Govt improves investment climate

Source: Govt improves investment climate | The Herald April 27, 2016

GOVERNMENT is aiming to have reduced the period it takes to register a company to 15 days from the current 30 days as part of efforts to improve the doing business environment under the second 100 day Rapid Results Framework, which is being spearheaded by the Office of the President and Cabinet in partnership with the World Bank.Under the framework, Government set targets which include; reducing the starting a business period from the current 30 days to 15 days by May 13, 2016 and to have a final draft of the Companies Bill by May 13, 2016 under the Starting a Business and Protecting Minority Investors cluster.

The results will be reviewed at a workshop set to be held next month in Harare. The purpose of the review, which tallies with the speech made by President Mugabe is to update stakeholders on the developments and progress made so far in improving the business environment for both domestic and foreign investment in Zimbabwe.

The Office of the President and Cabinet embarked on the Rapid Results Initiative approach to the Ease of Doing Business in Zimbabwe as a response to President Mugabe’s call to improve the investment climate.

The second review, comes as the three Technical Work Groups have been reconfigured in order to bring more coherence, alignment and better co-ordination in the reform process. The re-configured Technical Working Groups are: Starting a Business, that was re-configured to be Starting a Business and Protecting Minority Investors; Protecting Minority Investors and Enforcing Contracts will henceforth be known as the Enforcing Contracts and Resolving Insolvency; Getting Credit and Resolving Insolvency becomes the Getting Credit; Paying Taxes and Trading Across Borders; and Dealing with Construction Permits and Registering Property remains unaltered.

The apparent success of the Rapid Results Initiative has encouraged Government to implement multiple Rapid Results Initiatives in all areas that demanded attention in order to improve and broaden the scope of enterprise productivity and economic growth for example agriculture, industry and mining. These will be necessary to streamline regulatory requirements and related levies which currently constituted a disincentive to the country’s exporters and to implement an array of infrastructural projects concluded with some friendly countries and cooperating partners last year.

The first 100 days were launched in September 2015 and since then notable progress, with the support of the World Bank Group has been made in improving the business environment for local entrepreneurs as well as laying the foundations to attract sustainable and mutually beneficial foreign direct investment.

The first 100 days review workshop on Ease of doing Business was held in Harare on December 17, 2015 where achievements were highlighted which included principles of more than eight pieces of legislation, by-laws and regulations were drafted while various processes within Government ministries, department and agencies were streamlined.

The achievements included proposed amendments made to the Companies Act, Shop Licence Act, Town and Country Planning Act, while new Bills have been drafted on Insolvency (which seeks to promote a culture of corporate rescue to preserve jobs in companies that are viable, though experiencing challenges); Movable Property and Securities Interest (which seek to permit responsible lenders to lend against movable assets as collateral thereby improving access to finance for SMEs in particular); and the Commercial Court (which will permit expeditious settlement of commercial disputes through accelerated processes).

Under the Property registration and Construction and Permits the targets include reducing the time for obtaining construction permits from 448 days to 120 days by 13 May 2016 and reducing the number of days required for registering property from 36 days to 14 days also by May 13 2016.

Goals under the Enforcing contracts and Resolving Insolvency cluster include improving the time and costing efficiency of contract enforcements by 75 percent and 10 percent respectively by May 13, 2016 and to put in place a legal framework and structures that will reduce the time within which an insolvency issue is resolved from 3.3 years to 1 year by May 13, 2016.

Paying taxes and trading across targets include reducing the cost to export and import by 30 percent by May 13, 2016 and to reduce the time taken to pay taxes from 242 hours to 160 hours by April 30, 2016. Getting credit cluster aims to operationalise a collateral registry and the credit reference system by April 30, 2016.

Another highlight was the consolidation of the process to pay taxes at the Zimbabwe Revenue Authority (ZIMRA) by ZIMDEF and NSSA through the adoption of a single Window Tax Payment System, to reduce time taken in making payment at various agencies. According to the World Bank Report of 2015 Zimbabwe is ranked 155th out of 189 economies on the Ease of Doing Business globally. It is expected that the rankings will be significantly improved in the next report following the implementation of the ongoing reforms.