Kuda Bwititi

The National Competitiveness Commission (NCC) has advised Government to reduce water charges and labour-related costs to help re-set basic product prices to realistic levels.

A Cabinet-appointed Standing Committee of Ministers tasked to oversee the Commission’s work will study the proposal when it meets in the coming days.

Secretary for Industry and Commerce Mrs Abigail Shonhiwa told The Sunday Mail that NCC’s technical committee has identified fixed water charges, labour expenses as well as National Social Security Authority (Nssa) and Environmental Management Agency (Ema) tariffs among the economy’s major cost drivers.

“The need to increase competitiveness in Zimbabwe, especially at this moment, cannot be underestimated. However, this has to be tackled methodically in order to achieve some traction.

“The technical committee has proposed that the following pertinent issues be discussed by the Standing Committee of Ministers when they have their first meeting:

“Labour law reform, the Environmental Management Agency’s requirement of 1.5 percent on an investment and other (related) issues; the National Social Security Authority’s 1 percent requirement on an investment and other (related) issues as well as fixed water charges.”

In November 2014, Cabinet ordered the setting up of the NCC to improve business competitiveness and agitate for price reductions.

There were concerns that most goods and services were over-priced, especially when read against other regional economies.

A litre of fuel in Zimbabwe costs almost US$1,50, but costs US$1,25 and US$1,07 in South Africa and Botswana respectively.

A crate of eggs costs over US$3 locally, but costs far less in neighbouring countries.

Certain medical procedures cost twice as much in Zimbabwe compared to India, South Africa and Zambia.

Most farmers are saddled with outrageously high electricity bills due to uncompetitive tariffs which have in the past forced them to scale down production. Further, a number of retailers are acting in bad faith as they are yet to slash prices following the introduction of bond coins.

The Ministry of Industry and Commerce is remodelling the National Incomes and Pricing Commission into the NCC whose technical committee is now in place.

A Cabinet principles paper has also been drawn up and processes leading to the passing of the National Competitiveness Act will soon follow.

Mrs Shonhiwa said the technical committee’s work will run concurrently with the progressive constitution of the Commission.

“While these legal processes to set up the Commission are taking place, the ministry, in the meantime, is looking at such issues as accommodation of the Commission, secondment of staff from both the ministry and NIPC, who will initially work in the Commission before the recruitment of permanent staff is done.

“These seconded staff and some staff in the ministry and NIPC have formed a technical standing committee and that committee is already working on competitiveness issues as recommended by Cabinet.”

Zimbabwe Sadc Business Association chief executive Mr Kingstone Khanyile advocated the speedy constitution of the NCC.

“The average person who intends to start a business in Zimbabwe faces more challenges compared to our competitors in the region, especially South Africa, Botswana, Zambia and Mozambique.

“We need to address these issues urgently. While Cabinet has made the right recommendations, implementation should be done in earnest.”

Confederation of Zimbabwe Industries (CZI) immediate past president Mr Charles Msipa said: “Implementation should start as soon as possible and the Commission should be able to give regular reports of their investigations, for example, on a monthly basis.”

Zim to adopt Japanese Lean model

Sunday Mail Reporter

The Ministry of Industry and Commerce has engaged the Japanese government with a view to adopting the Lean business model, which helps reduce business costs.

The model has achieved success in many parts of the world.

Lean is a systemic method of eliminating unnecessary expenses that feed into the cost of doing business by ensuring production proficiency and labour management.

Japanese car manufacturer Toyota first popularised the philosophy, which was later embraced as a broader industrial policy in the Asian nation.

Secretary for Industry and Commerce Mrs Abigail Shonhiwa said: “Efforts are underway to get assistance to adopt Lean strategies in business operations as they have been successfully applied in countries such as Japan.

“This, again, will go a long way towards reducing the cost of doing business and improve competitiveness of Zimbabwean companies.”