By Donald Nyarota.
MUTARE, Zimbabwe. (News Of The South) – Structural reforms in policy complicating ease of doing business in Zimbabwe must be introduced to stimulate economic growth, an official has said.
Reserve Bank Foreign exchange director Morris Mpofu said without such reforms economic growth will remain stunted.
He said Zimbabwe has a low ranking on a World Bank international country survey in the ease of doing business, a negative which needs to be addressed.
Economy Rankings Economies are ranked on their ease of doing business, from 1–189, by the World Bank Group.
A high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a local firm. The current rankings for all economies are bench-marked to June 2014.
“On the ease of doing business according to a World Bank survey, Zimbabwe ranks 171 out of 189 nations in the world with the scale of competency ranking in ascending order, while in Africa we are ranked 39.
“This means we need to create a conducive environment for doing business because of a lot of requirements put in place,” he added.
“There is also need for institutional reforms to speed up exports.” It takes up to 53 days for one start operating a legally registered business in Zimbabwe, due to an abundance of unnecessary red tape,
said the RBZ official.
He said government should move with speed in ensuring policy shifts to attract Foreign Direct Investment from development partners.
He also called on government to draft deliberate policies which stimulate exports as a way of addressing liquidity challenges in the economy.
“We should shift towards policies which attract foreign direct investment and increase our exports. These exports will print the US dollar, because as things stand the little that is there goes out through non essential imports.
“This is worse in our situation because our foreign currency reserves are drained out by finished products,” he said.
Reserve Bank is working on liberalizing stringent exchange controls to ensure circulation of money in the economy revealed Mpofu. He also said the central bank was working on modalities of encouraging exports.
“The RBZ has considerably liberalized exchange controls to make sure money circulates and benefits businesses through downstream benefits,” he said.
Minister of State for Provincial Affairs in the President’s Office, Cde Mandi Chimene said bankers must reduce loan requirements for ordinary citizens. She said paperwork was scaring away potential small to medium scale entrepreneurs which fail to access funds due to these stringent requirements.
High interest rates on loan repayments were also singled out by Minister of State as being prohibitive and too high for ordinary people.
“Kuma Banks there is too much paperwork. The people know what they want and given a chance they will do exactly what they want.
“Don’t scare people off with too much paperwork. (The) Bank rinoda (wants) house number pandinogara mapicture angu (where I stay and my pictures). All these scare away people and they flock to my office asking for help.
“Let’s reduce paper work. I’m not saying give people money for free but your interest chimbadzo chaicho (are comparable to loan sharks’ rates). Please help people start their own businesses,” she said.
NetOne director Reward Kangai said small to medium enterprises should leverage on low cost mobile technologies to improve on their production capacities.
He said through mobile platforms, all industries including small scale businesses, farmers and other players can improve their competitive advantage.
“Mobile is a catalyst for all industries, agriculture, transport, service delivery, education, they all benefit from mobile communication technology, because it has a transformative impact across all industries.
“In itself it generates employment, it improves the GDP so these are some of the benefits of the mobile,” he said.
Kangai said government should take advantage of mobile technology to cut laborious company registration procedures.
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