THE World Bank has renewed calls for the Zimbabwean government to urgently cut bureaucratic red tape and streamline regulations to spur private-sector growth and job creation.
The appeal followed the release of the bank’s report last month titled The Zimbabwe Economic Update: Fostering a Business-Enabling Regulatory Environment for Private Sector Growth.
The update noted that the number of Statutory Instruments (SIs) more than doubled between 2016 and 2020, climbing from 137 to over 300.
Many of these SIs introduced or revised sector-specific fees, exemptions, and licensing requirements, further increasing regulatory pressures on businesses.
“Ask a small business owner in Zimbabwe what slows them down, and regulation often comes up among the first answers,” the World Bank said.
“There are permits to renew, inspections to arrange, levies to pay—sometimes repeatedly and through different agencies,” the bank said in its new research paper titled ‘Cutting red tape supports private sector jobs in Zimbabwe’.
“These demands absorb time and resources that could otherwise go toward growth, posing a challenge for Zimbabwe’s National Development Strategy 2 (2026–2030), which targets private investment as a lever to achieve middle-income status.
“With World Bank support, the government of Zimbabwe (GoZ) has begun addressing these bottlenecks in sectors with high potential for job creation, starting with three priority sectors: tourism, agro-processing, and agriculture.”
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The bank noted that Zimbabwe’s regulatory system did not become this complex overnight.
“New statutory instruments were introduced over time, mandates were expanded, and additional authorities became involved in overseeing business activity.
“Many requirements were layered on incrementally, often to generate revenue for agencies rather than to address clear public protection risks. This has resulted in a heavy burden on firms.”
World Bank Enterprise Surveys show that licensing is among the most frequently cited constraints by Zimbabwean firms, at rates well above those found in peer countries.
These surveys also show that 70% of informal firms mention the time and cost of registration as barriers to formalising—the highest share in Sub-Saharan Africa.
Economists and analysts agree that if regulatory burdens were eased, a significant portion of Zimbabwe’s businesses—76,1% of the 204 798 operational establishments, which currently operate informally—could contribute more directly to government revenue.
“For many small businesses, remaining informal is a commercial calculation rather than a preference, as compliance costs outweigh uncertain benefits,” the World Bank said.
“The same pressures shape decisions among formal firms: during early consultations with the World Bank, some businesses reported postponing hiring or delaying equipment upgrades because recurring levies and permit requirements made scaling operations risky.”
The World Bank revealed it has worked closely with the Ministry of Finance and the Office of the President and Cabinet to support a targeted approach to regulatory reform by focusing on the circumstances in which firms actually operate.
They mapped all regulatory requirements along value chains, from market entry to day-to-day operations, linking each to its legal basis, implementation authority, frequency, and cost.
“These stocktaking exercises were validated through workshops with public and private stakeholders, grounding the analysis in a practical understanding of local rules and helping build awareness within the GoZ on the heavy regulatory weight that firms are expected to shoulder,” the World Bank said.
Guided by this evidence, stakeholder consultations, and international good practice, the government began implementing concrete reforms in 2025.
“These reforms led to the reduction or elimination of several requirements that imposed high costs without commensurate public benefits, including Agricultural Marketing Authority levies on livestock transactions, repetitive inspections for accommodation establishments, and consignment-based conformity assessment obligations for selected equipment imports,” the World Bank said.
“Taken together, these reductions in regulatory requirements for businesses are projected to cut compliance costs by 20% to 90% across Zimbabwe, depending on firm size and activity, while shifting regulation toward a risk-based approach that reduces repetitive inspections and conformity checks for low-risk, compliant firms, and allows oversight to focus where risks are highest.”
In 2025 cabinet directed that all new regulatory fees and processes to should undergo a Regulatory Impact Assessment before approval.
“In parallel, the Zimbabwe Investment and Development Agency launched a new eRegulations portal, giving firms public access to consolidated information on regulatory requirements,” the World Bank said.
“Encouraged by early results, the GoZ is now applying this same evidence-based, value-chain approach to a wider range of sectors, including transport, energy, retail, and selected manufacturing and agriculture subsectors.
“Taken together, these initiatives underscore an important lesson: regulatory reform is most effective when it is aligned with government priorities and focuses on actionable, implementable changes, rather than broad diagnostic exercises.”
