High volumes of SIs exacerbate industry crisis

LIVINGSTONE MARUFU

The promulgation of high volumes of Statutory Instruments (SIs) have worsened the industry crisis as they bring uncertainties in the market and reduce ease of doing business in the country, multiple analysts have said.

President Emmerson Mnangagwa’s administration has promulgated more than 300 SIs in the past three years saying it wants to instil discipline in the market.

But, there has been lack of consistency in the policy formulations causing the investors to shun Zimbabwe.

“The past three and half years have seen the promulgation of a plethora of SIs which have destabilising effects on businesses,” the Zimbabwe National Chamber of Commerce immediate past president, Tinashe Manzungu, told Business Times.

“These are introduced with neither consultation with the business community nor impact analysis.”

He said the operating environment remained challenging for the business due to SIs which the market does not know which one to use.

“Currently, the market is saddled with debate on SI127 of 2021 and Statutory 118A of 2022 and the business is stuck between a rock and hard surface,” Manzungu said.

The government promulgated SI185 of 2020 which states that no person shall provide goods or services in Zimbabwe without displaying, quoting or offering the price of such goods and services in both the ZWL$ and foreign currency at the ruling exchange rate.

The SI outlawed SI212 of 2019 which provided for exclusive use of the ZWL$ to settle all domestic transactions as well as penalties for non-compliance.

Economist Gift Mugano said the flip flopping behaviour of the government was dealing a huge blow to business and investors as there will be no security over one’s investment.

“Any rational investor cannot invest in a country where a policy measure or a statutory instrument can be promulgated or put in place without consultations and is removed or amended thereby resulting in the affecting of confidence, security and ease of doing business,” Mugano said.

He added: “These are the reforms we are told to implement to show that we are a changed economy but we are not doing that to attract investment.”

After the passing SI 127 of 2021 in May last year, the government made a somersault on the new regulations through a press statement issued by the Reserve Bank of Zimbabwe on June 15 2021.

Key provisions contained in SI 127 include measures that prohibit businesses from selling goods and services or quoting them at an exchange rate above the ruling auction market rate, issuing buyers with a ZWL$ receipt for payment received in foreign currency, giving buyers a discount for paying in foreign currency and setting out penalties for businesses that refuse to accept payment in the ZWL$ at the ruling auction market rate.