The Sunday Mail
Darlington Musarurwa Business Editor’s Brief —
NO MATTER how much time, effort and resources Government invests in trying to create an environment in which domestic and international investors thrive, it almost always incredibly ends up in the same place — nowhere.
Now it’s not so hard to understand why.
There are two key developments over the past week that shine the spotlight on the sincerity by authorities to walk the talk when it comes to creating an enabling doing business environment.
On Monday, the Harare City Council acting town clerk Ms Josephine Ncube and director of works engineer Mr Phillip Pfukwa personally visited Total service station along Simon Mazorodze to give them an ultimatum to refurbish a drainage pipe within its vicinity or face closure.
To call it an ultimatum is to be graciously euphemistic and polite, it was essentially a threat.
Yet is can be reasonably surmised that the construction of the Mbare Mall is the one that triggered the floods that now affect Mbare residents.
Later on during the same day, Postal Telecommunications Regulatory Authority of Zimbabwe (Potraz) dropped a bombshell: Floor prices for voice and data services, especially for bundled service packages and promotions, became effective.
Quite revealingly, the National Competitiveness Report (NCR) 2016, which was published by the National Economic Consultative Forum (NECF) in September with the support of the Office of the President and Cabinet, had indicated that prices for local mobile telephony seemed expensive by regional standards.
“Mobile cellular usage basket was priced in Zimbabwe at US$20,6 per month. At this level, the mobile telephony looks expensive by regional standards, with the exception of South Africa where the same basket was priced at US$32,6 in 2015.
“By this measure, Mozambique, Botswana and Zambia have more affordable pricing for mobile, ranging from only US$13 per month in the former two, to US$14,5 in the latter. It is worth noting that by this measure, the Sub-Saharan average of US$14,6 is nearly 30 percent cheaper than in Zimbabwe.
“Fixed broadband usage basket was priced at US$30 per month, which is just slightly higher than the US$28,1 priced in South Africa, but substantially lower than the other regional benchmarks, including the Sub-Saharan average of US$46,6,” concluded the report.
It needs to be highlighted that the competitiveness report is designed to raise red flags, particularly on cost drivers that make the local economy uncompetitive.
It is also supposed to be a reference for policy makers who are working to improve the doing business environment. It therefore becomes surprising that instead of bringing down the cost of voice and data services, Potraz chose to hike them.
What is even more absurd is that Potraz chairman Mr Ozias Bvute told a public gathering on October 12, 2016 that the regulator would cut data tariffs in order to democratise the internet and make it accessible to many.
The Minister of Information Communication Technology, Postal and Courier Services Mr Supa Mandiwanzira was present at the said gathering.
To an investor who might have taken this soothing news to heart, it must have been nightmarish to hear of the tariff hike.
But this is the sort of “start-stop”, “duck, dive” and “left-right” policy making system that feeds the skepticism of doomsday critics and cynicism of pessimists.
It is precisely because of such instances of policy inconsistency that seemingly validates statistics such as the World Bank Global Competitiveness Index (GCI) report (2015-2016), which ranks Zimbabwe 140 out of 144 countries in terms of business impact of rules on foreign direct investment.
This makes it difficult for those who are trying to market Zimbabwe to foreign investors. However, it is not only about foreign investors, but local investors as well, the budding entrepreneur and start-up that is struggling to set up shop.
Mobile telecommunication services are now the lifeblood of most business activities since most ventures are now informal.
So, raising the cost naturally has implications on the ordinary citizen. It is quite disingenuous for Potraz and the Ministry of ICT, Postal and Courier Services to allege that the mobile telecommunication companies railroaded the proposed price increases, for one of its core mandate as a regulator is to protect the consumer. Potraz particularly stands to benefit from any price hike effected by operators since it gets 1,5 percent of gross turnover as a levy that is meant to fund the Universal Services Fund (USF).
To put this into context, Econet Wireless Zimbabwe (EWZ), the country’s largest mobile telecommunications company, realised US$641 million in revenues for the year ended February 29, 2016.
This amounts to roughly US$10 million that is supposed to accrue to Potraz from Econet alone.
While the money generated this way is ostensibly meant to bridge the digital divide by establishing telecommunication infrastructure in areas where it might not be reasonably profitable for for-profit operators, services in these areas — from Guruve to Chimanimani — remain appalling. In fact, there is a famous tree at Machongwe Business Centre in Chimanimani — Minister Mandiwanzira must be aware of this since it is his home area — where people queue to get to a spot where one can make a call.
It is the same in Guruve, where villagers have to scout for mole holes and trees from which they can get mobile network. But Potraz saw is fit to spend US$20 milion on swanky offices in Mount Pleasant.
At the end of the day, this is what makes ordinary citizens disaffected by Government, especially its capacity to deliver a meaningful, affordable service, particularly in remote areas.
Equally, there are many local investors that feel that they are getting the short end of the stick from the Harare City Council, among other local authorities.
There are numerous cases where people that intend to get various licences to set up shop are being made to “hop, step and jump” between numerous city council offices.
It’s a mess. It actually makes the various declarations of improving the doing business environment hollow and meaningless.
Quite frankly, we still have a long road ahead.
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