IN my last instalment I looked at the imperative of revisiting and reimagining the policy, governance and leadership architecture of the country to foster economic stability and growth.
In this opinion piece I will explore how we can grow our economy by rethinking our economic and business models.
The starting point is to look at where we are and how we can get to where we want to get to.
In discussing the future we need to be factual, scientific and empirical, staying clear from the toxic partisan discourses, which are blinded by emotion and subjectivity.
A key determinant of economic growth through investment and development is the concept and practise of ease of doing business.
Ease of doing business The World Bank has developed measurable indicators to rank countries in their capacity to facilitate ease of doing business.
In layman’s terms, ease of doing business refers to a regulatory framework that is business friendly in which procedures to start, operate and sustain business are simple.
The Zimbabwe government in its flagship economic blueprint, the National Development Strategy 1 (NDS1) outlines policy measures to enhance the principle and practice of ease of doing business.
As usual the gap between rhetoric and reality, policy pronouncement and policy formulation remains huge as a lot still needs to be done to ensure that Zimbabwe is a business friendly country, in which property rights are respected.
Ease of doing business is not an end itself as it will make the country an attractive investment destination and place local business on a trajectory of sustainable growth.
Sustainable economic growth inevitably leads to increased economic activity, greater employment, reduction of poverty and enhanced standard of living for the country’s citizens.
To this end there needs to be a concerted effort especially by the government to ensure that the country has practices, policies and institutional culture which ensures a business friendly environment.
Importantly, the World Bank ease of doing business framework consists of indicators, which measure a number of variables, just like the World Economic Forum’s Global Competitiveness Index.
The following are considered when exploring ease of doing business in a country:
How long it takes to register and start a business.
Speed of processing permits e.g. construction permits, mining permits, shop permits etc.
Access to credit
Other important factors to be considered are things, such as how long it takes to open a bank account, access to energy (electricity, etc.)
In looking at these indicators this tool measures the following:
Number of procedures involved, for example in any of the above. Are the procedures easy to follow? Are there too many bottlenecks? Can the procedures be done online? What is the efficacy of engaging the systems online?
How long do these procedures and processes take?
What is the cost of any process relating to starting a business? Investing, for example when one wants to open a restaurant
Importance of timeliness, cost and quality of service
In 2020 Zimbabwe ranked 140 out of 190 countries in what was said to be a marginal improvement from past performances.
This is still a far cry from the desired status of the country as a business friendly polity.
It still takes up to five days to open a bank account in Zimbabwe whereas in Botswana, you can walk in and within an hour have a new bank account.
There is a need to improve online services for businesses, with a case in point being Zimra tax clearances which at times take a very long time to process online.
Whilst this may be due to increased traffic, there is still a need to ameliorate online services and products to ensure that businesses operate smoothly and efficiently.
Understandably, procedures exist for the purposes of quality control, for example to ensure that health, environmental and safety measures are adhered to.
There is a need to balance the importance of quality control with more efficient and timely procedures. Other variables, such as cost and speed of processing business ventures need to be improved.
Corruption is fuelled by abundant bottlenecks and procedures, thus increasing the cost of doing business. I propose the following measures to improve the countries ratings in ease of doing business:
Improving online systems and processes.
Strengthening anti-corruption measures through the Zimbabwe Anti-Corruption Commission (Zacc)
Striking a balance between quality control and timeliness
Reducing bureaucratic bottlenecks
Ease of doing business must be dovetailed to the macro related fundamentals of an enabling environment.
This speaks more to a stable, consistent policy environment, which respects and upholds fundamental human rights, including rights to property.
An enabling environment, also speaks to the imperative of having business enablers, such as access to the internet, availability of electricity, water and adequate infrastructure.
An efficient local government infrastructure delivered through a well thought-out devolved system of governance, is critical to this end.
This will ensure localised financial decision-making (fiscal devolution), which will enable local businesses to benefit from easier access to decision-making structures and processes.
This needs to be done through an omnibus act of parliament, which gives the provincial and municipal layers of government, considerably more power in sculpting and coining policies on natural resources, tenders and local economic development.
We must be collectively wary though, thinking that devolution in itself will solve all the country’s problems as its success is dependent on a number of factors, including assumptions of quality and capable local leadership being in place.
The country’s obsession with toxic electoral processes is not helping as Zimbabwe is in perpetual election mode, though the script remains the same since 1980.
Ideas and policies, as well as quality political, corporate and civic leaders are routinely sacrificed at the altar of political expediency at a great cost to the economy.
SMEs as driver of economy
Zimbabwe needs to invest in internally driven economic growth, through small to medium enterprises whilst at the same time, position itself for foreign direct investment (FDI) or more ideally, partnerships between local and international business entities, which allow for transfer of capital, skills and technology.
The Kenyan model of economic growth through community savings and investment clubs is worth exploring, even though the Zimbabwean context is vastly different, given runaway inflation and currency instability.
The Zimbabwe business and economic model has to be re-visited, re-thought and re-imagined with SMEs being placed at the centre of envisaged sustainable gross domestic product growth and subsequently per capita income, coming with its improved standard of living through employment creation.
In agriculture, Kenya continues to be a leading light in the production of tea, for example not through traditional colonial and post-colonial gigantic estates, but rather through organised smallholder farming entities, with access to credit and markets.
SMEs can drive the country’s economic growth if enablers are put in place, including a vibrant policy framework with embezzled access to affordable credit, technology and skills.
SMEs are generally more resilient, dynamic and flexible in tough economies, such as ours, and investment of workable policies, capital, research and innovation capacity through linkages with institutions such as the National University of Science and Technology and Bindura University are key.
Government needs to allocate more budgetary resources to innovation, research and technology with a leaning towards harnessing local economic potential through advances in industry, clean energy and appropriate technology.
- Nkomo is a writer and published author of the book No Holds Barred .—email@example.com