#1ZIA ZIMBABWE INVESTMENT AUTHORITY Your vestment, Our Passion Zimbabwe Ripe for Investment, Poised for Growth Presentation at ICAZ Investor Conference Polokwane, 2-5 October 2014#2ZIA ZIMBABWE INVESTMENT AUTHORITY Your vestment, Our Passion Ease of doing business in Zimbabwe: "One Stop Shop Concept" BY NIGEL CHANAKIRA ZIA BOARD CHAIRPERSON "Your Investment, Our Passion" 2#3PRESENTATION OUTLINE ZIA ZIMBABWE INVESTMENT AUTHORITY Your lovestment Our Passion About ZIA Overview of doing business in Zimbabwe Zimbabwe Doing Business ranking Analysis of Doing Business Indicators-Zimbabwe vs. Region Top Performers in Doing Business Reforms in the Region Implications Efforts to Improve Doing Business Environment Conclusion "Your Investment, Our Passion" 3#4ZIA MANDATE To deal with applications for investment Licenses ZIA ZIMBABWE INVESTMENT AUTHORITY Your lovestment, Our P To promote, facilitate and coordinate investment by domestic and foreign investors in Zimbabwe To promote joint ventures between domestic and foreign investors To promote decentralisation of investment Policy Advisory Role: Advise the Minister on investment policy & all matters relating to investment in Zimbabwe so as to enhance economic growth "Your Investment, Our Passion"#5Overview of Doing Business in Zimbabwe: feedback from investors ZIA ZIMBABWE INVESTMENT AUTHORITY Your ment, Our Passion Business environment in Zimbabwe is perceived to be among the worst in the world due to varied constraints Negative Image / Perception Corruption High cost and length of time to register Over-regulated economy: stringent and multiple compliance requirements Poor Electricity, Water and weak transport infrastructure "Your Investment, Our Passion" 5#6Overview of Doing Business Environment in ZIA Zimbabwe Cont. ZIMBABWE INVESTMENT AUTHORITY Your lovestment, Our Passion Brain drain: limited specialist skills Lack of access to Finance Production below capacity - industry is operating at below 40% capacity Lack of e-government platform Land issue - there is need to make land in Zimbabwe bankable "Your Investment, Our Passion" 9#7ZIMBABWE DOING BUSINESS RANKINGS (OUT OF 185 ) ZIA ZIMBABWE INVESTMENT AUTHORITY Topic Starting a Business DB 2013 Rank DB 2014 Rank 143 150 Movement -7 Dealing with 170 170 Construction Permits Getting Electricity 157 157 Registering Property 85 93 -1 Getting Credit 129 109 +20 Protecting Investors 128 128 Paying Taxes 134 142 -8 Trading Across Borders 167 167 Enforcing Contracts 111 118 -7 Resolving Insolvency 169 156 +13 Overall ranking 172 170 +2 Your lovestment Our P WORLD BANK#8Zimbabwe Ranking trend ZIA ZIMBABWE INVESTMENT AUTHORITY Your ment, Our Passion Overall Indicator Ease of Starting Doing a Year Construct Registerin ion Business Business Permits Trading Getting g Across Credit Property Borders Indicator 2010 159 145 178 84 113 167 2011 157 143 172 82 128 168 2012 171 144 166 85 126 172 2013 172 143 170 85 129 167 2014 170 150 170 93 109 167 80#9Doing Business Indicators 2014 Zimbabwe vs. Region ZIA ZIMBABWE INVESTMENT AUTHORITY Your lovestment, Our Passion COUNTRY Overall Rank (Out Starting a Dealing With of 183 Countries) Business Construction Registering Property Paying Taxes Permits Botswana 56 96 96 69 41 47 Mauritius 20 19 123 65 13 Mozambique 139 95 77 152 129 DRC 183 185 90 133 176 Rwanda 32 9 85 8 22 South Africa 41 64 26 99 24 Angola 179 178 65 132 155 Tanzania 145 119 177 146 141 Zambia 83 45 57 102 68 Zimbabwe 170 150 170 93 142#10COMPETITIVENESS INDEX 2013-2014 (OUT OF 148) ZIA ZIMBABWE INVESTMENT AUTHORITY GCI 2013-2014 GCI 2012-2013 COUNTRY RANK RANK CHANGE South Africa 53 52 -1 Zambia 93 102 +9 Rwanda 66 66 0 Tanzania 125 120 -5 Mauritius 45 45 0 Botswana 74 74 0 Zimbabwe 131 132 +1 Mozambique 137 134 -3 Angola 142 n/a n/a 10 Your lovestment Our Passion WORLD ECONOMIC FORUM#11FDI INFLOWS: ZIM VS SELECTED AFRICAN COUNTRIES COUNTRY Rwanda 2012 US$ Millions 2013 US$ Millions 160 111 Botswana 147 188 Democratic Republic of Congo, 3 312.1 2 098.2 Tanzania 1 800 1 872 Mauritius 589 259 Angola 6 898 4 285 United Republic of Tanzania 1 706.0 1 872.4 South Africa 4 559 8 188 Mozambique 5 629 5 935.1 Zambia Zimbabwe 1 066.0 1 810.9 399.5 400.0 11 ZIA ZIMBABWE VESTMENT AUTHORITY Your lovestment Our Passion UNCTAD#12REGIONAL BEST PRACTICE CASES 1. Rwanda • Reform process led by the President. ZIA ZIMBABWE INVESTMENT AUTHORITY Your lovestment, Our Passion • Set up a Doing Business Unit to oversee reform process (WB Funding) • Setting up of the physical OSS started without legislation. • Act later put in place to give legal effect to the OSS • Officers have powers to issue permits in the OSS • Online company registration 12#13REGIONAL BEST PRACTICE CASES ZIA ZIMBABWE INVESTMENT AUTHORITY Your lovestment, Our Passion 2. Mauritius: Started with an initiative called Setting the Stage for Robust Growth by the Minister of Finance in August of 2005. • Ministerial Committees on Red Tape and Bureaucracy were set up, including joint Public/Private Sector Committees to review the investment climate. • Critical to the whole process was the transformation of the legal framework (Omnibus legislation) • Silence is consent rule • Company licencing now takes 3 days from 46 days before reform 13#14REGIONAL BEST PRACTICE CASES ZIA ZIMBABWE INVESTMENT AUTHORITY Your lovestment, Our Passion 3. ZAMBIA • Government through the Private Sector Development Reform Program (PSDRP) undertook comprehensive PSD reforms: Substantially reduce the number of unnecessary licensing requirements • Make the licensing regiments simpler, transparent and easy to comply with. • Ensure licensing is focused on legitimate regulatory purposes, and • Focus government and stakeholder attention on business regulation and not revenue generation as primary purpose of business licensing. Unnecessary licenses were removed and a Central Electronic Registry created 14#15IMPLICATIONS OF A POOR DOING BUSINESS ENVIRONMENT ZIA ZIMBABWE INVESTMENT AUTHORITY Your lovestment, Our Passion Doing Business Environment in Zimbabwe is undermining Investor Confidence It has resulted in low levels of inward FDI and domestic investment In turn, low industry capacity utilisation has led to low productivity and job losses Which has resulted in increased dependence on imports "Your investment, Our Passion"#16INITIATIVES TO IMPROVE THE BUSINESS ZIA ZIMBABWE INVESTMENT AUTHORITY Your vestment, Our Passion CLIMATE Ministry of Finance and Economic Development working with the World Bank on the Doing Business Reform Agenda in Zimbabwe A workshop was held 1-2 October 2014 that covered the following: • World Bank technical team to advise on the technical issues of the doing business methodology so that stakeholders may appreciate what it entails • Presentations were made by key Zimbabwean stakeholders with progress updates work done so far e.g. Doing Business Committee under Ministry of Industry and Commerce. • Agreement on the roadmap and structure to be followed in implementing the agreed reforms#17THE ONE SHOP SHOP Intention was for 5 working day approvals for all processes Physical OSS has been in place since 2012 17 ZIA ZIMBABWE INVESTMENT AUTHORITY Your vestment, Our Passion#18Participating Agencies/Depts in One Stop Shop ZIA ZIMBABWE INVESTMENT AUTHORITY Your vestment, Our Passion Agencies in OSS: • ZIA • Registrar of Companies • Immigration Control Department ZIMRA • Ministry of Mines and Mining Development Ministry of Local Government • Ministry of Youth Development, Indigenisation and Economic Empowerment • Ministry of Local Government • EMA Your Investment, Our Passion#19Challenges facing the OSSZIA OSS fraught with its own challenges: • Attendance by Officers: Erratic and sometimes non- attendance by officers from some departments e.g. Immigration Control Legislation: Organisations in the OSS have ZIMBABWE INVESTMENT AUTHORITY Your vestment, Our Passion • Different legislation making it difficult for some departments to transact from within ZIA (need harmonised legislation- Mauritius) • Authority of seconded Officials: Current OSS set up requires officers to be empowered (case of Rwanda). • Conditions of Service for Seconded Officers: • Need for consideration to incentivise seconded (case of Uganda and Rwanda) officers Your Investment, Our Passion#20Challenges facing OSS Contd' ZIMBABWE INVESTMENT AUTHORITY Your Investment, Our Passion Low volume of traffic in the OSS: discourages seconded officials from coming to the OSS as they would be idle. • There is need for organisations to divert clients that can be assisted through the OSS to the OSS Centre Online Processing: Departments in the OSS not 'networked' i.e. Virtual vs physical OSS Funding of OSS: Adequate funding needed to fully operationalise the OSS (incentives, advertising the OSS Services) Separate payment systems for different departments Your Investment, Our Passion#21Viability of OSS If properly managed and fully operational OSS ZIA ZIMBABWE INVESTMENT AUTHORITY Your lovestment, Our Passion removes unnecessary bottlenecks in decision-making and reduces start up time. ➤ Need for legal framework (Rwanda and Uganda) ➤ Physical OSS coupled with on line processing reduces processing time (Rwanda) ➤ Virtual OSS (Mauritius). This is the route we will pursue Your Investment, Our Passion#22ZIA WAY FORWARD: IMMEDIATE ATTENTION AREAS Making One Stop Shop operational ZIMBABWE INVESTMENT AUTHORITY Your lovestment, Our Passion Registrar of companies / Company Incorporation computerization Reviewing laws related to business Setting up relevant regulations related to business reforms Improving dialogue platforms with the private sector (e.g. investors roundtable) Zim should strengthen the re-engagement with multi-lateral financiers to provide development funds Strengthening ZIA and its role in business climate improvement (funding) Reviewing overall licensing processes 22#23WAY FORWARD CONT. ZIA ZIMBABWE INVESTMENT AUTHORITY lovestment, Our Passion Ensure policy Consistency it is very critical for policy makers to speak with one voice Strengthen all institutions and automate processes to add speed Take away discretionary policies - simplify Train all regulatory agencies that deal with investors to be investor and business friendly. ZACC and anti-corruption processes should be seen bringing culprits to book In short - Improve Doing Business environment across the board 23#24CONCLUDING REMARKS ZIA ZIMBABWE INVESTMENT AUTHORITY Your lovestment, Our Passion Zimbabwe is clearly punching below its weight due to weak Doing Business Environment among other factors It is therefore imperative that Doing Business Environment Specific Actions receive immediate attention There is need to streamline all investment processes including harmonisation of all laws and regulations affecting investment. Computerization of all registration processes will score many marks for efficiency and turnaround time Improving dialogue platforms with the private sector Strengthening and reinforcing ZIA and its role in business climate improvement "Your Investment, Our Passion" 24#25Thank You For Your Attention ZIA ZIMBABWE INVESTMENT AUTHORITY Your vestment, Our Passion "Your Investment, Our Passion" 25