REFORM-focused Zimbabwe has climbed 16 places to position 155 out of 189 countries ranked under the latest World Bank Doing Business report.
The 2016 World Bank report released on Tuesday night shows that Zimbabwe which has committed to far-reaching reforms to unlock foreign direct investment inflows recorded two positive reforms—getting credit and protecting minority investors as measured by the Doing Business methodology during the course of this report’s data collection cycle (June 1, 2014 – June 1, 2015).
Official figures show that Zimbabwe’s foreign direct investment leapt to US$545 million in 2014 – less than 5% of the country’s Gross Domestic Product — from US$400 million in the previous year, driven by interest in mining, infrastructure and services but still lags behind regional rivals.
The World Bank Group’s Doing Business report tracks the regulatory and bureaucratic systems of nations by conducting detailed annual surveys. For policymakers faced with the challenge of creating jobs and promoting development, it is well worth studying how nations fare in terms of the various Doing Business indicators.
The report further shows that by region, Sub-Saharan Africa accounted for about 30% of the improved global regulatory reforms and half of the world’s top 10 improvers.
“Zimbabwe ranks 155th out of 189 economies on the Ease of Doing Business ranking globally and scores 48.17 points on the overall distance to frontier (DTF) score. This represents an increase of 16 places on the ranking compared to last year’s published data,” the report reads.
Multiple reforms were also implemented in Côte d’Ivoire, Madagascar, Niger, Togo and Rwanda. The region’s highest ranked economy is Mauritius, which has a global ranking of 32.
“A modern economy cannot function without regulation and, at the same time, it can be brought to a standstill through poor and cumbersome regulation. The challenge of development is to tread this narrow path by identifying regulations that are good and necessary, and shunning ones that thwart creativity and hamper the functioning of small and medium enterprises,” said Kaushik Basu, World Bank Chief Economist and Senior Vice President..
Developing economies, the World Bank said quickened the pace of their business reforms during the last 12 months to make it easier for local businesses to start and operate.
“The majority of the new reforms during the past year were designed to improve the efficiency of regulations, by reducing their cost and complexity, with the largest number of improvements made in the area of Starting a Business, which measures how long it takes to obtain a permit for starting a business and its associated processing costs,” the World Bank said.
“A total of 45 economies, 33 of which were developing economies, undertook reforms to make it easier for entrepreneurs to start a business. India, for example, made significant improvements by eliminating the minimum capital requirement and a business operations certificate, saving entrepreneurs an unnecessary procedure and five days’ wait time. Kenya also made business incorporation easier by simplifying pre-registration procedures, reducing the time to incorporate by four days.”
Efforts to strengthen legal institutions and frameworks were less common, with 66 reforms implemented in 53 economies during the past year, the World Bank said. The largest number of such reforms were carried out in the area of getting credit, with 32 improvements, of which nearly half were undertaken in Sub-Saharan Africa.-Bernard Mpofu