Zimbabwe

BERF Portfolio

Zimbabwe has been an important client for BERF, and indeed our first project was completed in Zimbabwe during the inception phase, which an annual review for the Business Enabling Environment Programme. DFID Zimbabwe has commissioned evidence and learning notes on public private dialogue (completed), and adaptive programming (underway).  Other initiatives are in the pipeline.

Completed Projects

Planned and Ongoing Projects

Context

After suffering severe economic decline between 1998 and 2008, Zimbabwe’s adoption of a multicurrency regime in 2009 helped stabilise the economy. Zimbabwe’s economy grew by 3.8% in 2014, 1.5% in 2015 and is projected to have grown at 1.6% in 2016. 22.5% of Zimbabwe’s population of 13 million lives in extreme poverty.

The July 2013 national elections delivered an outright majority for President Mugabe’s ZANU-PF party. The UK Government raised grave concerns over how the elections were conducted. Nevertheless the UK remains committed to supporting the people of Zimbabwe. Political instability has characterised Zimbabwean policy making and is a significant constraint to inclusive, pro-poor economic growth.

Soon after the 2013 elections, the Government of Zimbabwe produced an ambitious, flagship economic recovery plan called the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZIMASSET).

DFID Programme

DFID will continue to align its development efforts where possible to GoZ strategies such as ZIMASSET, while ensuring that no UK aid goes directly through GoZ systems due to concerns about their capacity to manage such funds effectively. UK aid is instead channelled through multilateral institutions such as the UN and the WB, as well as international NGOs and the private sector.

The DFID country programme vision 2011 to 2016 is focused on three areas: (i) promoting economic development, (ii) support the provision of basic services including access to health, education and water, (iii) help to strengthen democracy.

The country programme 2016 – 2017 is valued at £47 million with Health, Education, and Other being the biggest commitments (39%, 14% & 21% respectively). As of April 2017, the DFID Dev Tracker shows 16 projects being implemented.

Doing Business

In addition to political instability and poor macroeconomic policies, Zimbabwe’s investment climate has been severely damaged by a lack of respect for the rule of law and a deteriorating business enabling environment. Key constraints include a failure to protect property rights and forced “indigenisation” of businesses. Limited access to capital is hampering the agricultural and agribusiness sectors as well as mining and manufacturing.

The 2017 World Bank Doing Business overall ease of doing business ranking for Zimbabwe is 161 out of 190 countries, a slight increase over its 2015 ranking of 171 out of 189. The Distance to Frontier (DTF) score was 47.1 in 2017, slightly below the overall Sub-Saharan Africa average of 49.7 and well below Zambia’s 60.4, Botswana’s 65, Mozambique’s 54 and South Africa’s 65).   The ‘Distance to Frontier’ indicator also showed a improvement from (46.95 in) 2015 to (48.17 in) 2016, before falling in 2017, (to 47.1).  The Doing Business report notes “In Zimbabwe, the Office of the President and Cabinet oversees the Doing Business reform initiative using a Rapid Results Initiative approach. The Chief Secretary to the President and Cabinet is the strategic sponsor of the Initiative. Permanent Secretaries from more than 10 ministries are responsible for implementing measures outlined in the action plan for each of the Doing Business indicators.”  Improvements in 2017 included

  • Dealing with construction permits: Zimbabwe made dealing with construction permits faster by streamlining the building plan approval process.”
  • Registering property: Zimbabwe made registering property easier by launching an official website containing information on the list of documents and fees for completing a property transaction, as well as, a specific time frame for delivering a legally binding document that proves property ownership.”
  • “Getting credit: Zimbabwe improved access to credit information by allowing the establishment of a credit registry.”

Less positively, the report highlights:

  • Trading across borders: Zimbabwe made trading across borders more difficult by introducing a mandatory pre-shipment inspection for imported products.”
  • Labour market regulation: Zimbabwe reduced severance payments and introduced stricter rules governing fixed-term contracts”