Private sector should ‘feel’ reforms: Expert - Zimbabwe Situation

Private sector should ‘feel’ reforms: Expert

Source: Private sector should ‘feel’ reforms: Expert | The Herald 12 SEP, 2019

Private sector should ‘feel’ reforms: Expert

Tawanda Musarurwa Senior Business Reporter

Zimbabwe’s Ease of Doing Business reforms should not just improve certain aspects, but should make the business operating environment work as a whole, an expert has said.

The Ease of Doing Business (EoDB) index is a ranking system established by the World Bank Group.

The index measures reforms in 11 areas, namely: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency, and labour market regulation.

Although Zimbabwe’s Ease of Doing Business Reforms in the past may have recorded several gains, the problem is that they have largely been disaggregated.

World Bank doing business consultant Eric Zinyengere said it is important for the Zimbabwean authorities to implement the reforms in such a way that the business operating environment improves universally.

“When it comes to the doing business ratings that are utilised by the World Bank, there are essentially three things that are being looked at. First, what is going on with the regulations, and that is to do with the time and the cost of those regulations.

“They also look at those regulations in respect of the laws, policies and procedures. So we are looking at this to say there are two key players, there is Government and there is the private sector or the companies associated with that.

“Now when the doing Business rankings come out each year, you get this ranking and you are number 155 out of 190 countries. I think this year has been a clear indicator of some of the challenges we face in how the ranking is conducted.

“What I mean by that is when a questionnaire is asked of an industry player and they might be asking questions about trade across borders, and they might be asking specific things as to the ease of doing business indicators. However, when someone responds, they are not responding in isolation, they are responding in totality,” said Mr Zinyengere recently.

Zimbabwe launched its Doing Business Reform Programme 2019-2020 last week.

Similar reforms have not yielded significant improvements on the World Bank’s rankings.

Despite the reforms beginning in 2015, Zimbabwe is still ranked lowly on position number 155 out of a possible 190.

Added the World Bank consultant: “So if one is having challenges in doing business in general, even though I’m being asked a very specific question, I must still respond and say ‘you know what, it’s not working’ because of the fact that you are looking at a broader scale and the individual is being addressed, not only from the perspective of the doing business indicators. As such us, trying to address the doing business challenges has to take a very holistic approach, not only looking at the World Bank’s indicators but fixing the doing business environment in totality.

“Because trying to fix one thing and saying it will help with the rating it will not necessarily do so because when the private sector now responds they still respond and say ‘well that’s not the case’.

“Previously we submitted 16 reforms that we are saying the teams have done, but over 70 percent came back as ‘these will not be recognised because your private sector said it’s not true’.”

Mr Zinyengere acknowledged that, in respect of Zimbabwe’s previous reforms, over eight pieces of legislation had been enacted, over 11 regulations promulgated and some institutional reforms had been put in place, but “more still needed to be done”.

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