Thumbs up to Ministry of Industry and Commerce

ON JULY 24, the Minister of Industry and Commerce unveiled the National Competitiveness Commission Board. Zimbabwe is joining about 40 National Competitiveness Councils or Commissions worldwide including United States of America, Egypt, Croatia, Saudi Arabia, Ireland, United Arab Emirates, Brazil and South Korea. As a matter of a fact, in Africa, Zimbabwe and Egypt are the only countries with National Competitiveness Commission (NCCs).

The functions of the NCC for Zimbabwe are as follows: ◆ Develop, coordinate and ensure implementation of key policy improvement processes, strategies, and initiatives that will enhance Zimbabwe’s global competitiveness. ◆ Monitor evolving sector specific subjects and strategies for enhancing Zimbabwe’s global competitiveness ◆ Review all existing and new business regulations to ascertain their impact on the cost of doing business and recommend amendments or repeals where appropriate to enhance competitiveness; Continuously monitor the cost drivers in the business and economic environment, and advise on measures to be taken to enhance productivity and address current and emerging costs challenges; Identify sectors of the Zimbabwean economy that have potential for global competitiveness, whilst also paying due attention to issues of structure and size of industry, technology gaps, skills, infrastructure and modernization needs; Review all price changes by public bodies ranging from central government, parastatals to local authorities that charge or levy user fees, rates from the public and/or clients; Undertake research and maintain a comprehensive nationwide statistical database to be used in the analysis of competitiveness across all sectors of the economy and developing periodic competitiveness frameworks and strategies; Provide a platform for dialogue between the public, private sector, labour, academia and non-state actors on the subject of competitiveness, to build an awareness and an advocacy media on matters related to competitiveness. Produce an annual benchmarking report on the National Competitiveness such as the National Competitiveness Report; This is a welcome development considering the fact that Zimbabwe’s number one energy after ravaging inflation is now uncompetitiveness. What is interesting to note is that, the Office of the President and Cabinet (OPC), since September 2015 to date, has led in the process of doing business reform agenda under the Rapid Results Initiative (RRI). The OPC’s work is actually addressing the second objective of the NCC which focuses on reviewing of all existing and new business regulations to ascertain their impact on the cost of doing business and recommend amendments or repeals where appropriate to enhance competitiveness. What it means is that the work of the NCC partially began in September 2015.

Working groups which are participating in the under the OPC RRI agrees with me that the level of effort and resources required are insurmountable! It therefore means that in order to achieve the nine functions stipulated in the proposed NCC bill a fully fledged organisation was needed. The promulgation of the NCC into law and the appointment of the board by the Minister of Industry and Commerce is a job well done!

In countries where National Competitiveness Commissions were established evidence shows that the NCCs played critical role in fostering exports and attracting foreign direct investments.

For Zimbabwe, the exports and foreign direct investments are a necessary requirement for economic take off. This country requires exports and FDIs to create jobs, generate liquidity (in the absence of printing) and foster economic growth.

With respect to export generation, for starters, Zimbabwe’s competitiveness advantage has never been empirically revealed. This fundamental void can be addressed by the NCC thereby helping the country to diversify its exports.

Beyond coming up with a matrix of services sector for export, out of the fifteen categories of services, the NCC can help in the country in developing products mix which Zimbabwe can favourable compete with the rest of the world regardless of the sector. From a trade perspective, competitiveness advantage evolves of time. Zimbabwe, in the mid-1990s had a well-diversified export basket with over thirty products significantly contributing to the country’s foreign exchange earnings.

Today, our exports have been reduced to three product categories, that is, minerals, tobacco and cotton, constituting about 85 percent of total exports. The possible explanation for this new order is two - pronged:

First, this economy has gone through serious structural changes which has seen some key sectors especially the manufacturing sector failing to cope. This has resulted in reduced capacity utilisation and in some areas demise of the industries thereby constraining the country’s capacity to export. In some areas, especially in the agricultural sector, in livestock, in particular, because of long gestations involved, the real challenge there relates to low productivity. To be continued . . . Dr Mugano is an Economic Advisor, Author and Expert in Trade and Competitiveness and Research Associate at Nelson Mandela Metropolitan University (SA) and Senior Lecturer in the Faculty of Commerce at Zimbabwe Ezekiel Guti University. Feedback: email: gmugano@gmail.com, Cell: +263 772 541 209.