REFORMS on accessing credit and protecting minority investor interests helped cash-strapped Zimbabwe climb 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.
Zambia increased to US$2,4 billion from US$1,8 billion while inflows to South Africa fell to US$5,7 billion from US$8,3 billion. Angola recorded US$3,8 billion in FDIs from US$7,1 billion, the report showed, while Botswana was flat on US$390 million.
The World Bank Group’s Doing Business report tracks the regulatory and bureaucratic systems of nations by conducting detailed annual surveys.
The World Bank however said Zimbabwe fared lowly on other indicators such as dealing with construction permits, registering property, getting electricity, the enforcement of contracts and trading across borders.
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.
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..