ZIMBABWE’S standing as an investment destination plumbed fresh depths in a World Bank rating unveiled in Harare yesterday, moving from 145 to 153 on an average weighted ranking of 175 countries.<
The country’s low rating is an indictment on government policies as it indicated that the country was among 25 countries “making it more difficult for businesses”.
The ranking comes at a time when the country’s monetary and fiscal authorities have embarked on a whirlwind tour of mainly Asian countries to lure investors and help turn around the ailing economy which has suffered a cumulative gross domestic product (GDP) decline of more than 30% between 1999 and 2005.
The rating, contained in the World Bank’s Doing Business 2007: How to Reform report, used 10 criteria for the ranking of countries and Zimbabwe scored dismally in almost all of them.
Its ranking was the worst on dealing with licences index, where it moved a notch up to 171 on the current ranking.
Trading across borders obtained the same ranking as last year at 168, with the cost of importing a container pegged at US$4 565, while starting a business was ranked 137, from 128 last year.
Licensing procedures take up to 481 days, while firing costs are equivalent to 446 weeks of salaries, according to the World Bank report.
Director liability had a very low ranking at one. The highest ranking for director liability is at 10, with the United States, where Enron directors were recently jailed after being held responsible for the collapse of the company, having scored 9.
Mungai Lenneiye, the new World Bank country manager for Zimbabwe, said the ranking had not factored in issues of expropriation, transparency in the tender processes as well as the macro-economic environment.
Analysts indicated that these factors could have given Zimbabwe an even more unfavourable score had they been factored into the rating.
Industries that remain in business are operating below capacity.
The report said while Africa had lagged behind all other regions in the pace of reform, the continent this year ranked third and was behind only Eastern Europe, Central Asia and the OECD high-income countries.
Two thirds of the African countries made at least one reform, and Tanzania and Ghana ranked among the top 10 reformers.
“Several countries — including Bolivia, Eritrea, Hungary, Timor-Leste, Uzbekistan, Venezuela and Zimbabwe — went backward,” the report said.