â€˜ONE STOP SHOPâ€™A real concept for investment promotion agency
The World over provision of goods and or services under one roof has become the global best practice to lessen the challenges for would be customers or investors. In Africa, some investment agencies including Rwanda, Kenya and Egypt amongst others are providing all the required investment services under one umbrella body and Zimbabwe should be no exception.
The procedures, bureaucracy and delays surrounding business start up and approvals/registration in developing countries are a cause for concern. Many developing countries including Zimbabwe are ranked very low on the Doing Business Index. In most developing countries investors often have to wait for long periods of up to one year in some instances, pay bribes, have to visit relevant offices many times and in some instances have their files lost in the process of applying for investment licenses.
This results in frustration on the part of the investors as they meet with blockages at institutional levels. Often the many obstacles are a deterrent to investors and they are left with no choice but to move to another investment destination where they â€˜feel wantedâ€™. This creates a wrong image for the country, wrong publicity and often the countryâ€™s credibility will be at stake. More importantly, the opportunity cost of the forgone investment projects is very high.
Most developing countries have adopted â€˜One Stop Shopsâ€™ as institutional substitutes to bypass or accelerate existing procedures where they are dysfunctional. The motive behind establishment of one-stop-shop investment promotion agencies is for investors to have contact with one single entity to obtain all the necessary paperwork in one streamlined and coordinated process.
One stop-shops are beneficial to a country for among other reasons; reducing the high cost of doing business which would normally obtain in a country where an investor deals with multiple agencies, eradicating the use of discretion and lack of transparency in granting approvals, licenses and permits, eliminate over-bureaucratization in procedures and processes. One stop shops allow for efficient service delivery and a smooth flow of FDI and investor tracking. Ultimately the result would be an efficient investor relations and service system.
In Zimbabwe one of the objectives of the merger between the former Exports processing Zones Authority of Zimbabwe and the Zimbabwe Investment Centre was to create a one-stop shop investment promotion agency that would expedite the investment approval process. Previously inter-Ministerial Investment Committees would convene; in the case of ZIC fortnightly to approve projects and in the case of EPZ to recommend projects for approval to the Board. For some time under ZIA the inter-Ministerial Committee would convene and recommend projects for approval to the Board Investment Committee.
Through this course the approval process would sometimes be delayed by failure to raise a quorum in the Board meeting. Consequently potential investors were disadvantaged by this delay and this created apathy.
Investors have also faced challenges regarding the acquiring of secondary licences like investorsâ€™ residence and employment permits. This is despite the fact some of them would have fulfilled the listed requirements like providing proof that funds have been transferred to a Zimbabwean bank account. In other cases investors are left in a dilemma as the banks require them to acquire residents permit before they can open bank accounts. This is more of a catch 22 situation. I t has also been difficult for potential investors who would have come on business visas to get extension of their visas. Investors would be seeking more time to explore investment opportunities but would not be able to do so without an extension of their visas.
For the above reasons and the need to expedite the project approval process ZIA has resolved to become a one stop shop. Pursuant to attaining this objective a stakeholdersâ€™ consultative workshop was held sometime in May this year. Stakeholders concurred on the need for a one-stop-shop investment promotion agency. Key stakeholders included the Department of Immigration Control, the Ministry of Labour, ZIMRA, Registrar of Companies and Deeds and investors already active in Zimbabwe.
Various models of one-stop shops were critically examined and it was resolved that the Rwandan model be adopted. Under the model officials from various Government departments who deal with investors converge and make decisions within that meeting. Officials should be senior enough to make decisions and not want to refer thorny issues to superiors. Other models like the Egyptian model where 33 Government departments are housed under the General Authority for Investment and Free Zones building, or the Mauritian model where the Board of Investment is linked with other Government departments through a computer network were deemed to be not feasible at this point in time.
It would be a mammoth task for ZIA to house all government departments under one roof; neither can we be able to have a network link with all relevant Government departments. This is largely because of inadequate resources. It is imperative that computerization and a high level of ICT be developed first before we can move towards implementing a â€˜virtual networkâ€™ one-stop-shop.
ZIA is now working on adopting the Rwandan model. A steering committee was set up in the wake of the one-stop-shop investment promotion agency workshop to oversee the transformation of ZIA into a one-stop shop. The Committee comprises ZIA, Department of Immigration, Ministry of Labour, ZESA, ZIMRA and the City of Harare. To date meetings have been held with these departments, the objective being to see how procedures can be streamlined.
A tour of countries which have successfully implemented one â€“stop-shops is being mooted. The tour will be by members of the Steering Committee so that they can have an appreciation of a one-stop-shop investment promotion agency. Countries to be visited will include Rwanda, Uganda and/or Kenya. After the tour a roadmap/implementation matrix will then be drawn for ZIA. With the advent of a one-stop shop investment agency Zimbabwe will once again become the destination of choice for foreign investors and the country will reclaim its â€˜Jewel of Africaâ€™ status.