Zim Still bad for Business –– WB

DESPITE positive changes on the political front and adoption of a multicurrency system to control inflation, Zimbabwe is still one of the worst places to do business in the world.

According to the Doing Business Report for 2009/10 released by the International Finance Corporation of the World Bank last week, the country has moved to position 159 in the ease of doing business rankings ahead of only two Southern African peers — Angola and the Democratic Republic of Congo in the 183-nation report.

Although its ranking is one place better than last year, authorities say the country has reformed so much that it merits a better ranking.

A would-be investor in Zimbabwe, the report showed, requires 1 426 days to fully complete the paper work and building exercise of a warehouse compared to an average of 260 days in other parts of sub-Saharan Africa.

Mauritius, ranked 17 in the report is the top sub-Saharan economy for two consecutive years.

Zimbabwe however achieved a slight gain in world rankings for doing business after being buoyed by a great leap in revenue generation policies, the World Bank report has shown. But bureaucratic inertia  results in investors taking more time in constructing basic structures such as storage facilities.

Exports for Zimbabwe’s largely import-driven economy are also likely to remain subdued after the World Bank report indicated that it costs three times the region’s average to export a container outside the country.

On paying tax, the country jumped 28 positions up to 130 compared with the previous year. The report attributed the changes to policy reforms.

Getting credit, the report further stated, continues to be difficult for many as shown by a drop in four positions to 109. This comes on the back of improved rankings in registering  property.

However starting a business will cost five times more in Zimbabwe compared with Sub-Saharan region’s average.

This  means that industry will face an uphill task to secure US$1 billion credit required to jumpstart economic activity.

With banks charging what most companies view as unviable interest rates, it could take more time before industrial activity begins to tick thereby making government more remote.

Despite making a step up the ladder, the government could struggle to attract investment after the report indicated a further drop to 119 from 114 recorded last year for the country’s commitment in protecting investors.

Singapore maintained its position at the top for the second consecutive year.

The 2010 report is the seventh edition of annual reports investigating regulations that enhance business activity and those that constrain it.

On starting a business Zimbabwe was placed 145 on the ladder and it performed dismally in dealing with construction permits, to merit 178th place.

Zimbabwe fared badly on the employment of workers and was ranked 142 but better in registering property.

On getting credit and protecting investors, Zimbabwe was placed 113 and 119 respectively. Empowerment legislation has rattled foreign investors who fear losing their businesses.

 

Bernard Mpofu in Berlin, Germany

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