Source: Zim far from it: WEF – DailyNews Live
Eric Chiriga 28 September 2017
HARARE – Zimbabwe is “far” from improving its `ease of doing business’,
the World Economic Forum (WEF) has said, as it once again ranked the
nation among countries with poor global competitiveness in its latest
ratings.
It said actually, the prevailing economic environment has “made it harder”
to do business in the investment-starved country.
While the economically-troubled southern African nation’s global
competitiveness improved, marginally, jumping two notches up the ladder,
it remained among the worst, with WEF’s Global Competitiveness 2017/18
Report ranking it 124th out of 137 countries.
The Geneva-based international organisation – best known for its annual
Davos meetings, which pull influential global business and political
leaders – said “those who trumpet Zimbabwe’s reported improvement in the
`ease of doing business’ index will be discomforted by these findings. Far
from making it easier to do business, policy instability and official
inefficiency has made it harder”.
“It is easier to access finance, not because conditions of doing business
have improved or banks are any healthier, but because credit demand has
fallen,” WEF said in the report.
This comes as the country risks sliding back to its 2008 economic
recession, amid rebounding foreign currency crisis and cash shortages,
among other escalating challenges.
“Zimbabwe is ranked 13 from the bottom – little change from when it was 12
places off the floor,” WEF said in the latest survey, adding that
“certainly, in Zimbabwe, in the absence of exchange rate adjustment, it
will be extraordinarily difficult, probably impossible, to restore
competitiveness”.
“The country’s overall score of 3.32 (out of 7) is the lowest since 2010 –
a contradiction on the lack of success of frequent claims that Zimbabwe is
improving its Doing Business profile,” it added.
Harare, which has a bureaucratic administration, has been making frantic
efforts to improve its `ease of doing’, one of myriad factors dampening
its attractiveness as an investment destination.
However, authorities have reported making progress in enhancing the `ease
of doing’ – efforts spearheaded by the Office of the President and Cabinet
– by improving the process of starting a business, strengthening the
protection of minority investors and relaxing the acquisition of
construction permits and property registration.
WEF said while Zimbabwe’s economy recovered in the period of 2010-11 –
during a power-sharing deal between 93-year-old President Robert Mugabe
and long-time rival, opposition MDC leader Morgan Tsvangirai, its score on
the global competitive index has “flat-lined”.
“Zimbabwe’s score hit a low of 2.77 in 2009, rebounding 20 percent over
the next two years on the strength of dollarization, but since 2010, it
has flat-lined averaging 3.4,” WEF said.
It said Switzerland is tops in `ease of doing business’, with the highest
score of 5.86.
It is followed by the United States, while the worst is Yemen, ranked 137,
with a 2.87 score.
WEF added: “Zimbabwe ranks fractionally below the Sub-Saharan average 35
led by Mauritius in 45th position (4.52).”
Zimbabwe’s neighbours, South Africa and Botswana – among Africa’s best
performing economies, ranked 61 and 63 respectively.
The continent’s worst in sub-Saharan Africa was Cape Verde, sitting at
110.
“The two most striking changes…are the steep falls in the rankings of
South Africa (down 14) and Lesotho (down 11),” WEF said, adding that “Sadc
economies languish close to the bottom…with eight countries – including
Zimbabwe – in the bottom 20”.
For Zimbabwe, WEF said, the most striking changes over the past five years
were: the rise in policy instability, restrictive foreign currency
regulations and inefficient government bureaucracy.
It said “simultaneously, concerns about infrastructure (surprisingly),
access to finance and labour regulations have diminished”.
“Two striking concerns are the steep increase in concerns about foreign
currency availability and escalating alarm about political instability,”
it said, adding that “both are very realistic findings given the fact that
the country is currently facing a major discontinuity, which is bound to
have substantial and far-reaching implications for business”.
Corruption is also a factor blemishing Zimbabwe.
However, WEF said Zimbabwe is not entirely bad.
“The country has very favourable scores – ranked in the top 50 – for crime
and terrorism, women in jobs, education and professional management and
corporate reporting and auditing standards,” it said.
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