Zimbabwe Slashes Red Tape to Unleash Economic Grow...

Zimbabwe Slashes Red Tape to Unleash Economic Growth

Nyashadzashe Ndoro - Chief Reporter

The government of Zimbabwe has launched a sweeping reform initiative aimed at slashing bureaucratic costs and red tape across key sectors.

The measures are the first phase of a broader initiative to improve the country's ease of doing business, reduce costs, and attract much-needed investment.

The reforms, announced by the Ministry of Finance, Economic Development and Investment Promotion, are aimed at removing the complex and costly bureaucratic hurdles that have long burdened businesses and individuals.

By streamlining regulations and cutting or abolishing numerous fees and levies, the government intends to stimulate growth and enhance competitiveness.

Agricultural Sector Overhaul

The agricultural sector, which provides livelihoods for 65% of the rural population, has been significantly unburdened. Previously, farmers and businesses faced a convoluted web of regulations; for instance, dairy farmers needed up to 25 permits from 12 different agencies.

Abolition of Redundant Fees

The government has scrapped the livestock development levy and cattle levy. Water abstraction fees from the Zimbabwe National Water Authority (ZINWA) and specific levies from the Environmental Management Agency (EMA) have also been abolished.

Lowered Permit Costs

The flat fee for farm registration with the Agriculture Marketing Authority (AMA) has been slashed to US$1. Dairy processor registration is now a one-time $50 fee, down from US$350 annually. Livestock movement clearance has been reduced to US$5 per herd, a significant drop from the previous US$10 per beast.

Reduced Import/Export Burdens

Fees for importing livestock genetics have been cut from US$100 to just US$20, while export registration for meat and dairy products has been substantially reduced.

These measures are expected to lower the cost of doing business, particularly for small and medium-sized enterprises (SMEs), and stimulate job creation in rural areas.

Transport Sector Reforms

The transport sector has also seen a dramatic reduction in regulatory costs. The government, through a Cabinet decision, has reviewed licenses, permits, levies, and fees to streamline processes and eliminate unnecessary burdens.

Drastic Fee Reductions: The cost of vehicle number plates has been reduced from US$500 to US$50, as local production now makes the new fee profitable. Parking fees, including clamping and towing charges, have been slashed by 50% across all local authorities.

Elimination of Excessive Charges

The US$23,000 duty on transit fuel payable to the Zimbabwe Revenue Authority has been immediately scrapped. The electronic cargo system fee of US$30 has also been eliminated, bringing Zimbabwe in line with regional standards.

Other Benefits

Parking fees outside the Forbes Border Post in Mutare have been removed, and the recently announced presumptive tax on the transport sector is also under review.

Finance Minister Professor Mthuli Ncube noted that the impact of these changes will be "instant," stating that by reducing burdensome fees and levies, the government aims to stimulate growth and enhance the profitability of businesses across the economy.

The reforms are part of a multi-stakeholder process led by the Office of the President and Cabinet, with technical assistance from the World Bank.

Economist Professor Gift Mugano described the reforms as "sweet music" but stressed that further action, such as the removal of the Intermediated Money Transfer Tax (IMTT), is needed to fully address business costs and formalize the economy.

The government has indicated that subsequent phases of this regulatory overhaul will extend to other key sectors, including Tourism and Retail.