ZIMBABWE slipped on the global competitiveness by one place to position 126 out of 139 countries during the period 2016-2017 due to poor levels of economic productivity, a Global Competitive Index (GCI) report has shown.
By Fidelity Mhlanga
GCI defines competitiveness as the set of institutions, policies, and factors that determine the level of productivity of an economy, which in turn sets the level of prosperity that the country can achieve.
The country scored 3, 41 points out of the required 7 points.
Economist John Robertson said the country’s poor ranking on competitiveness would continue to chase away investment in the country.
“Zimbabwe has remained an unattractive country to invest. There are too much licences and permits required to start business in the country. These are high costs which makes the country uncompetitive. I think we will remain low on attracting investments. The low ranking is slowing chances of getting new business in the country and yet we need investments, but we can’t have investment growth when we don’t have a good investment climate. The country is in a difficult position which needs to be fixed,” Robertson said.
In 2012-13, Zimbabwe was ranked 132 / 144 ,slightly going up to 131 / 148 in 2013-14 and rising to 124 / 144 in 2014 -2015.
The Global Competitiveness Report 2016–2017 comes out in the context of persistent slow growth and a near-term outlook that is fraught with renewed uncertainty fuelled by continued geopolitical turmoil, financial market fragility, and sustained high debt levels in emerging markets.
Another economist, Clemence Machadu, said the slip was in tandem with the country’s poor economic performance last year which was worsened by drought.
“The marginal slip in the GC Index is somehow a reflection of our economic performance last year where we registered a decline in growth. The persistent contraction in GDP, which reached a seven-year low of 0,6 % last year, also implies a deterioration in productivity with diseconomies of scale also creeping in – all weighing down our competitive edge,” Machadu said.
“Last year was even worsened by the terrible drought that we experienced, resulting in resources being channelled towards food importation and not development. That is why we performed badly on some of the indicators of the index such as goods market efficiency and business sophistication.”
Machadu said amendments of legislation such as the Procurement Bill and Deeds Amendment Bill, with the Special Economic Zones Act already operational, the next ranking was going to see a notable improvement.
The ranking was done focusing on various pillars of the economy such as infrastructure, financial market development, labour market efficiency, technological readiness, as well as health and primary education, among others.
On infrastructure, Zimbabwe was ranked at 123 after scoring 2,5 points and macroeconomic environment 101 after getting 4,1 points.
The country was ranked 119th in health and primary education scoring 4,6 points and 132 on efficiency enhancers with 3,1 points.
For higher education and training, the country was on position 115 with 3,2 points and on goods market efficiency it was on 132 with 3,5 points while labour market efficiency scored 127 with 3,4 points.