‘Red tape stifling investment’

Posted on February 19, 2010 | Category: Politics; Business, Sport

http://www.theindependent.co.zw/

VISITING Zambia tourism minister Catherine Namugala has advised government
to streamline investment requirements to reduce bureaucratic inertia for
would-be investors. Addressing delegates at the AfricaInvestor Tourism
Investment Summit in the capital this week, Namugala said regional
governments stand to lose in tourism investment and the 2010 FIFA World Cup
in South Africa owing to unnecessary red tape.
AfricaInvestor is an investment communication firm advising governments,
international organisations and businesses on communication strategies for
capital markets and foreign direct investments in Africa.
“As policymakers it is important for us to have stable and democratic
societies so that we have an environment for tourism investment,” Namugala
said. “Our role is to reduce the hassles for investors to do business. I don’t
think they (investors) will be happy to go through a process of 100
licences. Not all the licences are necessary, we have some licences that are
a nuisance for investors…you can amalgamate them or eliminate them.”
Zambia, she added, has since reduced the process of bringing in new
investors.
Economic Planning minister Elton Mangoma told the same conference that
government would this June transform the Zimbabwe Investment Authority (ZIA)
into a “one-stop shop”, a move expected to ease investment.
ZIA chief executive officer, Richard Mbaiwa, admitted the existing
investment policy was deterring investors.
“There is a lot of interest in retail and distribution sectors in terms of
establishing malls and retail chains,” Mbaiwa said. “The major challenge
(according to investors) is starting a business. Investors sometimes feel
that there are a lot of procedures.”
He said streamlining the investment exercise could “negate the cumbersome
process of starting a business”.
Despite the formation of an inclusive government which relatively eased
political tension and the adoption of a multicurrency system to control the
erstwhile runaway inflation, a World Bank Doing Business report last year
said Zimbabwe was still one of the worst places to do business in the world.
According to the report for 2009/10 released by the International Finance
Corporation of the World Bank last September, the country has moved to
position 159 in the ease of doing business rankings ahead of only two
Southern African peers — Angola and the Democratic Republic of Congo in the
183-nation report.
Currently, a would-be foreign investor requires an Investment Licence issued
by ZIA upon approval of a project proposal submitted to the authority.
This process, according to the investment authority, could take up to three
weeks but the World Bank report contends that it could take 1 426 days to
fully complete the paper work and building exercise of a warehouse compared
to an average of 260 days in other parts of sub-Saharan Africa.
For a country that has been starved off major tourism investment over the
last 10 years, industry players said efforts to increase hotel accommodation
to 15 000 from the current 7 000 in the next five years on the back of a
projected double-digit economic growth could be far-fetched without any
foreign direct investment.
Zimbabwe, according to Africa Sun boss Shingi Munyeza, has not had any
“mainline hotel” since completion of the five-star Kingdom Hotel in Victoria
Falls in 1999. He said hotel accommodation has however increased through
refurbishing peri-urban apartments into budget hotels and lodges.
On funding tourism investments in Zimbabwe, Solomon Asamoah, deputy chief
executive of African Finance Corporation, said the financial institution was
ready to bankroll “right and structured’ projects.
“We believe that there is no shortage of cash for good projects,” he said.
“The challenge is to find the right projects and structures…On long term
(infrastructural) investment, you need some consistency in the environment
before you invest. I have the checkbook in my pocket and I’m waiting for
opportunities to invest in.”