1.2.4 Special Economic Zones
The Government has instituted legislation for Special Economic Zones (SEZs) and appointed a board to oversee the SEZs and making progress with the ongoing operationalization of the SEZs – (three key areas have, been identified for commencement – Sunway City, Bulawayo City and Victoria Falls). This will measurably improve FDI and investment in Zimbabwe. In many countries, including China, Special Economic Zones have underpinned sustained growth of the economy with significant exports generation, through the accumulation of foreign direct investment and new technologies that are an integral part of the Special Economic Zones framework.
1.2.5 External Debt and Arrears Clearance
The Government has also made progress on external debt and arrears clearance, in terms of re-engagement with the Multilateral Financial Institutions. A debt repayment plan has been agreed, tentatively with the Multilateral Financial Institutions but crucially, finalization of the concrete Arrears Clearance Program is tied to the domestic macro and structural reforms, which are a prerequisite for sustainable growth and macroeconomic stability. Debt and Arrears Clearance will open new opportunities for medium and long term financing, critically important for the productive sectors notably, agriculture, manufacturing and infrastructure sectors.
1.2.6 Doing Business Reforms
Zimbabwe has among the highest costs of doing business in the SADC region, with some of the cost lines well in excess of 20% above regional country comparatives. This is critically contributing to the lack of competitiveness of Zimbabwe’s exports in the region and beyond.
The sources of Zimbabwe’s high costs of business are many, including but not limited to:
- High utility tariffs (ZESA, Water, Municipality tariffs,)
- A disparate range of local authority and central Government charges/taxes (e.g. prohibitive EMA charges)
- High wages, (relative to productivity);
- High financing costs (inability to access cheaper long term funding);
- Red tape and delays in movement of raw materials and other inputs
- High transport costs (road haulage vs cheaper railway transport)
- High levels of Corruption; and
- The strong US dollar environment
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