investors to complete paperwork in approximately six hours, resultantly figures from Rwanda’s Development Board (RDB) show that US$2 billion worth of projects were registered in the country by the beginning of 2019, boosted mainly by manufacturing and mining projects.

The organisation is optimistic the government will take a leaf from Brazil which has recorded a boom in economic activity owing to the promulgation of devolution.

“Local governments can unlock opportunities through policy interventions that create a facilitative environment. As early as 2001, Brazil, which is one of the strongest emerging economies, had implemented economic devolution and 35 percent of the country’s municipalities had implemented fiscal incentive programmes and income generating initiatives,” said the statement.

It is the organisation’s anticipation that devolution will bring opportunities even to some secluded communities in four corners of the country considering the export potential in niche products or skills some of the regions possess.

While they are somewhat from small value chains, Mopani worms can be exported from Matabeleland, moringa from the Zambezi Valley, baobab and amarula from the low veld as well as arts and craft from Masvingo as they can contribute significantly if they are value added, certified and exported to the high-end markets earning the much-needed foreign currency.