The study supports Vision 2030 and the National Development Strategies (NDS1 and NDS2), which emphasize trade facilitation, industrialization, and competitiveness, while aligning with the objectives of regional integration, through the African Continental Free Trade Area (AfCFTA), SADC and COMESA. The assessment covered eight major border posts that represent Zimbabwe’s most critical trade corridors
vis-à-vis Beitbridge, Chirundu OSBP, Forbes, Nyamapanda, Plumtree, Victoria Falls, Kazungula and Sango.

A mixed-methods approach combining quantitative and qualitative tools was employed, including structured questionnaires, direct observations, and desktop reviews. Data were collected from border stakeholders such as Government Agencies, transporters and clearing agents. Quantitative data were used to establish baselines
on clearance times, costs, and infrastructure adequacy, while qualitative data provided insights into institutional and coordination challenges. Data triangulation across sources ensured credibility and accuracy
of findings.

The study established that inefficient border processes remain a major impediment to Zimbabwe’s trade competitiveness.

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Border Efficiency Management System (BEMS)

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Zimbabwe’s CBCA program is being implemented by Bureau Veritas, Cotecna, and EAA Company which are global conformity assessment companies, and is overseen by the Ministry of Industry and Commerce (MIC). The Standards Association of Zimbabwe (SAZ) is responsible for inspections at destination. Zimbabwe Revenue Authority (ZIMRA) enforces CBCA requirements at borders by ensuring that only certified goods are cleared for entry.

These implementing bodies ensure that imported goods meet national quality and safety standards before entering the country.

CBCA IMPACT ASSESSMENT REPORT

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The repeal reopens pricing flexibility for businesses, shifting the balance back toward market-driven pricing mechanisms, hence providing fair competition for all. Businesses regain control over pricing models and now compete based on productivity and efficiency instead of exchange rate differentials.

Given the shortage of foreign currency on the interbank market, those companies accessing the foreign currency at the parallel exchange rates are given the flexibility to charge reflective prices towards the achievement of a market-determined rate. This also allows firms to realign prices to operational realities, improving profitability and sustainability. The repeal also enhances supply chain responsiveness as firms no longer absorb exchange rate losses. On the other hand, this may lead to the reintroduction of inconsistent pricing practices across sectors, leading to market fragmentation, and consumers are likely to be exposed to price distortions from foreign exchange volatility.

The repeal fosters a price discovery mechanism, allowing differentiation through innovation, service quality, and efficiency – not just compliance. A shift from price-controlled competitiveness to value-based competition is enhanced. However, safeguards preventing sellers from using speculative exchange rates to exploit consumers are lifted; hence, the risk of a return to hyperinflationary behaviors if sellers begin the usually aggressive speculative pricing again.

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Analysis of the Impact of the Repeal of S.I. 81A of 2024

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The suspension of all tariffs levied on goods originating from the United States is intended to facilitate the expansion of American imports within the Zimbabwean market and demonstrates Zimbabwe’s commitment to a framework of equitable trade and enhanced bilateral cooperation.

However, tariff suspension in Zimbabwe, while potentially leading to lower consumer prices and increased trade, could also negatively impact domestic industries and potentially lead to a decline in Government revenue.

The overall trade volume between Zimbabwe and the USA has generally been modest compared to Zimbabwe’s trade with other countries, with South Africa being the biggest trading partner.

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ANALYSIS ON THE IMPACT OF REMOVING TARIFFS ON GOODS IMPORTED FROM THE USA

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The charges also include non-productive land, which the firms are not benefiting from commercially. For example, a timber producer with 45,000 hectares of land will be charged USD135,000 per year, at a time when a significant portion of that land is mountains, rivers, graveyards, conservatives, and illegal settlers from which the company does not derive benefits.

The Forest Commission of Zimbabwe is mandated to regulate the trade in timber and timber products in Zimbabwe. The Commission issues timber trading licenses and timber movement permits as provided by the Statutory Instrument (SI) 116 of 2002.

The AMA administers various regulations, which negatively impact the cost of doing business in Zimbabwe. For example, the S1 147 of 2012 requires companies in the business of buying and contracting agricultural products (including feed producers) to register annually and comply with several obligations. For example, abattoirs must register with AMA and pay annual registration fees, despite being registered and paying annual registration fees to the Veterinary Public Health (VPH) Department.

Apart from that, the SI 129 of 2017 requires registered cattle abattoirs to pay USD10 per slaughtered head which is a significant cost. The same SI requires milk processors to pay USD0.01 per litre and USD0.01 per chick produced.

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REGULATORY COSTS IN ZIMBABWE

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This analysis provides a snapshot of overlapping regulations impacting the business performance. Zimbabwe’s regulatory requirements and implied costs result from the overlapping mandates of some key institutions, and the Commission examines these critical factors to ascertain the respective implications to the country’s business performance and competitiveness.

Overlapping Mandates of Key Institutions. In Zimbabwe, different agencies demand separate licenses for environmental compliance, health and safety, and labour practices, even if they cover similar concerns. This duplication increases compliance costs, as companies may need to engage additional personnel or legal support to manage these requirements. An example of this regulatory-induced challenge in Zimbabwe is that of institutions with the mandate of regulating agriculture and manufacturing firms. For instance, the Environmental Management Authority (EMA) and the City of Harare administer the hazardous substance storage license. Companies must pay for two (2) licenses from different agencies which serve the same purpose. This ultimately increases the regulatory costs of companies.

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ANALYSIS ON THE IMPACT OF OVERLAPPING AND MULTIPLICITY OF REGULATIONS ON ZIMBABWE’S BUSINESS ENVIRONMENT

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Currently, the IMTT rate is 2% for transactions in local currency and 1% for USD transactions, and this was effected through Section 4 of the Finance Act Number 13 of 2023. However, for single transactions equivalent to or exceeding US$500,000, a flat IMTT of US$10,150 is applied, providing a ceiling to the tax burden on substantial transfers.

It is important to note that most countries that have implemented taxes on electronic money transfers have a large informal sector and a large unbanked population. To this end, the tax is meant to tap into the informal sectors, so that they contribute to Government revenues.

Several countries, particularly in Africa, have implemented taxes on mobile money transactions and these vary in structure and rate. On the other hand, developed countries have not implemented specific transaction taxes on mobile money services akin to those seen in some developing nations.

However, developed countries have introduced regulatory measures and reporting requirements to monitor and manage digital financial transactions. A comparison of IMTT with other countries in the region shows that Zimbabwean rates of 2% for transactions done in local currency is higher than those charged in the region …..

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Analysis Of The Impact Of Intermediary Money Transfer Tax

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The TFF Operational Modalities and loan Characteristics

The facility will be availed through the normal banking channels. The Reserve Bank will lend collateralised loans to the banks, which will, in turn, lend to their customers which is the productive sectors in this case.

The banks will perform the credit risk of the beneficiaries implying that banks will be fully responsible for credit assessment and customer due diligence.

The lending banks are fully accountable for the way funds are utilized by the borrowers (fully responsible for ensuring that the funds are applied for the purpose for which they were borrowed) and are therefore expected to monitor the performance of the borrower throughout the loan tenure.

Funds are only disbursed to the lending banks upon the submission of a drawdown list indicating the names and loan amounts of the ultimate beneficiaries. This implies that funds will not be readily available for lending.

All the loans disbursed under this facility will be in ZiG and borrowers can repay in ZiG or in foreign currency at the ruling exchange rate.

The maximum tenure for the loans under this facility shall be 270 days running from the disbursement date.

The banks will borrow from the central bank at an interest rate of 20% per annum and on-lend at a maximum all-in interest rate of 30% per annum. The interest rate is subject to review by the Monetary Policy Committee (MPC).

If funds are found to have been abused by the borrower, the full loan amount becomes immediately due and payable. The loan will attract a penalty interest rate equivalent to the prevailing overnight accommodation rate for the duration that the loan was outstanding. The penalty will be levied on the borrower through the lending bank.

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Analysis of the impact of the targeted finance facility on business competitiveness

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The indicators are categorised into four pillars, namely:
• Economic Performance;
• Government Efficiency;
• Business Efficiency; and
• Infrastructure.

The highest possible score is 100 points, which measures the frontier of economic competitiveness.
Although Zimbabwe is not ranked under the IMD WCY and is in the process of engaging the IMD to become its local Partner Institute for coordinating the business executive survey, the competitiveness indicators provide useful insights for Zimbabwe.

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International Benchmarking Report on IMD – June 2023

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The National Competitiveness Commission produced Sugar Value Chain Competitiveness Report in 2021. The Sugar Value Chain Competitiveness Report was produced in line with one of the Commission’s functions of facilitating the development of sustainable evidence-based value chains, which is key in enhancing the country’s global competitiveness and domestication of existing value chains as espoused in the National Development Strategy 1 (NDS1).

The report analysed the country’s sugar production and evaluated local competitiveness relative to other comparator countries such as Eswatini, South Africa and Brazil, among others. Furthermore, the Commission conducted an international bench-marking visit to Brazil, in March 2022, which is one of the top sugar producers in the world.

The Report also proffered evidence-based recommendations thereof, which are critical to enhance competitiveness in the value chain.
Following the launch of the report in February 2022, the Commission engaged relevant authorities to work towards implementation of the recommendations from the Report, and a total of eight (8) recommendations were taken on board by the Government, through the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development (MoLAFWRD).

Enhancing competitiveness of the value chain requires collaborative effort among stakeholders, hence the Commission is going to continuously engage players in the value chain, with particular focus on the farming node. Farmers/out-growers denote the first node of the value chain and addressing its competitiveness gaps is critical as this will cascade into the entire value chain.

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Sugar Value Chain Competitiveness Progress Report June 2023

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