Business suffocates under regulatory burden, red tape
STAFF WRITER
Local businesses are buckling under the weight of excessive bureaucracy and regulatory inefficiencies that continue to stifle operations, delay growth, and erode competitiveness.
Many companies are being forced to scale back, hike prices, enter corporate rescue, or shut down altogether.
Industry leaders say the regulatory environment is riddled with overlapping, outdated processes that drive up the cost of compliance.
At a stakeholder dialogue on regulatory impact assessment held in Harare, Confederation of Zimbabwe Industries (CZI) CEO Sekai Kuvarika highlighted how these bottlenecks have crippled operations across various sectors.
“Some businesses are forced to halt operations until regulatory approvals are met. The systems are duplicative and slow down the ease of doing business,” she said.
Kuvarika stressed that government efficiency is now a key factor in competitiveness and that Zimbabwe trails regional peers, especially South Africa, in industrial performance rankings.
The regulatory burden has proven especially punishing for small to medium enterprises (SMEs), many of which are expected to pay up to US$8,000 annually in compliance fees. This has driven many into the informal sector, operating outside regulatory oversight to survive. According to central bank data, SMEs generate US$14.2 billion in revenue annually, with US$2.5 billion circulating outside formal financial systems.
“These SMEs do not have that level of capitalisation or turnover,” said Kuvarika. “We’re penalising them for failing to meet requirements that are unrealistic in their context.”
She argued that regulatory reform discussions often focus only on compliance costs rather than assessing the broader economic impact. “If we begin to present how current regulations negatively impact economic growth—and contrast that with the potential benefits of competitive regulations—we’ll start seeing progress.”
Zimbabwe’s lack of a competitive regulatory framework has also contributed to lost market share in regional and global trade.
In response, Industry and Commerce Minister Nqobizitha Ndhlovu—through a statement delivered by his deputy Rajeshkumar Modi—promised sweeping reforms to improve the country’s business climate.
He outlined plans for competitive energy policies, the adoption of renewable energy, modernisation of infrastructure, and simplification of regulatory processes. Sector-specific rules in agriculture, manufacturing, and services will also be reviewed to stimulate innovation and growth.
“The government is committed to working with the private sector and civil society to ensure laws support inclusive economic development,” he said. “We urge all stakeholders—local and international—to unite around this national priority. Dialogue must go beyond talk. It must lead to tangible steps to streamline regulations and reduce compliance costs.”
These policy shifts follow a growing call to action from business leaders, who raised the alarm during the inaugural Competitiveness Summit held in Bulawayo earlier this year.
