via Ritesh Anand Column: Is Zim open for business? – The Zimbabwe Independent February 19, 2016
Rwanda is regarded as one of the most progressive countries in Africa over the last decade. In fact, Rwanda is the most improved economy worldwide since 2005, according to the World Bank Doing Business Report 2014.
Ritesh Anand
Radical reforms have made it easier for to set up a business, access credit, and pay taxes, boosting Rwanda’s ratings in the World Bank’s Doing Business Report. It came in 32nd out 189 countries as per the 2014 report after introducing reforms to ease doing of business in the country.
It now takes six working hours to register your business in Rwanda. In 2013, the Doing Business Report showed Rwanda second easiest to do business in Africa after Mauritius. How has Rwanda achieved so much progress in less than a decade and what hope is there for Zimbabwe to transform itself?
Economic transformation in Rwanda has been driven by the Rwanda Development Board (RDB), which was established in 2002 by President Paul Kagame. Reporting directly to the president, the RDB is independent and influential.
The RDB was set up by bringing together all the government agencies responsible for the entire investor experience under one roof. This includes key agencies responsible for business registration, investment promotion, environmental clearances, privatisation and specialist agencies which support the priority sectors of ICT and tourism as well as small and medium enterprises (SMEs) and human capacity development in the private sector.
Rwanda can truly claim to have created a one-stop shop. The RDB is built with global expertise. It is modelled on international best practice examples of Singapore and Costa Rica. It has advisory and hands-on support from global entrepreneurs and experts from Singapore Development Board, World Bank and the International Financial Corporation.
The RDB has a very simple vision statement: “To transform Rwanda into a dynamic global hub for business, investment and innovation”, and an even simpler mission statement “Fast tracking economic development in Rwanda by enabling private sector growth. The scope of our work includes all aspects related to the development of the private sector. This involves working with and addressing the needs of companies of all sizes (large, SMEs) and both local and foreign investors”.
How is it that such a small country with approximately 10 million people can have such a grand vision? With a much greater population, vast natural resources, highly educated and skilled population, how is it that Zimbabwe has failed to create a common vision and mission for the country. What is our vision? What is our mission?
According to the government economic blueprint, ZimAsset, our vision is “Towards an Empowered Society and a Growing Economy”.
Our mission is “To provide an enabling environment for sustainable economic empowerment and social transformation to the people of Zimbabwe”.
While Rwanda has focused on creating a dynamic global hub for business, investment and innovation, we have focused on economic empowerment and social transformation. There is nothing wrong with our vision that provides for an empowered society and economic growth. Zimbabwe must, however, recognise that we live in a global village and compete for capital and investment on the international stage.
To achieve economic growth we need investment, innovation and business. Empowerment can be achieved through economic growth and transformation. As the wealth of a nation grows, its people become empowered (provided that wealth is equally distributed).
Rwanda has made tremendous progress over the last decade and there are a number of lessons we can learn from them. Over the last decade, Rwanda has focused on creating a conducive business environment to attract investment. They have focused on business, investment and innovation.
In a dollarised environment, Zimbabwe desperately needs to focus on attracting investment. Domestic savings were destroyed by hyperinflation and remain depressed.
Attracting foreign direct investment (FDI) remains critical for Zimbabwe’s economic recovery. Even if the Lima process for clearing Zimbabwe’s outstanding arrears with the international financial institutions (IFIs) is successful, there is no guarantee that this will lead to an increase in investment flows to the country.
Investors will carefully evaluate to what extent Zimbabwe is open for business. The Lima process needs to be coupled with investment reforms and focus on improving Zimbabwe’s rankings in the Doing Business Index.
Like the RDB, the Zimbabwe Investment Authority needs to be transformed into a one-stop shop. Its board should report directly to the president and comprise of representatives from key ministries. It’s focus should be on improving the investment climate and ease of doing business.
Zimbabwe is currently ranked 155 out of 189 countries. Over the next five years, our target should be to be among the top 100 countries on the Ease of Doing Business rankings.
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