Business Reporter
THE Government is taking steps to simplify the business licensing process and reduce associated costs, with the ultimate aim of enhancing the overall ease of doing business.
The diverse range of high-cost drivers and compliance burdens across sectors are significantly hindering overall business competitiveness while driving up production costs.
This was limiting economic growth and job creation, according to a new Government industrial policy unveiled recently.
To improve the ease of doing business, a Cabinet-approved committee, chaired by the Office of the President and Cabinet, was working on streamlining business licences by the end of the year.
The primary goal is to reduce the number of required licences and make them more affordable, according to the Zimbabwe Industrial Reconstruction and Growth Plan (ZIRGP), the country’s transitory manufacturing blueprint.
The plan runs between October 2024 and December 2025.
“Regarding the ease of doing business, as approved by Cabinet, the committee chaired by the Office of the President and Cabinet has started its work, with the target of streamlining business licences by the end of the year so that by the beginning of 2025 business applicants apply for limited licences,” says the plan.
“The cost of the licences is also being looked into to make sure that the costs are competitive and not punitive.”
The ZIRGP also noted that industry faces high regulatory and utility costs, negatively impacting manufacturing.
“To address this, the ministry, through the National Competitiveness Commission (NCC), proposes adopting a Regulatory Impact Assessment to review regulations that hinder competitiveness.
“High-cost drivers and compliance burdens vary across sectors, affecting overall competitiveness and production costs,” reads part of the ZIRGP.
Businesses have often complained about the numerous licences required, saying they delay and complicate the acquisition process, ultimately affecting business competitiveness.
According to the Retailers Association of Zimbabwe (RAZ), the excessive bureaucracy surrounding business licensing in Zimbabwe was a major challenge for retailers.
It says, to operate a single supermarket, one needs over 25 licences and permits, making it incredibly difficult for its members, some of whom operate over 50 branches.
“To operate a single supermarket in Zimbabwe, one needs more than 25 licences and permits — a tall order for some of our members who operate over 50 branches each,” said RAZ, a body that represents retail outlets such as OK Zimbabwe, Pick n Pay, Electrosales and Truworths.
The licences and permits are obtained from various Government agencies.
These include licences for liquor sales, restaurant operations, music usage, seed selling, pesticide handling, livestock products and hazardous materials storage.
Additionally, permits are necessary for building construction, environmental compliance, waste disposal, generator operation, food handling, fire safety, tax compliance, social security and pharmaceutical sales.
RAZ said the complex and burdensome licensing process significantly hampers the ease of doing business.
What also makes them uncompetitive is that, while formal retailers are supposed to comply with all the standing regulations, they face competition from informal traders, who often do not comply with licensing requirements.
Similarly, the overall regulatory environment in Zimbabwe’s mining sector is characterised by multiple, overlapping licensing processes from various agencies, creating a significant burden for businesses.
Licensing requirements in Zimbabwe remain costly and burdensome, as highlighted by the National Competitiveness Commission’s 2023 report.
For example, applying for an investment licence at the Zimbabwe Investment and Development Agency (ZIDA) costs US$500, and issuance of the licence upon approval costs an additional US$4 500.
The fee structure is significantly higher than that of countries such as South Africa (US$150), Zambia (US$560), Rwanda (US$500), Malawi (US$1 000) and Botswana (US$152).
Analysts say Zimbabwe’s high licensing fees, particularly when compared to other countries, make the country less attractive to potential investors.
“While Zimbabwe possesses significant mineral wealth, the Government must streamline regulations, reduce red tape and ensure a stable and predictable operating environment,” said a mining expert with a local consultancy firm.
Some analysts have also noted that the realisation of special economic zones (SEZs) was being hindered by excessive fees. For example, the designation fee of US$50 000 is particularly high and could deter potential investors.
This post was originally published on here
