The Sunday Mail
THE Zimbabwe Investment Authority, the country’s investment promotion body set up by Government in 2007, believes that tweaking laws by adopting an “Omnibus Act” that simplifies and shortens investment procedures will help foster an investor-friendly environment.
Last year, FDI remained flat for the fourth consecutive year at US$410 million, while inflows in the region have been increasing.
There are concerns that the continued difficulties in the ease of doing business by both local and foreign investors, as highlighted in the recent 2014 Ease of Doing Business Index, will continue to affect investor sentiment.
An Omnibus Act streamlining all investment procedures is envisaged to make the One-Stop-Shop (OSS) Investment Centre more efficient.
Investors face considerable challenges in setting up and operationalising businesses, more than three years after establishment of the OSS Investment Centre in December 2010. Local and international entrepreneurs contend with challenges ranging from high taxes, red tape and punitive costs of importing and exporting goods compared to their peers in Sadc.
The Doing Business 2014 Report by the World Bank and International Finance Corporation measures indicators such as starting a business, construction permits, getting electricity, trading across borders, enforcing contracts, getting credit and resolving insolvency.
ZIA spokesperson Mr Nickson Kanyemba said in a recent interview it was critical to come up with legislation that makes the OSS more efficient. In essence, the OSS was born out of the need to streamline approval processes which were complex and lengthy, characterised by bottlenecks at different institutional levels and administrative procedures that posed impediments to investment.
“The international best practice regarding registering a business and managing any other issues affecting time and cost of starting a business is adoption of an Omnibus Act. This Act can harmonise all other Acts pertinent to starting a business.
“For example, in Mauritius they have the Business Facilitation (Miscellaneous Provisions) Act 2006 No. 21 of 2006, which harmonised 11 Acts. In brief, the aim (of this law) is ‘to provide for a new legal framework which would allow businesses to start operations on the basis of self-adherence to comprehensive and clear guidelines and the authorities to check for compliance by exercising ex-post control, facilitate doing of business and acquisition of properties by foreigners and enable small enterprises to start their business activities within three working days. We hope that if we can have such an Act here in Zimbabwe, our performance will improve a lot,” said Mr Kanyemba.
Government used research from tours undertaken to countries such as Mauritius, Rwanda and Uganda to come up with a framework governing the OSS Investment Centre.
The model in use here brings under one roof all ministries and agencies that deal with investors; such as the Zimbabwe Revenue Authority, Immigration Control Department, Environmental Management Agency, Registrar of Companies, Ministry of Youth Development, Indigenisation and Empowerment, Ministry of Mines and Mining Development, Ministry of Local Government and ZIA.
Officers seconded from the various agencies were supposed to be vested with powers and the mandate to make decisions such as granting permits and licences.
“This, however, has not been the case mainly due to the following reasons: lack of enabling legislation to support OSS, different Acts governing the various agencies, different institutional requirements in terms of paper work, fees and approval structures, among other issues.
“(It was also because of a) multiplicity of approving and licensing authorities, manual processing and filing of records at most Government departments leading to bureaucratic and slow processing.
“Consequently, the approval process is still very much fragmented and investors still need to visit the various premises of the licensing authorities. It is our view that there is need for a supportive legislation that operationalises the OSS in the form of an Omnibus Act,” explained Mr Kanyemba.
ZIA contends that it is possible for Zimbabwe to achieve FDI inflows of US$1 billion by year-end and US$2 billion by 2018.
He said given the business framework reforms being looked at by Government, and the existence of an array of investment opportunities across all economic sectors, the figures were realistic.
