Govt to create collateral registry as it launches second 100-day Action Plan
GOVERNMENT has launched the second 100-day Action Plan to accelerate ease of doing business reforms in Zimbabwe. The plan will run until May 31.
The first 100-day Rapid Results Action Plan which was launched in September 2015 and ended by December 31, yielded various milestones including reducing the number of days it takes to register a property from 36 days to 14 days and reducing time taken to pay taxes from 242 hours to 160 hours.
It also set the basis for various Acts to be reviewed and this is now set to be achieved under the second 100 day plan. In fact, the second 100 days will be for enactment and implementation of the reforms as well as extensive public education and tracking of the impact of the reforms.
Launching the rapid results initiative, Chief Secretary to the President and Cabinet Dr Misheck Sibanda said Cabinet which adopted the first plan’s recommendations is looking forward to the implementation of the second phase of the RRA with speed in order to place Zimbabwe as a prime investment destination.
Some of the reforms under the second phase include amending the Companies Act, Shop Licensing Act and the Procurement Act while also aiming to reduce the days it takes to register a business from the current 30 days to 15 by May 31.
Others include reducing the number of days to get a construction permit to 120 days from the current 488 days. Solving insolvency issues will reduce to 1 year from 3 years.
The Companies Act amendments were currently under circulation for input. Sibanda said the bill will respond to demands of business and will also spell out measures to protect minority investors.
Deputy Chief Secretary to the President and Cabinet Dr Ray Ndhlukula said that part of the widespread reforms will be the creation of the registry for immovable collateral that will enable use of movable property as security for financial credit.
Financial institutions and other providers of financial credit require immovable property as security against loans, which many individual borrowers and small to medium enterprises do not have.
Further, tied to the creation of a collateral registry will be the setting up of a credit reference bureau system, complementary to work that the Reserve Bank is already doing.
The credit reference bureau will contain a data base of borrowers and their performance in previous borrowings to help lenders to assess the creditworthiness of individual borrowers. This will put an end to excessive multi-borrowing, which in the end up as non-performing loans or bad debts.
Dr Ndhlukula, however, noted that some of the principles and draft bills to give effect to the extensive reforms had not been presented to respective ministries and departments.
“Some of the principle and draft bills have not yet been taken to the respective ministries, departments and agencies for processing. The Chief Secretary to the President and Cabinet (Dr Sibanda) will engage them to take the process (doing business reforms) forward,” he said.
Zimbabwe was last year ranked 155 out of 189 countries on the ease of doing business report but has since last year carried out a reasonable policy reforms.
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