eBusiness Weekly
Business Writer
Zimbabwe climbed up the ladder on “Ease of Doing Business” over the past year as it advanced 15 places to 140th position out of 190 countries in the World Bank’s 2020 rankings released on Thursday, riding on its flagship “Open for Business” mantra and the Rapid Results Initiative programme that is meant to attract investment.
President Mnangagwa has emphasised the ease of doing business reforms, which his administration has pursued since coming into power in November 2018.
To date, the Office of the President and Cabinet (OPC), has been on the fore front of implementing these reforms under the Rapid Results Initiative and the results are beginning to yield dividends with the World Bank’s latest recognition.
According to the Doing Business 2020 (DB2020) report, Zimbabwe put in place five new business reforms during the past year and had a score of 54,5 above the Sub-Saharan Africa’s average score of 51,8.
The Sub-Saharan Africa region remains one of the weak-performing regions on the ease of doing business, with its score well below the OECD high-income economy average of 78,4 and the global average of 63,0.
DB2020 is the 17th in a series of annual studies investigating the regulations that enhance business activity and those that constrain it.
The study presents quantitative indicators on business regulations and the protection of property rights that can be compared across 190 economies — from Afghanistan to Zimbabwe — and over time.
New Zealand remained the best place for Doing Business in the world, according to the report, while Somalia was the worst.
The study covers regulations affecting 12 areas of the life of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency, employing workers, and contracting with the Government.
For Zimbabwe, the new DB 2020 rankings come as a reflection of the work that President Mnangagwa’s Government has been doing to improve the ease of doing business in the country.
The rankings, which demonstrate tangible progress that has been made, should also come as a positive indicator to investors that Zimbabwe is committed to reforms. One of the main reasons for improvement in Zimbabwe’s ranking this year goes to the strides it has made to starting a business. Under starting a business, the study measures procedures, time, cost, and paid-in minimum capital to start a limited liability company for men and women.
The country made starting a business easier by improving online name search and by reducing the Harare Municipality business licensing fee, reads the World Bank report. However, more still needs to be done as the country ranks 167 on the “ease” of starting a business. Ones needs 27 days to finish the processes of starting a business.
Significant improvements were also registered in dealing with construction permits, the report said. In terms of how a country deals with construction permits, the study measures: procedures, time, and cost to complete all formalities to build a warehouse and the quality control and safety mechanisms in the construction permitting system. Zimbabwe ranked 140 on the ease of dealing with construction permits.
Alongside Zambia and Lesotho, Zimbabwe has the lowest number of formalities that are needed to build a warehouse among economies in Sub-Saharan Africa, just 10. One will, however, have to be patient as it takes 178 days to go through those processes more than the regional average of 145,4 days. Another improved area highlighted by the report is in how the country resolves insolvency issues. Here the study measures: time, cost, outcome, and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency. For Zimbabwe, which ranked 142, improvement was made by introducing a new reorganisation procedure, allowing creditors to vote on the reorganisation plan, and granting debtors the possibility of obtaining post commencement finance. Zimbabwe also made property registration easier by reducing the time to transfer property and increased transparency by publishing official statistics on land disputes for the previous calendar year. The country is ranked highly at 109 in terms of registering property. According to the DB 2020 report, it takes just five procedures and 29 days to register property, while the regional average is six procedures and 51.6 days.
Globally, property registration processes remain most inefficient in the South Asia and Sub-Saharan Africa regions. Zimbabwe at 67 ranks highly in terms of access to credit. According to the World Bank report the country strengthened access to credit by giving secured creditors absolute priority during insolvency proceedings. While there has been substantial progress, Zimbabwe still lags in areas such as getting electricity where its ranked 167, enforcing contracts where its ranked 169, trading across borders 159.
For policy makers, knowing where their economy stands in the aggregate ranking on the ease of doing business is useful. It is also helpful to know how it ranks compared with other economies in the region and compared with the regional average.
Other African countries’ rankings
- Mauritius (Rank 13)
- Rwanda (Rank 38)
- Kenya (Rank 56)
- South Africa (Rank 84)
- Zambia (Rank 85)
- Botswana (Rank 87)
- Togo (Rank 97)
- Seychelles (Rank 100)
- Namibia (Rank 104)
- Malawi (Rank 109)
- Lesotho (Rank 122)
- Nigeria (Rank 131)
- Mozambique (Rank 138)
- Zimbabwe (Rank 140)
- Tanzania (Rank 141)
