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PRESENTED BY

Mr. Penias Chabwela

Programme Officer

Private Sector Development Reform Programme (PSDRP)

Ministry of Commerce Trade and Industry

May 30 2012

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Background and Reform Context

Nature of reforms

Business Licensing Reform

Findings and recommendations of the

Business Licensing Reform Report

Achievements, Lessons and Challenges

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PSDRP is a framework for the Government of

Zambia, created to reflect its commitment to

improving the business environment and to reduce

the cost of doing business.

GRZ launched PSD Reform Programme (PSDRP) in

2004 incorporating licensing reform

2008, GRZ renewed mandate for licensing reform

Five priority areas:

Doing Business Reforms

Business Licensing Reforms

Trading Across Borders Reforms

Labour Reforms

MSME Development Reforms

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KEEPING THE BIGGER PICTURE IN VIEW

Contributes towards attainment of Zambias

2030 vision Middle prosperous income Nation

by 2030 A good and healthy business environment

facilitates growth and reduces poverty.

A means to addressing inappropriate

regulations, laws, policies, institutions thatgovern business activities in one way or

another

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Substantially reduce the number ofunnecessary licensing requirements inZambia

Make the licensing regimes simpler,transparent and easy to comply with

Ensure licensing is focused on legitimate

regulatory purposes

Focus GRZ, stakeholder attention on businessregulation, not revenue generation, as theprimary purpose of business licensing

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Licenses should fulfil legitimate regulatorypurposes

There are only two main rationales for

licensingto safeguard the public interest and to

manage limited natural resources.

Certain activities must be regulated to

guarantee the health, safety or security of

consumers and to protect the natural

environment.

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(A) Taking Stock of all Business Licenses: Identification of all business licenses, permits and

certifications in Zambia, both on & off the books

Process was comprehensive, orderly and transparent

(B) Reviewing licenses & making recommendations:

Rapid review by Business License Reform Committee (BLRC) ofall licenses against clearly agreed criteria Is it legal? Does it serve an essentially regulatory purpose or is it

necessary from an environmental, public safety /healthperspective?

Is it business friendly?

Licenses not complying with these criteria were putforward for elimination

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(B) Reviewing licenses & make recommendations (contd)

Burden of proof to justify licensing placed on regulators

More stringent filter criteria applied as a second step Can the target groups be reduced?

Can the license be converted into a notification? Can the frequency with which licenses are renewed be reduced?

Can the license be amalgamated with other licenses?

Can time-limits be established for government responses?

Can the silence-is-consent (or denial) rule be applied?

Can information requested in licenses be obtained from otherauthorities?

Any license that is needed but is not business friendly will besimplified

(C) Make recommendations to GRZ on reformrequirements

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Zambia has too many business licenses andregulations which makes the business environmentun-conducive and the cost of doing business inZambia high

The regulatory and licensing frameworkencompasses 86 Acts of Parliament, in addition tonumerous pieces of regulations, rules and By-laws.

517 business licenses identified

These licenses are administered by 18 Ministries, 72Local Authorities and 33 regulatory agencies andapply at national, provincial and local governmentlevels.

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Total compliance cost incurred by Businesses isK2.2 trillion

Excessive duplication in terms of informationrequirements when business apply or renew theirlicenses.

Limited systems networking among licensingauthorities and most regulators operate as standalone licensing platforms.

The number of steps required to obtain a licenseare no less than an average of 6 per license.

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Out of the 517 licenses identified by the BLRC:

290 Licenses were recommended for Retention they served a legitimate regulatory purpose.

170 Licenses were recommended for elimination

The were either illegal or redundant 57 Licenses were recommended for

reclassification into levies, reports ornotifications.

99 Licenses were to be mergedinto 21 licenses 36 local government business permits were to

be converted into a single business levy payableby businesses across the counter at each localauthority concerned.

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Reducing Administrative Cost of Compliance byat least 30%

Business Licenses for Efficient Regulation notRevenue Raising

Bundling Comprehensive Licensing Reformsthrough the Decision-Making Process Expediting Implementation of E-Governance Bundling Comprehensive Licensing Reforms through the

Decision-Making Process approve the recommendations in the Report as a single package.

Establishing an Electronic Registry to Secure LicensingReforms

Assure Quality of all new Licenses:

Establish of a permanent unit responsible for thequality review of all new licenses

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Enactment of new laws regulating thelicensing and regulatory framework;

A streamlined and simplified licensing andregulatory processes and procedures;

Enhanced tax compliance and growth of theConsolidated Fund;

Increased investment and economic growth;

Improved service delivery; and;

Improved ranking in the ease of doing business.

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Approval of BLR report

Inventory of licenses and their associated costs

Revenue Impact Assessment undertaken

48 Acts reviewed & enacted

E Registry (database)for business licenses set up

183 licenses have uploaded onto the e-registry

(63%).

113 licenses eliminated (66%) 70 licenses were amalgamated

18 licenses were reclassified as levies

Introduction of Single Business Levy

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Limited ownership of reforms

Slow pace of implementation

Reforming a licensing regime geared towards

revenue maximization Lack of convergence from PSD stakeholders

Slow pace of implementation

Weak dialogue structure (s)

Poor coordination among government institutions Sustaining the reforms amid conflicting priorities

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DB indicators a rallying point and basis for reform

momentum Sustained political and technical leadership key

Need to guard against the dangers of re-regulation

Potential for institutional: resistance early in

process Benefits of wider reform effort and a growing

economy

Benchmarking and learning from other countries

especially in the region (The Kenya experience

provided valuable lessons)

Implementation of reform actions is greatly

assisted when lead institutions are headed by

reform champions

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THANK YOU

FOR YOURATTENTION!