Zim slips on World Bank ranking

ZIMBABWE, which has undertaken a raft of reforms ahead of re-engaging with the international community, has regressed on its reform agenda after slipping to position 166 out of 190, according to the World Bank’s Doing Business Report.

By Bernard Mpofu

Last year the country was ranked 155 after climbing 16 places.

The government, taking its begging bowl to Russia and Malaysia in search of a bailout to halt economic implosion, is making frantic last-minute efforts to mobilise US$1,2 billion out of the US$1,8 billion required to settle arrears to international financial institutions (IFIs) following a successful payment of arrears to the International Monetary Fund.

IFIs have, however, expressed concern over the slow pace of reforms required to make the economy competitive on the global market.

According to the latest World Bank report for 2017, the southern African nation, which has however made changes on its labour laws, was not one of the top reformers highlighted in the report. On the upside, plans to set up a credit reference bureau saw the country being ranked 82 on getting credit.

Critics believe the lack of political will is slowing down reforms in the economy, badly in need of capital to stimulate growth.

Zimbabwe, the report showed, is lowly ranked on the starting a business index (183 out of 190) reflecting why the country’s foreign direct inflows have been declining in recent years. It also fared poorly on getting electricity (165); enforcing contracts (165) and paying taxes. The country also has a poor record in protecting minority investors. It ranked position 102 on the Doing Business Report.

As governments continue to take up the reform agenda, doing business data shows continued successes on the ground. For example, it now takes an average of 27 days to start a business in Sub-Saharan Africa, compared with 37 days five years ago.

“Although the region still has work to do to make itself more business-friendly, we see steady improvements within various economies in the region,” Rita Ramalho, manager of the doing business project, said. “To see a record number of reforms take place in Africa is very encouraging for local entrepreneurs and the global business community alike.”

Mauritius once again ranks best in the region, with an overall doing business global ranking of 49. Mauritius performs best in the areas of protecting minority investors and dealing with construction permits, with a rank of 32 and 33 respectively, on those indicators. For example, it takes 156 days to complete the construction permitting processes for simple buildings, compared to 183 days in France and 222 days in Austria.

Ranks of some other economies in the region are Rwanda (56), Botswana (71) and South Africa (74). This year’s report also covers Somalia for the first time, bringing the total number of economies covered globally to 190. Somalia is ranked 190.

For the second consecutive year, Kenya, according to the report, places among the global top 10 improvers. Ranked 92, Kenya implemented reforms in five doing business areas.

For example, in the area of resolving insolvency, the economy introduced a re-organisation procedure and introduced regulations for insolvency practitioners.

“Zimbabwe significantly reduced the severance package for redundancy dismissals,” the report shows.

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