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Ease of Doing Business in Zimbabwe: Are We Leveraging the Internet?

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Harare Business district

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When processes are done online; time is saved, queues reduced, distance barriers and human elements like corruption eradicated. The internet is ubiquitous and an ideal technological platform to make life easier for all of us.

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This also applies when you want to start your own business. A lot of effort has been made by stakeholders to improve the ease of doing business in Zimbabwe through online operational-centric reforms. The question is how far have these changes yielded tangible results for the end users?

According to the World Bank Doing Business Report our current ranking as at June 2017 is 159 out 190 countries. Ease of Doing Business in Zimbabwe averaged 162.60 from 2008 until 2017, reaching an all-time worst of 171 in 2011 and a record best of 153 in 2014. A higher ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a local firm. In simple terms this means that if this was a soccer league Zimbabwe would be a perennial candidate for relegation.

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Do these dismal ratings really reflect on average citizens when they want to start and formalise companies? Also which areas can we still improve on to maximise online efficacy?

This analysis will be on four generic business formalisation processes (chronologically) that every firm goes through regardless of line of business or stature.

EntityServiceProcedure% Procedure Done OnlineAnalysis & Recommendations
Registrar of CompaniesRegistering a company. Either PVT LTD or PBCName search submission and payment - Online (instant)

Collection of Approved/Rejected Name Search - Office (after 1 day)

Last stage document submission for Certificate of Incorporation - Office (less than 1 day)

Collection of processed company documents - Office (after 4-5 days)
1 out of 4 = 25%The whole process takes up to 8 working days or more for a novice.

Still difficult to complete on your own thus most people hire a consultant for an extra fee

It must not be compulsory to collect hard copy of approved name, it should be printed online and suffice

A state appointed Accounting Officer must be on offer for people who do not have one

Last stage documents must be completed online as templates and the Certificate of Incorporation should be completed in lessor time

A client must only visit the office once to sign and collect certificate
ZIMRABank Notification or Tax Clearance for bank account oppeningRequired information - Office (1 day)

Completion and submission of REV 1 Form with supporting documentation1 Form with requisite supporting documents like company documents, proof of residence and certified copies of IDs for directors etc – Office ( less than 1 day)

Collection of bank notification – Office (instantly after submission)
0 out of 3 = 0%The process takes less than 30 minutes

There are usually no queues.
Duplication of effort since some documents required will also be re-submitted when applying for a business partner number.

Despite being a simple process it must also be done online for more convenience.

Integrate online as a pre-Business Partner Number application process
BanksOpening a company bank account
Requirements enquiries and product comparisons of banks – office & telephone (1 day)

Submission of application and supporting documents – office (1 day)

Confirmation of activated account – online (after an average of 5 days)
1 out of 3 = 33.3%The whole process takes an average of 7 working days.

Some of the banks’ websites needs more details on company account opening like requirements, charges etc. You have to go there or call.

Submission of application and initial deposit can be done online with tools like attachments, electronic signatures being used.


ZIMRABusiness Partner (BP) Number and Tax Clearance Certificate application
Application for BP number and confirmation – online (3-4 days)

Application for Tax Clearance Certificate and confirmation – online (1 day)
2 out of 2 = 100%The process takes an average of 5 working days.

Align process with bank notification requests to reduce duplication.


Ultimately;

These timeframes might differ from the entities’ officially claimed service lead times, because these are on-the-ground based averages from personal experiences and information from various people who have done these processes before. I know some will argue that consultants can get you a company (not a shelf company) in 2-3 days but this summary is for the ordinary person not experts who have “trade secrets” at their disposal not privy to most, if not anyone else.

These processes cannot be done concurrently, it’s a stage after stage process. Hence for someone to complete this generic formalisation process (before fulfilling other council and sector based statutory permits and licenses) it will take them an average of 21 working days.

Based on this exploration an average of only 39.6% of the procedures are done online which shows that as a nation we still have more to do to improve.

Writer: Mavin Mutandwa is a marketing professional who works for the Scientific and Industrial Research and Development Centre (SIRDC)


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One thought on “Ease of Doing Business in Zimbabwe: Are We Leveraging the Internet?

  1. While the argument is sound, we can’t be concentrating processes to be internet reliant when we have the following situations:
    1. Concentrated internet usage (focus on urban areas)
    2. Concentration risk on internet access to Liquid Telecom (ref: Internet blackout 05-Dec-2017)

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