Zim far from it: WEF

HARARE - Zimbabwe is “far” from improving its ‘ease of doing business’, the World Economic Forum (WEF) has said, as it once again ranked the nation among countries with poor global competitiveness in its latest ratings.

It said actually, the prevailing economic environment has “made it harder” to do business in the investment-starved country.

While the economically-troubled southern African nation’s global competitiveness improved, marginally, jumping two notches up the ladder, it remained among the worst, with WEF’s Global Competitiveness 2017/18 Report ranking it 124th out of 137 countries.

The Geneva-based international organisation – best known for its annual Davos meetings, which pull influential global business and political leaders – said “those who trumpet Zimbabwe’s reported improvement in the ‘ease of doing business' index will be discomforted by these findings. Far from making it easier to do business, policy instability and official inefficiency has made it harder”.

“It is easier to access finance, not because conditions of doing business have improved or banks are any healthier, but because credit demand has fallen,” WEF said in the report.

This comes as the country risks sliding back to its 2008 economic recession, amid rebounding foreign currency crisis and cash shortages, among other escalating challenges.

“Zimbabwe is ranked 13 from the bottom – little change from when it was 12 places off the floor,” WEF said in the latest survey, adding that “certainly, in Zimbabwe, in the absence of exchange rate adjustment, it will be extraordinarily difficult, probably impossible, to restore competitiveness”.

“The country’s overall score of 3.32 (out of 7) is the lowest since 2010 – a contradiction on the lack of success of frequent claims that Zimbabwe is improving its Doing Business profile,” it added.

Harare, which has a bureaucratic administration, has been making frantic efforts to improve its ‘ease of doing’, one of myriad factors dampening its attractiveness as an investment destination.

However, authorities have reported making progress in enhancing the ‘ease of doing’ – efforts spearheaded by the Office of the President and Cabinet – by improving the process of starting a business, strengthening the protection of minority investors and relaxing the acquisition of construction permits and property registration.

WEF said while Zimbabwe’s economy recovered in the period of 2010-11 – during a power-sharing deal between 93-year-old President Robert Mugabe and long-time rival, opposition MDC leader Morgan Tsvangirai, its score on the global competitive index has “flat-lined”.

“Zimbabwe’s score hit a low of 2.77 in 2009, rebounding 20 percent over the next two years on the strength of dollarization, but since 2010, it has flat-lined averaging 3.4,” WEF said.

It said Switzerland is tops in ‘ease of doing business’, with the highest score of 5.86.

It is followed by the United States, while the worst is Yemen, ranked 137, with a 2.87 score.

WEF added: “Zimbabwe ranks fractionally below the Sub-Saharan average 35 led by Mauritius in 45th position (4.52).”

Zimbabwe’s neighbours, South Africa and Botswana – among Africa’s best performing economies, ranked 61 and 63 respectively.

The continent’s worst in sub-Saharan Africa was Cape Verde, sitting at 110.

“The two most striking changes...are the steep falls in the rankings of South Africa (down 14) and Lesotho (down 11),” WEF said, adding that “Sadc economies languish close to the bottom...with eight countries – including Zimbabwe – in the bottom 20”.

For Zimbabwe, WEF said, the most striking changes over the past five years were: the rise in policy instability, restrictive foreign currency regulations and inefficient government bureaucracy.

It said “simultaneously, concerns about infrastructure (surprisingly), access to finance and labour regulations have diminished”.

“Two striking concerns are the steep increase in concerns about foreign currency availability and escalating alarm about political instability,” it said, adding that “both are very realistic findings given the fact that the country is currently facing a major discontinuity, which is bound to have substantial and far-reaching implications for business”.

Corruption is also a factor blemishing Zimbabwe.

However, WEF said Zimbabwe is not entirely bad.

“The country has very favourable scores – ranked in the top 50 – for crime and terrorism, women in jobs, education and professional management and corporate reporting and auditing standards,” it said.

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