THE sweeping review of regulatory fees, licences and permits, which is meant to promote the ease of doing business by dismantling bureaucratic hurdles and reducing the financial burden for operators, has now been extended to the retail, horticulture and manufacturing sectors, with reforms in the three segments expected to be complete before presentation of the 2026 Budget in November.
The initiative is part of a broad Government push to cut the cost of doing business, stimulate private sector growth and boost competitiveness by addressing longstanding regulatory bottlenecks.
The authorities have already revised charges in sectors such as agriculture, tourism and transport.
In an interview with The Sunday Mail, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said the objective of the exercise is to create a more predictable and business-friendly environment that will attract investment and help companies redirect resources from compliance costs towards expansion.
“On the instructions of the President, we have been on this programme to reduce the cost of doing business,” said Prof Ncube.
“So far, we have tackled agricultural sub-sectors, tourism and transport.
“The next areas of focus are retail, horticulture and manufacturing.
“We hope to complete these before the Budget, after which we will move on to the energy and mining sectors.”
The reforms, he said, will also address overlaps in regulatory frameworks, particularly in agencies such as the Environmental Management Agency (EMA), whose licensing and inspection requirements often duplicate those of other authorities.
“The next sector that we are tackling is the retail sector,” said Prof Ncube.
“We are also looking at the horticulture sector, which is a sub-sector of agriculture, and then the cotton sector as well.
“So, I would say the whole crops sector is the next area of focus within the agricultural sector.
“And then the retail sector broadly, and then followed by the manufacturing sector.”
Prof Ncube said the process would take time, but the authorities were determined to push through the reform programme.
“You have seen the amount of detail that we are going through; we need to go really deep and try to analyse the challenges sector by sector.”
After presentation of the Budget, he added, the reform programme would then target the energy sector.
“The energy sector is also cross-cutting, and then after that, we look at the mining sector.”
Uncompetitive
A study commissioned by the Government through the National Competitiveness Commission (NCC), whose findings were published in a document titled “Zimbabwe Competitiveness Report 2024”, concluded that excessive regulatory costs, multiple licensing requirements and bureaucratic overlaps are among the most significant impediments to the ease of doing business.
The report concluded that the manufacturing sector’s competitiveness was being hampered by excessive labour costs, high energy prices and a huge tax burden.
“The tax burden also affects manufacturing sector competitiveness, as the highly taxing environment does not only reduce the reward for investment, as it also creates cost build-ups and limits the ability to adjust prices downwards to meet competition,” reads the report.
It, however, found that Zimbabwe’s corporate tax, at an average 25 percent, compared to similar taxes levied in 13 other Southern African Development Community (SADC) countries, was the third joint lowest in the region, showing that this tax head does not make Zimbabwean manufacturers uncompetitive.
“However, there are many other tax heads that manufacturers must comply with besides corporate tax, which could also compromise their competitiveness.
“The total tax contribution rate as a percentage of profit, which measures total amount of taxes and mandatory contributions payable by business, reflects better the total burden to business,” the report continues.
“A comparison of Zimbabwe and SADC countries shows that about 32 percent of profits are taken up in taxes for Zimbabwean businesses, at a time when seven other countries take less, with Lesotho taking only 14 percent.”
It adds: “The tax burden is also reflected in the total number of taxes paid by businesses, including electronic filing. Zimbabwe businesses pay a total of 51 taxes and in this respect, making Zimbabwe the third most cumbersome compared to other SADC countries.”
The report noted that for manufacturers, in 2022, average regulatory costs constituted about 17,8 percent of total overheads.
This cost is spread across a number of regulatory bodies, with a compliant manufacturer paying for at least nine licences to different regulatory bodies.
The study concluded that the Agricultural Marketing Authority, the Tobacco Industry and Marketing Board, the National Social Security Authority and EMA are among the regulatory bodies that impose the most significant compliance burden on manufacturing firms.
“The time taken by industry in processing the regulatory issues can also hinder the manufacturing sector from reaching its full potential,” the NCC report concluded.
“In one month, manufacturing companies are taking an average of 10 days in processing follow-ups on all regulatory requirements.
“About 33 percent of all raw materials need import permits to enter the country, while 73 percent of manufacturing sector export products need export permits.”
The report notes that manufactures have to employ an average three full-time employees dedicated to dealing with regulatory compliances as a result.
“This also becomes necessary because imports into Zimbabwe are subject to physical examination at any point of entry to prevent inflow of substandard goods, hence this requires checking up. Sunday Mail
The Sunday Mail
