Businesses in Zimbabwe have been complaining about the licensing regime to set up and operate businesses and this has struck a chord with Government, the latest being the promise by Minister of Finance, Economic Development and Investment Promotion Mthuli Ncube to see what can be done to streamline the tax and regulatory provisions.
But those who think that streamlining means major tax cuts and the degregulation of a lot of business need to think again and start coming up with ideas over how streamlining can be made efficient and be implemented. Most importantly, there needs to be input from the business associations on what has to be regulated and how this regulation should be implemented.
Businesses and their representative associations tend to be rather good at complaining, but are very light when it comes to suggesting alternatives.
We agree that the business regulation regime is exceptionally fragmented with its multiplicity of agencies and authorities, and even those divided between agencies under a local authority and agencies belonging to central government. That helps to create that list of 30 permits the Confederation of Zimbabwe Retailers says is needed for a supermarket, although some of these permits come from the same agency.
But when you look at that supermarket list, it is easy to see how it arose, and that examination also shows how it can be drastically reduced without affecting customer and worker safety.
A supermarket is regarded as a combination business, and is one of the few businesses that have bucked the trend to do away with department stores combining businesses over a range of specialist shops. In Zimbabwe this supermarket model only really arose from the 1960s and only became big businesses in large premises over the last few decades.
The heart of a supermarket is the old grocery store, what most tuckshops would be today if they were properly licenced. This is just a shop licence. To this has been added in most cases a bakery, a butchery, food preparation in the delicatessen, a take away, a bottle store, and often a lunch counter needing a restaurant licence and so registration with the tourism authorities. Fifty years ago all this would have been a row of shops.
At the same time the large premises need a different order of regulation from a small shop that can accommodate only two or three workers and about five customers. A major supermarket is a huge shopping floor and so the public assembly rules on fire escapes, fire extinguishers, crowd control, air quality and fairly large bathrooms immediately apply.
But when we look at what is regulated in this plethora of licences we see that there is not much, if anything, that can be eliminated from the list. Almost all licences arose from the need to make sure that no one was harmed by bad food or bad hygiene or by unsafe premises. Add to that the need to make sure that the business did not poison its immediate environment, pose risks to adjoining properties, and damage its neighbours. Then there are those laws that protect consumers from fraud, wrongly labelled goods and short weights.
But when we look at the supermarket list presented by the CZR, we see a fairly natural grouping of all the licences into around three sets.
There are the premises licences, basically making sure that the shopping floor is safe and that if there is a fire or an emergency effective action can be taken and the premises evacuated without any problems.
The second batch, and it is a large batch, are largely concerned with health, safety and environment. These revolve around uncontaminated dry, processed and prepared food and food handlers keeping their hands washed and equipment clean.
The final batch is the liquor licence, and that probably has to be kept separate as there are different rules for selling liquor, including the hours of business, from all other goods. In any case the authorities need to tighten up on the trend we have been seeing of bottle stores, and to a degree this can include supermarkets in some areas, feeding what amounts to an illegal bar on the pavement or in the street outside.
But given all this it should be possible to consolidate the licences for a supermarket into three or four: premises, food and groceries (perhaps subdivided into non-perishable goods and perishable foods), and alcohol. More importantly we can have a single authority and single inspector to issue and check each licence.
We are no moving away from abolition of licences, and the need to have regulations, to the process of consolidating regulations so that a whole gamut of necessary checks can be done by one person for one fee and then the issue of one licence.
This might require a licensing authority, often the local government, the city council or rural district council, to have a set of licences for small shops, medium shops and large shops, with different fire regulations and bathroom and ventilation requirements for example. But there would be a clear list of requirements that both owner and licence inspector could tick off in a few minutes.
The grocery licence would basically ensure that standard hygiene was maintained regardless of food type. This might require a double licence for fresh food and non-perishable products, but that would be because the split was convenient to both shopkeeper and licence inspector. This would require a careful redefinition of restaurant, so that lunch counters were excluded.
We cannot see why the same swabs and other tests cannot be performed on bakery products, fresh meat, the products sold from a delicatessen and the takeaways taken away or eaten at the lunch counter. We would agree with those responsible for public health that the risk of someone willing to take chances to earn an extra dollar are sufficiently high that there should be licensing and inspections, but one licence and one combined inspection.
Liquor, and to a degree tobacco, do have separate rules such as age limits, more closely controlled access, non-consumption on the premises, and even shop hours. Supermarkets only could obtain liquor licences from the 1970s, heralding the decline of the monopoly held by bottle stores and suburban hotels. Even today a supermarket selling liquor is in a double business.
The consolidation of all these health and safety regulations into a small number of licences, and a small number of inspectors, would answer the major complaints of retailers. Many shops would need just one licence, and even food shops only two. Supermarkets above a certain size could need three. This would be a huge gain on what is today’s position.
Another area where licensing needs to be consolidated and simplified is in setting up a business or making an investment.
Some progress was made here when ZIDA was used as the consolidating agency, but there are still far too many permits needed from agencies outside the ZIDA offices. While major mines or huge industrial parks might need a separate environmental impact licence, most businesses within a declared industrial area or occupying land below a fixed size should be able to rely on general environmental licensing.
That largely leaves the normal premises license, where factory safety features and hygiene need to be ticked off, and waste disposal sorted out if there are toxic substances to get rid of. A food processing factory would still only need one operating licence, but a different one from a factory making car parts since a different sort of inspector would be calling.
But the ZIDA officer approving the investment could also be trained in the necessary checking procedures and be able to tick the boxes required by the regualtions.
We have heard that the licensing requirements can sometimes get large, a solar power station needing 10 permits if that was not an exaggerated complaint. But something like that surely just needs a deal with ZESA to buy the power and the normal factory level health and safety report. Environmental issues would be low-level since there would not be much earth moving and no toxic wastes.
All this means many regulatory regimes and licensing systems need to list what is required, and then see how everything can be consolidated down .
