By Byron Mutingwende
The Ministry of Macro-Economic Planning and Investment Promotion is spearheading various initiatives to promote investment in the country, it has emerged.
In a speech on behalf of the minister, Dr. Judith Kateera, the Permanent Secretary for the ministry of macro-economic planning and investment promotion said there was a need to accelerate the implementation of the various investment reforms that government has embarked on. She cited the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZIMASSET) and the Ten Point Plan which both identify investment as a key pillar for achieving the country’s growth and development goals.
“The Government, in its quest for promoting investment growth, has taken into account the concerns that investors have expressed over the investment environment in the country and has come up with a number of initiatives and reforms aimed at improving this environment. These activities include the ease of doing business reforms, which exercise is spearheaded by the Office of the President and Cabinet (OPC), the promulgation of the Special Economic Zones (SEZs) Act in 2016, the launch of the One Stop Shop Investment Centre (OSS) in 2010 in order to streamline all investment approvals and the clarification of the Indigenisation Act, among other initiatives,” Kateera said.
The permanent secretary said the harmonisation process is key in streamlining investment laws, regulations, policies and procedures in order to enhance the ease of doing business in the country. This entails addressing challenges that are linked to investment entry, establishment and retention (of investors) in the country.
Meluleki Sibanda, a legal officer in the ministry of macro-economic planning and investment promotion said the legal and regulatory framework can play a long role in fostering long term growth and economic growth.
“We need to create the right incentives and at the same time remove barriers that constrain long-term investment. Unfortunately, regulation often forms one of those barriers. When regulations have the unintended effect of discouraging or even prohibiting long-term investment, they need to be identified and eliminated. The problem is not only with the regulations that exist but also with the regulations that do not exist. In circumstances where regulation could have a positive impact on long-term investment but is lacking, it needs to be created,” Sibanda said.
Over the past few years, an enormous number of new rules, regulations, statutes and by-laws have been created in reaction to the global financial crisis and economic state of the nation. Sibanda said failure to appropriately legislate investment could close off opportunities to make long-term investments that could be widely beneficial to the nation
There are quite a number of challenges faced by investors. These include unclear regulations and legislation; cumbersome administrative procedures; uncoordinated approach in the administration of requisite fees by government agencies; outdated legislation and insecure property rights for investors.
Chengetai Obey Musara said the government has made strides in advancing policy reforms meant to make the investment environment more conducive. These include the One Stop Shop Investment Centre, the Special Economic Zones (SEZs) and the Ease of Doing Business Reforms.
“However these are not adequate in achieving the envisaged economic transformation of the country. Therefore further reforms shall be implemented in the form of the National Investment Policy, Special Economic Zones Policy and Harmonization of Investment Laws.”
Musara revealed that a preliminary study by the World Bank highlighted areas that need attention in the country’s investment policy.
In the study, investors complained about frequent and unexpected policy and legal changes that negatively affect their investment. They also mentioned uneven and heavy-handed enforcement. The investors feel that policies can be applied or not according to the whim of politicians or government officials. This makes them reluctant to invest or expand.
“This is the main issue with the indigenization law; no one knows what are really the requirements, to whom do they apply and even who qualifies as indigenous company – and whether how these are all defined will be the same in the future. There is a feeling that the heavy hand of government has caused many distortions that raise the cost of doing business and increase policy uncertainty. Investors feel that they cannot be certain that their assets will be protected. Existing investors see great potential in Zimbabwe and will invest if the policies are right and are evenly enforced,” Musara said.