COMPANIES ACT ARCHAIC : MINISTER
Justice, Parliamentary and Legal Affairs minister Ziyambi Ziyambi, says government is determined to improve the ease of doing business as part of measures to resuscitate the country’s wobbling economy.
Ziyambi, who was delivering a keynote address at a stakeholder workshop to review the Draft Companies and Other Business Entities Amendment Bill in Harare yesterday, singled out Zimbabwe’s regulatory framework as one of the major impediments to economic growth.
“Clearly, the country’s regulatory framework has not been conducive and the results and dire ramifications are there for everyone to see,” said Ziyambi.
The minister cited Zimbabwe’s position on the Ease of Doing Business Index as proof of the country‘s lack of competitiveness.
“Ranked 159 out of 190 economies on the Ease of Doing Business Index according to the latest World Bank annual ratings, the new political dispensation has an unenviable task of convincing the world that the country is indeed open for business,” he said.
Ziyambi is convinced that small and medium enterprises will thrive if the Companies and Other Business Entities Amendment Bill is passed as law.
“It goes without saying that when systems, processes, rules and regulations are business-friendly, setting up of businesses is made easier not just for big companies but also smaller ones that have less capital at their disposal.
“It is pertinent to note that for larger corporations and businesses that have access to the means and personnel or third part agencies to process all the paperwork, payments, registrations etc. this usually takes place quickly and without much of a hassle.
“However, with small and medium enterprises, more red tape can often result in obstacles that ultimately prevent them from moving ahead with their business in a timely manner or discourage individuals from pursuing businesses in their local economies.
“In addition to the above, transaction costs form a major part of setting up shop for small and medium sized businesses,” said the Justice minister.
He attributed corruption and the failure to attract foreign direct investment to a large extend on the limitations imposed by the current Companies Act which was passed in 1951.
“In Zimbabwe the opaque and restrictive regulatory framework for setting up and even operating a business, discouraged foreign direct investments , limited opportunities to economic opportunities and stimulated corruption,” said Ziyambi.
In addition to Ziyambi, yesterday’s stakeholder workshop to review the Draft Companies and Other Business Entities Amendment Bill featured deputy Attorney-General responsible for Legislative Drafting Nelson Dias, director of legislative drafting Mupariwa Mukaratirwa, Bankers Association of Zimbabwe’s Nqobile Munzara as well as presentations from the Institute of Chartered Secretaries and Administrators in Zimbabwe and the Institute of Directors.