Published: 05 September 2013

ZIMBABWE'S global competitiveness remained weak in a survey of the best places in the world to do business largely because of restrictive laws regarding foreign direct investments and property rights, according to the World Economic Forum's annual survey.

The latest World Economic Forum (WEF) Global Competitiveness Report 2013-2014 concluded that Zimbabwe global competitiveness as measured by the World Economic Forum remained unchanged at 131 for 201-14.

Sub-Saharan Africa continues its impressive growth rate of close to 5 percent in 2012 (with similar projections for the next two years), providing something of a silver lining in an otherwise uncertain global economy.
 
The report said Zimbabwe's policy environment was one of the least supportive in the world due to restrictive laws regarding foreign direct investment and property rights. Zimbabwe's policy environment at number 138 out of 140 has extremely poor assessments for laws related to foreign direct investment (FDI) and property rights.

Zimbabwe remains relatively stable at 131st position. Public institutions continue to receive a weak assessment, particularly related to corruption, security, and government favoritism, although overall the assessment of this pillar has improved somewhat since a few years ago.

Yet major concerns remain with regard to the protection of property rights (137th), where Zimbabwe is among the lowest-ranked countries, reducing the incentive for businesses to invest.

And despite efforts to improve its macroeconomic environment - including the dollarization of its economy in early 2009, which brought down inflation and interest rates - Zimbabwe still receives a low rank in this pillar (114th), demonstrating the extent of efforts still needed to ensure its macroeconomic stability.

Weaknesses in other areas include health (132nd in the health subpillar), low education enrollment rates, and formal markets that continue to function with difficulty (particularly with regard to goods and labor markets, ranked 130th and 140th, respectively).

Indeed, only emerging Asia registers higher growth. Growth has largely taken place on the backs of strong investment, favorable commodity prices, and a prudent macroeconomic stance.

There are, however, some regional variations, and in fact, in terms of underlying competitiveness, sub- Saharan Africa continues to reflect one of significant regional variations in the GCI, ranging from Mauritius (overtaking South Africa and coming in at 45th this year) to the lowest ranked Chad at 148th.

Economies with closer ties to advanced economies, such as South Africa, have not yet returned to pre-crisis growth rates. More generally, sub-Saharan Africa as a whole trails the rest of the world in competitiveness, requiring efforts across many areas to place the region on a firmly sustainable growth and development path going forward: the region continues to register a profound infrastructure deficit.

In addition, sub-Saharan Africa overall continues to underperform significantly in providing health and basic education (only Mauritius and Seychelles rank in the upper half of the rankings). Higher education and training also need to be further developed.

The region's poor performance across all basic requirements for competitiveness stands in stark contrast to its comparatively stronger performance in market efficiency, where particularly the region's middle-income economies fare relatively well (South Africa, Mauritius, and Kenya rank in the top 20 percent in financial market development).

Moving forward, technological uptake continues to remain weak, with only three economies (South Africa, Mauritius, and Seychelles) featuring in the top half of the overall GCI rankings on this pillar.

- businessdaily