Govt to avail National Competitive Act

via Govt to avail National Competitive Act – Sunday News Mar 27, 2016

Noble Ncube, Business Reporter
THE Government is in the process of addressing factors that are making the economy uncompetitive by coming up with the National Competitive Act which will work as a guideline for the National Competitiveness Commission (NCC) which will be set up to spearhead improvement of doing business and support local manufacturers, an official has said.

Local manufacturers have suffered huge losses and minimum growth rate due to cheap imports that have continuously flooded the country. As a result the Government has been working on a National Competitive Act to protect local producers and improve the country’s business competitiveness.

In an interview, Industry and Commerce Deputy Minister Chiratidzo Mabuwa said as a means of protecting local manufacturers, the Government was working on the Act that will identify problems that affect smooth flow of doing business.

“As a way of protecting local manufacturers and bringing about business growth, we are working on setting up the National Competitive Act. This Act is to supplement the work of the NCC. We want to identify and toothpick any bottlenecks that make doing business hard.

“To realise that the issue is of crucial importance, the ease and cost of doing business is deliberated in the President’s Office. We want to create a competitive environment between local manufacturers and foreign companies at the same time restoring competitiveness on local goods,” she said.

The Deputy Minister said the National Competitive Act will help improve local industrial capacity utilisation and facilitate new investments in order to boost production and reduce the country’s huge import bill.

The establishment of the NCC is one of the initiatives being carried out by Government to improve ease of doing business in the country.

According to the latest World Economic Forum (WEF) Global Competitiveness Index, Zimbabwe remained near-flat ranking 125 out of 140 countries.

In 2014, manufacturing sector capacity utilisation was 36,3 percent and Government fear that it might drop to below 30 percent by the end of the year if efforts are not tabled to boost production.

She said the Commission will be tasked to restore competitiveness on local goods. The most key area attracting Government attention is the labour market, with investors saying laws are unfavourable to them. Local industries have said high labour costs are bleeding operations.

Last week during the Zimbabwe/South Africa Industry and Trade Initiative (ITI), Deputy Minister Mabuwa said while it was a noble venture for the South African companies to come and invest in the country, it was also imperative to protect the local manufactures in the business climate. She said there was need for firms to engage in mutually beneficial deals.

“We have to understand the Sadc rules of origin in relation to finished goods. The rules require countries to trade with products originally manufactured in those respective countries. This will help improve competitiveness of doing business and quality of local products. It also helps to facilitate value addition and beneficiation of goods,” she said.

The setting up of the NCC follows a study on the Cost Driver Analysis of the Zimbabwean Economy undertaken by the Ministry of Industry and Commerce that recommended an improvement in the ease of doing business to achieve economic growth.

The Commission would among other things be responsible for leading the business reforms agenda through carrying out key functions such as continuously monitoring the cost drivers in the business and economic environment, and advise on measures to be taken to address current and emerging cost challenges.

As a result, the Act will review all new business regulations and provide recommendations on their impact to the cost of doing business and competitiveness and recommend amendments and repeals of old regulations that heap unnecessary burden on business.

Local businesses have highlighted that more work needs to be done on the ease of starting a business, dealing with construction permits, protecting minority investors, paying taxes, trading across borders, enforcing contracts as well as resolving insolvency.