Mu lqqAS IMS js RESEARCH PAPER SERIES Implementing Deregulation and Promoting Foreign Direct Investment in Africa A Report on Six Workshops Les politiques de dereglementation et de promotion des investissements directs etrangers en Afrique Un compte rendu de six ateliers Heinz Bachmann Investment Marketing Services (IMS) Multilateral Investment Guarantee Agency IMS RESEARCH PAPER SERIES Implementing Deregulation and Promoting Foreign Direct Investment in Africa A Report on Six Workshops Les politiques de dereglementation et de promotion des investissements directs etrangers en Afrique Un compte rendu de six ateliers Heinz Bachmann The World Bank Washington, D.C. Copyright C) 1996 The World Bank/iFC/MIGA 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing June 1996 The Multilateral Investment Guarantee Agency (MICA), an affiliate of the World Bank Group, was established in 1988 to promote the flow of private foreign investment to developing member countries. In pursuit of this goal, the Investment Marketing Services (IMS) of MIGA provides advice and technical expertise to developing member countries on attracting foreign investment. IMS also seeks to open the doors to international business opportunities for foreign and developing countries' investors by sponsoring investment conferences and other promotional services. In addition, MIGA offers foreign investors insurance against several types of political risks. 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The latest edition is available free of charge from the Distribution Unit, Office of the Publisher, The World Bank, 1818 H Street, N.W., Washington, D.C. 20433, U.S.A., or from Publications, The World Bank, 66, avenue d'Ilna, 75116 Paris, France. Library of Congress Cataloging-in-Publication Data Implementing deregulation and promoting foreign direct investment in Africa: a report on six workshops = Les politiques de dereglementation et de promotion des investissements directs etrangers en Afrique : un compte rendu de six ateliers / Heinz Bachmann p. cm. - (IMS research paper series) English and French ISBN 0-8213-3626-6 1. Investments, Foreign-Africa-Congresses. 2. Deregulation- Africa-Congresses. I. Bachmann, Heinz B., 1933- . II. World Bank. HI. Series. HG5822.146 1996 96-16978 332.6'73226-dc2O CIP * 111 - TABLE OF CONTENTS/ TABLE DE MATIERES Foreword ............................... v Avant-propos ............................... vii Abstract ............................... ix Resume des debats et recommandations ............................... 1 Summary Discussions and Recommendations ............................... 15 1. ZIMBABWE: Workshop on Deregulation Implementation .27 Atelier sur l'Execution des Politiques de Dereglementation (Rsum6) .35 List of Participants .37 Questionnaire .39 2. TANZANIA: Workshop on Deregulation Implementation .40 Atelier sur l'Execution des Politiques de Dereglementation (R esum) .46 List of Participants .48 Questionnaire .50 3. UGANDA: Workshop on Deregulation Implementation .51 Atelier sur l'Execution des Politiques de Dereglementation (R6sur) .57 List of Institutions Invited .59 Questionnaire .61 4. SENEGAL : Atelier sur la liberalisation et l'encouragement des investissements directs 6trangers .62 Workshop on Deregulation and Encouragement of Foreign Direct Investment (Summary) .73 Liste des Participants .75 Questionnaire .80 5. COTE D'IVOIRE : Atelier sur la liberalisation et l'encouragement des investissements directs trangers .81 Workshop on Deregulation and Encouragement of Foreign Direct Investment (Summary) .94 Liste des Participants .96 Questionnaire .98 6. BENIN : Atelier sur la liberalisation et I'encouragement des investissements directs trangers .99 Workshop on Deregulation and Encouragement of Foreign Direct Investment (Summary) .117 Liste des Participants .119 Questionnaire .121 -v - Foreword As part of its mandate to stimulate the flow of foreign direct investment (FDI) into its developing member countries, the Multilateral Investment Guarantee Agency (MIGA), agreed to organize a series of workshops on implementation of policies relevant to FDI flows into Africa. These workshops were designed as a follow-up to the Roundtable Conference on Foreign Direct Investment Policies in Africa that MIGA had organized in Gaborone in June 1992. At that Roundtable, which had focused on policy formulation, as distinct from policy implementation, several participating African ministers complained about the unresponsive bureaucracies in their countries and their hidden or open opposition to policy measures designed to decontrol and open up the economy. This less than enthusiastic response by civil servants was considered a major impediment to a more rapid growth of FDI flows into Africa. In the logic of these arguments, several of the Ministers asked MIGA to follow up on the Gaborone Roundtable with a workshop on policy implementation, discussing with high level civil servants, problems and issues related to implementing policy changes on the working level and to the vital role civil servants have to play in making their countries more attractive to foreign investors. To honor these requests, MIGA joined forces with the Foreign Investment Advisory Service (FIAS), at the time a joint facility of IFC, MIGA and the World Bank, and together the two entities organized six such workshops during 1993 and 1994 in (in chronological order) Zimbabwe, Tanzania, Uganda, Senegal, Cote d'Ivoire, and Benin. Similar to the approach used successfully in Gaborone, the workshops brought together high level civil servants and private sector representatives from the countries concerned, with a few high level civil servants from developing countries that had been particularly successful in attracting FDI and who were willing to share their experience with their peers in Africa. Such participants came from Indonesia, Mauritius, Morocco, Pakistan, Tunisia, and Turkey. FIAS and MIGA appreciate the time and effort they dedicated to this endeavor; their participation greatly helped to make these events a genuine South-South dialogue. MIGA and FIAS extend their gratitude also to the many organizations that, through their support, made these workshops possible. A number of contributors to the Gaborone Roundtable graciously agreed to have unused funds reallocated to these follow-up activities, in particular the Governments of Denmark, Sweden, Switzerland and the United Kingdom, as well as the Islamic Development Bank. In addition, the Government of France and UNDP helped in the financing of some of these workshops. Last but not least, Government departments and investment promotion agencies in the countries concerned have actively participated in the preparation and organization of these workshops and in several instances have provided much appreciated meeting facilities. The Investment Marketing Services (IMS) department of MIGA is pleased to publish the proceedings as the third in its Research Paper Series. In mid-1994, the department changed its name from Policy Advisory Services (PAS) to IMS to reflect its sharpened focus on providing technical assistance in country marketing. The first report was on Industrialized Countries' Polices Affecting Foreign Direct Investment in Developing Countries (September 1991); the second presented the proceedings of the Gaborone Roundtable (March 1994). In line with the changed focus of IMS' work, future publications in this series will focus more on institutional, management and strategic issues in the field of foreign investment promotion. -vi - While perusing the proceedings of the six workshops as published in this paper, it is important for the reader to be aware of two points. First, the opinions expressed here reflect the situation prevailing at the time the workshops took place and do not take into account any policy changes that might have been introduced since. Hence, some of the comments presented in this paper might no longer be valid. Second, recommendations and criticisms expressed in this paper reflect the opinions of the civil servants and private investors participating in the workshops and are not necessarily shared by MIGA and FIAS, whose role was limited to organizing and moderating the debates without imposing their own views. Involvement of six different countries and of a large number of active discussants has slowed down publication of these proceedings to some extent. While during this delay the situation might have changed in some countries in some respect, most of the issues addressed in this paper and the solutions proposed by the participants are as relevant today to African policy implementors as they were at the time the workshops had actually taken place. Martin Hartigan Administrator Investment Marketing Services - Vii - Avant-propos Conform6ment A son mandat de stimuler et de faciliter les investissements directs etrangers (IDE) dans les pays en developpement, I'Agence Multilaterale de Garantie des Investissements (MIGA) a accepte d'organiser dans plusieurs pays africains des ateliers concernant la mise en oeuvre des politiques de dereglementation et d'encouragement des IDE. Ces ateliers ont e concus comme un suivi A la Table ronde sur les politiques d'investissements directs etrangers en Afrique que MIGA avait tenue a Gaborone en juin 1992. Au cours de cette Table ronde, ot l'accent avait ete mis sur la formulation de nouvelles politiques economiques plutot que sur leur application pratique, plusieurs des ministres africains se sont plaints que les fonctionnaires de leurs pays etaient reticents A suivre les nouvelles directives politiques et s'opposaient plus ou moins ouvertement A l'introduction de mesures de liberalisation et d'ouverture economique. Cette attitude negative de la fonction publique a ete consideree comme un obstacle serieux contre une augmentation plus rapide des flux d'IDE envers les pays africains. Dans la logique de cet argument, plusieurs des ministres avaient demande par la suite que MIGA organise des reunions complementaires mettant l'accent sur l'ex&cution rapide et efficace des nouvelles directives politiques en discutant avec des hauts cadres de l'administration les problemes poses par l'application pratique de ces changements par la fonction publique et le role vital joue par les fonctionnaires au niveau des efforts requis pour ameliorer le climat de l'investissement. Pour mieux repondre A ces demandes, MIGA s'est associee avec le Service consultatif pour les investissements etrangers (FIAS) qui etait alors un service conjoint de la SFI, MIGA et la Banque mondiale pour organiser six ateliers sur ce theme sur la periode 1993-1994 dans les pays suivants: (par ordre chronologique) Zimbabwe, Tanzanie, Ouganda, Senegal, CMte d'lvoire et Benin. Utilisant la formule qui avait si bien reussi A la Table ronde de Gaborone, ces ateliers ont rassemble autour d'une meme table des hauts fonctionnaires et representants du secteur prive des pays concernes avec quelques hauts fonctionnaires de pays en developpement ayant reussi a attirer des flux importants d'IDE et qui etaient prets A faire part de leur experience A leurs homologues africains. Ont assiste A ces ateliers des hauts cadres de l'administration indonesienne, marocaine, mauricienne, pakistanaise, et tunisienne, ainsi qu'un avocat turc. Leurs efforts ont et beaucoup apprecies et leur participation enthousiaste et active dans les debats a abouti A un dialogue Sud-Sud extremement positif et fructueux. MIGA et FIAS souhaitent remercier aussi les nombreux bailleurs de fonds dont le soutien a 6te vital pour assurer le succes de ces ateliers. Plusieurs sources de financement qui avaient soutenu la Table ronde de Gaborone ont donne leur accord pour reaffecter les reliquats de fonds A ces activites complementaires, en particulier les gouvernements anglais, danois, suedois et suisse, ainsi que la Banque Islamique de Developpement. Le Gouvernement francais et le PNUD ont finance une partie importante des coats de l'atelier de Dakar. Finalement, les gouvernements concernes ainsi que les agences de promotion des investissements ont particip6 activement A la preparation et l'organisation des divers ateliers et plusieurs d'entre eux ont mis des salles de conferences bien equipees A la disposition de MIGA/FIAS. Le Service de promotion des investissements (IMS), un departement specialise de MIGA, est heureux de presenter les comptes rendus des six ateliers dans sa collection "Research Paper Series". A la mi-1994, le departement a change son nom de "Services d'analyse et de conseils" (PAS) A IMS en accord avec la reorientation de ses activites vers l'assistance technique en matiere de promotion des - viii - investissements priv6s 6trangers. Le premier rapport publie dans cette collection en septembre 1991 etait intitul6 "Industrialized Countries' Policies Affecting Foreign Direct Investment in Developing Countries"; la deuxieme publication, sortie en mars 1994, presentait les comptes rendus de la Table ronde de Gaborone. En accord avec le changement recent dans les activites de l'IMS, les futures publications dans cette collection mettront I'accent sur l'application et mise en oeuvre plus rapide de nouvelles mesures economiques ainsi que sur une promotion plus efficace des investissements directs etrangers. En entamant la lecture des six comptes-rendus, le lecteur devrait etre conscient de deux faits importants: premierement, les opinions exprimes en cette publication refletent la situation pr6dominante dans les six pays a la date de l'organisation de ces ateliers, et ne tiennent guere compte des changements 6ventuels dans la politique economique intervenus entre temps. En consequence, une partie des commentaires faits au cours des discussions risquent de ne plus correpondre a la situation actuelle. Deuxiemement, les recommandations et critiques presentes dans cette publication refletent les opinions des hauts fonctionnaires et investisseurs prives ayant particip6 aux ateliers et ne sont pas partag6s n6cessairement par MIGA et FIAS dont les representants se sont bornes d'organiser et de diriger les debats sans imposer leur propre point de vue. La participation de six pays differents et d'une multitude d'interlocuteurs importants a retarde d'une certaine mesure la mise au point de ce rapport. S'il est incontestable qu'entre temps la situation s'est amelioree sur certains points en certains de ces pays, la plupart des problemes discutes et des recommendations avancees sont aussi pertinents aujourd'hui pour les dirigeants africains qu'ils l'etaient au moment ou les ateliers avaient lieu. Martin Hartigan Administrateur Service de promotion des investissements - ix - Abstract In 1993/94 MIGA and FIAS organized six workshops on deregulation implementation in Zimbabwe, Tanzania, Uganda, Senegal, Cote d'lvoire, and Benin. These workshops were off-shoots from the "Roundtable on Foreign Direct Investment Policies in Africa" that MIGA had organized on an Africa-wide basis in Gaborone, in 1992. At that Roundtable a number of African ministers pointed out that their countries had made considerable progress in deregulating economic policies and making them more private sector oriented, but that actual implementation was lagging behind as a result of hidden or open resistance by the civil service. This impacted negatively on private investors and made them react more slowly to the improving investment climate than expected. In the logic of this argument, MIGA was asked to organize a number of follow-up Roundtables focussing on policy implementation concerning private investment and to discuss possible improvements as a means to increase the inflow of foreign direct investment (FDI). As in the case of the Gaborone Round Table, this objective was to be achieved through bringing together around one table a number of high level civil servants with representatives from the private sector (domestic as well as foreign) and with a number of high level civil servants from developing countries that had a successful experience in attracting FDI. There were no prepared presentations at these two-day workshops devoted entirely to discussion with the participants from MIGA and FIAS moderating the debates. The opinions expressed and summarized here are not necessarily in agreement with MIGA's and FIAS's position on the issues but reflect the positions taken by the high level civil servants and private sector executives participating in the workshops. The reader should also be aware that the debates recorded here reflect the situation prevailing at the time the workshops were held and do not take into account changes in government policies and procedures that might have been introduced since. As a matter of fact, several of the workshop countries have made substantial changes over the last years broadly in line with workshop recommendations, such as the streamlining of investment application and approval procedures introduced in Zimbabwe, and improvements in customs' procedures introduced in Uganda. In addition to the ten specific issues discussed, as summarized below, two general points emerged during the debates: behavior of the governments themselves (as distinct from the civil service) and civil service mentality and attitude. While readily accepting part of the blame for slow policy implementation, many participating civil servants strongly co-blamed their superiors for these delays. Lack of leadership and internal cohesion seem to prevent many governments from providing clear and coherent instructions to their civil service and to clearly spell out their position vis-a-vis private investment; often governments implement their own rules and regulations in a haphazard way, creating uncertainty among civil servants as well as private entrepreneurs; different ministries issue different regulations on the same subject, with the private investor caught in the middle. These shortcomings at the political level are compounded by the strong anti-private sector mentality prevailing in the civil service, particularly in Francophone Africa. Civil servants in these countries have long been suspicious of private entrepreneurs, suspecting them of tax cheating, smuggling and monopolizing the economy. This antagonistic attitude is changing only very slowly. As a consequence, instead of receiving VIP treatment, as in the case of Mauritius or Morocco, foreign investors are considered more like adversaries whose every step has to be monitored carefully. What is urgently needed is a determined effort by governments to change this negative attitude, strongly and visibly supported at the highest political level. x Concerning the investment approval process, two issues were debated: (i) in countries with well established investment authorities (IA), the main problem is lack of authority by these bodies, i.e., decisions taken and permits issued often are not respected by the ministries concerned; and (ii) in countries without lAs the process tends to be slow, cumbersome and painful, taking many times longer than in competitor countries such as Morocco and Tunisia. The solution is either the creation of actual one-stop investment authorities with real authority over all public administrations, or a major streamlining of the existing investment approval process. Access to land (particularly agricultural land) is a major problem in all six countries. In anglophone East Africa, lack of clarity, transparency and consistency in the present system explains much of the frustration expressed by private investors. In francophone West Africa, the traditional land holding system, based on village chiefs, creates complications and delays. In most of the six countries there is a serious shortage of developed industrial land, caused by a lack of infrastructure (access roads, electricity, etc.), related services (surveyors) as well as by antiquated and cumbersome administrative structures (cadastral system, etc.). Domestic financing of investment projects is seriously hampered by a lack of long term credit as the few not nationalized private banks are mostly deposit banks that shun long term lending, while most of the public development banks have collapsed and been liquidated over the past decade. There is urgent need to attract more private banks and to reestablish investment banks on a private basis. Tax administration could be facilitated considerably through the introduction of a one-stop system where each tax payer deals with only one civil servant for all of his/her taxes and/or through abolishing the myriad of minor taxes that complicate the taxpayer's life. To become competitive with other developing countries, tax rates have to be reduced, and the tax base enlarged by finding ways and means to gradually tax the informal sector. Providing entry visas and work permits for expatriate staff is a cumbersome process that makes little sense, as foreign investors for their own advantage have every interest to minimize the number of costly expatriates. For this reason, countries like Indonesia have abolished all such controls. The rigid and haphazard way price controls are administered in Senegal was criticized. In the other five countries, such controls have largely disappeard. Unsatisfactory customs and port operations were one of the major complaints by private investors in all six countries but Zimbabwe. Nowhere else is the control/police oriented, anti-private sector attitude of the civil service more obvious than in custom services, which, in many countries, seem to have developed a life of their own, escaping largely the control of their superiors. Vexations and slow custom procedures, combined with extremely inefficient and cumbersome port operations create unacceptably long delays in the clearance of import and export goods at local ports, a strong disincentive against more private investment. Clearly, governments need to improve this situation if they want to become competitive in attracting more FDI. Import and export operations are further hampered by rigid foreign trade formalities, such as import and export licenses, which often serve little apparent purpose. Finally, importers and exporters (and this means virtually all foreign investors) suffer from foreign exchange controls and formalities, particularly in the three anglophone countries that have their own national currencies. Lack of clarity and transparency makes the systems so unpredictable as to preclude any long-term planning. This is off-putting to a potential investor who hates nothing more than uncertainty. -xi. The legal and judicial systems were considered major problem areas, particularly in the three francophone countries, where the legal system was judged to be outdated and ill-suited to deal with the modern business world, while the judicial system suffers from lack of judges experienced in corporate law and other economic issues. Court proceedings were considered excessively slow, and court decisions unpredictable and arbitrary. What is urgently needed is stronger recognition by the political leadership of the vital importance foreign investors attach to a well functioning legal and judicial system. R6sume des d6bats et recommandations I. Introduction En juin 1993, MIGA et FIAS ont tenu trois ateliers sur les progres de la d6reglementation en Afrique de l'Est anglophone, avec la cooperation du Zimbabwe Investment Center, de la Bank of Tanzania et de l'Uganda Investment Authority. Un an apres, FIAS et MIGA ont organis6 trois ateliers semblables sur la d6reglementation et la promotion des investissements directs etrangers (IDE) dans trois pays francophones de l'Afrique de l'Ouest en collaboration avec le Ministere senegalais de l'Economie, des Finances et du Plan, la Direction de la promotion industrielle et commerciale du Ministere ivoirien de l'Industrie et du Commerce et le Ministere beninois de l'Industrie et des Petites et Moyennes Entreprises. Sur invitation seulement ont particip6 a ces six ateliers de 30 a 100 hauts fonctionnaires et cadres sup6rieurs du secteur priv6 (nationaux et 6trangers) du pays en cause, deux ou trois hauts fonctionnaires de pays en d6veloppement reputes avoir su avec succes attirer des investissements directs etrangers et un nombre similaire de repr6sentants de MIGA et de FIAS. Ces six ateliers faisaient suite a la 'Table ronde sur les politiques d'investissements directs 6trangers en Afrique" tenue par MIGA pour les pays africains a Gaborone (Botswana) vers le milieu de 1992. A cette occasion, plusieurs ministres avaient note que leurs pays avaient fait des progres dans la reorientation de leurs politiques economiques vers le secteur priv6, mais que la mise en oeuvre de ces d6cisions progressait trop lentement. A leur avis, les fonctionnaires ne suivaient les directives gouvernementales qu'avec beaucoup d'h6sitation et de retard, ce qui faisait mauvaise impression sur les investisseurs prives, de sorte qu'ils reagissaient plus lentement que prevu a l'amelioration du climat de l'investissement. Dans la logique de cette conclusion, FIAS et MIGA avaient ett invit6s a organiser des ateliers complementaires dans plusieurs pays africains, axes non sur la formulation de politiques dans le domaine de l'investissement prive-national aussi bien qu'6tranger-mais sur leur mise en oeuvre par la fonction publique. Pour atteindre cet objectif, on devait appliquer la formule qui avait si bien reussi a la Table ronde de Gaborone, c'est-a-dire rassembler autour d'une meme table divers hauts fonctionnaires charg6s des questions relatives a l'investissement prive (industrie et commerce, petites et moyennes entreprises, fiscalit6, douanes, immigration, main-d'oeuvre, Banque centrale, ports, electricite, etc.) et representants du secteur prive (national et etranger), afin d'examiner les possibilites d'appliquer les mesures de dereglementation plus rapidement et plus efficacement et d'instaurer une cooperation plus constructive entre un secteur prive et une administration publique qui, par le passe, avaient souvent ete en desaccord. Ce dialogue devait beneficier de la presence de hauts fonctionnaires de pays en developpement ayant bien reussi a attirer des IDE pour qu'ils puissent faire part de leur exp6rience a leurs partenaires africains, en leur indiquant les pieges a eviter et les succes a copier. La presence de representants de pays ayant un bilan positif dans ce domaine et leur participation active aux debats ont ete l'un des aspects les plus interessants de ces ateliers, qui se sont ainsi distingues des nombreux autres seminaires et debats tenus sur le meme sujet dans ces pays. Ces ateliers, d'une duree de deux jours ont ete consacres entierement I des debats et n'ont donne lieu I aucun expose formel. Au prealable, FIAS/MIGA, avec l'aide d'un bureau d'etudes - 2 - local, avaient effectue un sondage rapide parmi les investisseurs prives, en leur demandant quelles etaient, dans l'application de la politique de dereglementation, les insuffisances les plus serieuses qui les decourageaient d'investir. D'apres les resultats de cette enquete, une dizaine de themes avaient ete retenues pour discussion et les consultants pri6s de r6diger de brefs exposes sur ces sujet A titre d'information pour les participants. Les representants de MIGA et de FIAS se sont content6s de diriger les d6bats, sans influencer leurs contenus. Les opinions exprimes au cours des debats et resumes ici ne correspondent donc pas necessairement a la position de MIGA/FIAS, mais refletent exclusivement l'opinion des hauts fonctionnaires et investisseurs prives participant aux ateliers. L'objet principal de ces ateliers, comme indique ci-dessus, etait d'examiner les am6liorations possibles dans la mise en oeuvre par les administrations publiques des d6cisions gouvernementales concernant la politique economique. Cependant certaines questions qui n'entraient pas tout a fait dans ce cadre ont ete abordees. En effet, dans de nombreux cas, il existe une zone grise entre la formulation des politiques et leur application. De plus, souvent, les ministres et autres leaders politiques participent non seulement a la d6finition des politiques, mais aussi, et de fagon tres directe, a leur application; cette fonction d'executant leur a d'ailleurs valu de s6veres critiques de la part de certains participants. Le lecteur est invite a ne pas perdre de vue que les opinions exprimees pendant ces debats concernent la situation existant dans les six pays au moment des ateliers et ne refletent donc pas les modifications qui ont pu intervenir depuis. En fait, plusieurs des six pays participants ont introduit, depuis un an ou deux, de profonds changements qui vont dans le sens des recommandations des ateliers, comme l'importante simplification de la procedure d'agr6ment des investissements a laquelle a procede le Zimbabwe, ainsi que l'amelioration des procedures douanieres en Ouganda. La pr6sente section resume les debats et recommandations par theme plutot que par pays, mais un bref resume de la discussion sur chaque pays figure (suivant la langue) au debut ou a la fin de chacun des six chapitres concernes. La presente section commence par l'expos6 de deux questions generales relatives au comportement et a I'attitude des gouvernements et des administrations publiques, avant d'aborder une dizaine de problemes plus particuliers. II. Resume des d6bats et recommandations 1. Attitude et comportement des hommes politiques Les ateliers avaient pour objectif principal de d6battre des ameliorations possibles au niveau de la fonction publique, mais les participants ont cite de nombreux cas of les problemes de mise en oeuvre de la politique economique ont tenu au gouvernement, c'est-a-dire aux ministres et autres decideurs de haut niveau. Ces critiques sont venues principalement de fonctionnaires, et rarement de repr6sentants du secteur priv6. Tout en acceptant leur part de responsabilit6 dans l'application d6ficiente des nouvelles directives et en reconnaissant la necessite d'ameliorations majeures dans leurs relations avec le secteur prive, de nombreux fonctionnaires ont aussi severement critique leurs superieurs. C'est dans le cas du Benin que ces critiques ont 6te le plus generales, le gouvernement se voyant reprocher son manque de leadership et d'esprit d'&quipe, et de ne pas avoir donne d'instructions claires et coherentes a la fonction publique, qui avait donc beaucoup de mal a ameliorer l'application des politiques relatives aux activites du secteur priv6. Au Senegal, le - 3 - gouvernement a ete critique pour ses m6thodes souvent cavalieres et la facon impr6visible dont il appliquait et respectait ses propres lois et reglements, une situation attribuee au manque de s6rieux de la conduite des affaires publiques. Les participants ont cite des cas o(i des entreprises privees avaient ete prises dans le feu crois6 de ministeres concurrents, et, de l'avis general, le climat d'incertitude et le manque de previsibilit6 engendres par de tels comportements avaient de quoi d6courager les investisseurs etrangers. Une absence de previsibilit6 d'une nature plus fondamentale a atd mentionnee comme un obstacle s6rieux a 1'accroissement des IDE au Zimbabwe, les participants estimant que le gouvemement devait d'urgence clarifier sa position vis-a-vis de l'investissement priv6 - national autant qu'etranger - et des activites du secteur prive en general, notamment quant aux limites qu'il souhaitait continuer a leur imposer. ll a aussi ete demande au gouvernement de rendre sa position plus transparente. L'absence de renseignements precis, coherents et convaincants sur les reorientations recentes de la politique en faveur du secteur prive att6nuait fortement l'incidence stimulatrice que ces mesures pouvaient avoir sur l'investissement priv6. Cette lacune d'informations claires et transparentes a et mentionnee a la plupart des six ateliers; manifestement, les gouvernements promouvoient fort mal leurs nouvelles politiques. Ces critiques de l'attitude et du comportement des gouvernements ont vise en particulier leurs rapports avec les Agences de promotion de l'investissement (API) de creation recente, notamment en Afrique de I'Est (aucun office de ce genre ne fonctionne encore reellement en Afrique de l'Ouest francophone, bien que certains soient a I'etat de projet). Ces agences semblent fonctionner relativement bien, dans la mesure oa elles delivrent sans tarder autorisations d'investir et incitations a l'investissement, mais leur action n'a souvent qu'une valeur pratique limitee parce que les ministeres refusent d'etre lies par leurs decisions, tout en siegeant a leur conseil de direction. Par exemple, meme si un investisseur obtient d'une API le droit d'importer en franchise des materiaux et des biens d'equipement, il n'a pas automatiquement la possibilite reelle de le faire puisqu'il lui faut aussi une autorisation officielle des douanes. De meme, le fait d'avoir obtenu d'une API le droit de faire venir un certain nombre d'employes etrangers ne dispense pas un investisseur d'obtenir des visas et des permis de travail des services de l'immigration pour chacune des personnes concernees, et ainsi de suite. Beaucoup de participants ont considere ces lacunes comme des obstacles reduisant fortement l'attrait et l'utilite que pourrait avoir pour les investisseurs etrangers l'existence d'un guichet unique; en fait, dans de pareilles conditions, la creation d'un tel service pourrait avoir l'effet contraire au but recherche, puisqu'elle ajouterait une couche de bureaucratie supplementaire au processus de l'investissement, plutot que de le simplifier et de F'accelerer. II est donc urgent d'accroitre le pouvoir de decision des API en transferant reellement a leurs conseils de direction celui que detiennent les ministeres. Comme tous les ministeres concernes siegent a ces conseils, cette proposition ne reduirait en aucune fagon leur pouvoir de dEcision, mais les obligerait simplement a l'exercer de fagon conjointe dans le cadre d'un plus vaste organisme, plutot qu'individuellement et au coup par coup. L'adoption d'une telle procedure exigerait une decision au plus haut niveau de I'Etat. 2. Mentalite et attitude de la fonction publique Le deuxieme point d'ordre general constamment souleve pendant les debats, en particulier en Afrique de l'Ouest francophone, concerne I'attitude negative de la fonction publique envers le secteur prive, attitude qui est consideree comme un des obstacles les plus serieux a I'amelioration du climat de l'investissement. De longue date, et bien avant l'independance, les fonctionnaires de ces pays se sont montres extremement meflants, sinon hostiles, vis-a-vis les entrepreneurs prives, les soupconnant de pratiquer la fraude fiscale, la contrebande et le monopole, et de chercher plus a s'enrichir rapidement en exploitant les richesses naturelles du pays qu'a contribuer a sa croissance economique a long terme. Ils estimaient donc necessaire de soumettre les activites du secteur priv6 a un controle strict et a outrance. A croire les opinions exprimes par beaucoup de participants, cette attitude negative ne change que lentement. Elle commence des l'aeroport oZi les conditions d'arriv6e, notamment les formalites policieres et douanieres, sont les plus dissuasives, pouvant inciter les investisseurs a faire demi-tour immediatement et a rentrer chez eux par le premier avion (ou a se rendre dans un pays plus accueillant, par exemple, I'lle Maurice ou le Maroc, ot ils peuvent compter etre recus comme des hotes de marque). On retrouve la meme attitude dans tous les rapports entre les investisseurs et les administrations, la plupart des fonctionnaires ayant beaucoup de mal a accepter un futur investisseur comme un partenaire dispose a travailler au developpement du pays, et qui I'aidera a accelerer la croissance economique, a gonfler les recettes publiques, a cr6er des emplois et a augmenter les recettes d'exportation. 11 est vital pour les pays africains de changer radicalement cette attitude s'ils veulent devenir une destination interessant les investisseurs etrangers. Un facteur essentiel expliquant pourquoi l'Ile Maurice a reussi a attirer un volume si important d'IDE malgre sa petitesse et sa situation geographique defavorable est le changement d'attitude rapide et positif de sa fonction publique, qui a a la fois la volonte et le desir d'accueillir les investisseurs etrangers comme des partenaires de choix meritant d'etre traites avec courtoisie et respect. Les participants aux ateliers ont gen6ralement reconnu que les fonctionnaires se devaient de repenser totalement leur role dans le processus de developpement et de changer radicalement de mentalit6 afin de ne plus etre des controleurs et des policiers, mais des intermediaires utiles dont la principale fonction serait d'aider les investisseurs prives dans leur tache souvent difficile et non de dresser obstacle apres obstacle sur leur parcours. Le participant de l'Ile Maurice a tres bien decrit cette attitude nouvelle en soulignant que, lorsqu'ils examinent une demande d'investissement, les fonctionnaires de son pays se rendent parfaitement compte que toute journee gagnee au cours du processus d'approbation accelere d'autant la mise en oeuvre d'un projet d'investissement et avance la date a laquelle l'Ile Maurice pourra creer de nouveaux emplois et accroitre a la fois ses recettes en devises et ses recettes fiscales. Cette attitude est malheureusement peu repandue parmi les douaniers responsables du dedouanement d'un chargement de biens d'equipement destines a la realisation d'un nouvel investissement! Les participants se sont parfaitement rendu compte qu'un tel changement d'attitude, si essentiel flt-il, ne serait ni facile ni rapide. Comme le montre l'exemple d'un grand nombre de pays en developpement, il exigera un effort resolu et constant du gouvernement et de toute la classe politique. Au Maroc, par exemple, sa Majest6 le Roi est intervenu personnellement pour signifier au gouvernement et a la fonction publique le nouveau role et l'importance des investissements prives dans le developpement du pays et la fonction qu'il s'attendait a les voir accomplir dans ce nouveau contexte. De meme, a I'lle Maurice, le Premier Ministre a participe activement et directement a une campagne de publicite visant a informer la population des avantages d'une augmentation des investissements priv6s et de ses effets positifs sur le niveau de vie g6n6ral. Une partie de cette campagne visait directement la fonction publique et insistait sur le changement d'attitude attendu d'elle. II y a un besoin 6vident et pressant d'entreprendre de telles campagnes dans de nombreux pays africains. -5 - Un changement d'attitude radical de la part des fonctionnaires vis-a-vis de l'investissement priv6 contribuera tres largement a lever les obstacles particuliers aux IDE qui ont e mentionnes pendant les ateliers et dont l'examen est repris ci-dessous. Bien que beaucoup d'entre eux soient peut-etre dus A IV'incompetence du personnel et a une mauvaise organisation, les participants etaient unanimes que tous pourraient etre 6limines bien plus facilement dans un climat de cooperation positive entre fonction publique et secteur prive. 3. Formalites administratives pour P'agr6ment des investissements Les participants ont formule deux sortes de critiques a ce sujet: dans les pays avec une API qui fonctionnait bien, le principal probleme etait que ces agences n'avaient pas de v6ritable pouvoir de decision. Comme indique ci-dessus, il en resultait notamment que les d6cisions prises, les autorisations d6livr6es et les avantages accord6s par ces agences etaient souvent d'une importance pratique limit6e pour l'investisseur. Dans les pays francophones de l'Afrique de l'Ouest qui n'ont pas encore d'API, le principal probleme 6tait la lenteur du processus d'agrement, consider6 comme trop complique et trop coClteux par les investisseurs. II a ete explique qu'en Cote d'Ivoire, par exemple, il fallait au moins une annee entiere entre le depot de la demande et la mise en oeuvre effective d'un projet d'investissement a Abidjan (et bien plus longtemps encore pour les investissements dans l'arriere-pays): un minimum de cinq mois pour obtenir le permis d'investissement, trois mois pour l'approbation des mesures d'incitation, et encore quatre mois pour trouver le terrain necessaire et obtenir le permis de construire. Dans les cinq autres pays, on a mentionne des situations analogues. Dans les pays concurrents tels que le Maroc, l'Ile Maurice ou la Tunisie, toutefois, ces formalites etaient accomplies bien plus rapidement, ce qui leur donnait un avantage competitif considerable dans la lutte pour attirer des investisseurs etrangers. Comme indiqu6 ci-dessus, un changement de mentalite chez les fonctionnaires, dans un sens constructif, plus favorable au secteur priv6, contribuerait considerablement a ameliorer cette situation. Les participants a l'atelier du Benin ont fortement appuye la notion de guichet unique ayant 1'entiere responsabilite de tous les domaines importants pour un investisseur priv6. Etant donne l'exemple du Maroc et de la Turquie, deux pays qui ont largement reussi sans avoir cree de guichet unique, les participants a l'atelier de Cote d'Ivoire ont exprime des opinions divergentes sur les avantages que pouvait avoir une telle demarche, comparee a la creation, comme cela s'est fait au Maroc, d'un service decentralise impliquant la delegation claire et nette du pouvoir de decision du niveau politique a celui de l'administration. II a aussi ete recommand6 d'instituer un systeme d'autorisations tacites, prevoyant qu'en l'absence d'un refus formel dans un delai determin6, deux mois par exemple, la demande d'investissement soit consider6e comme agree, l'investisseur etant alors libre d'entamer l'execution de ses plans. Enfin, dans de nombreux cas, le processus pourrait etre considerablement abr6ge si l'on permettait a l'investisseur de s'engager dans plusieurs voies a la fois, par exemple, en constituant sa nouvelle soci&e, en sollicitant l'attribution d'un terrain industriel et en demandant un permis de construire, tout en accomplissant simultan6ment les formalit6s d'approbation de l'investissement. Ces possibilites m6ritent d'etre attentivement etudiees. -6 - Les incitations fiscales speciales qui pourraient etre accordees pendant le processus d'approbation sont 6tudiees dans la Section 6 ci-dessous, et les questions liees a la disponibilite de terrains et a la propriete fonciere font l'objet de la prochaine section. 4. Propriete fonciere Dans les six pays consideres, a 1'exception du Senegal, les problemes fonciers ont ete consideres comme l'un des obstacles les plus serieux a l'investissement prive. Ces problemes se posent sous differentes formes, mais ceux qui decouragent le plus les investisseurs sont les difficultes que posent l'accds aux terres agricoles et la disponibilite de terrains industriels et de bureaux amenages et viabilises. De plus, le manque de Ilgislation fonci6re moderne (titres fonciers) amene souvent les banques a refuser une terre comme garantie, ce qui limite fortement l'acces des investisseurs au credit bancaire. Plusieurs participants ont mentione que pour des raisons politiques et historiques, la possession ou la location a long terme de terres agricoles par des etrangers etait une question delicate en Afrique de lEst et fait l'objet de serieuses restrictions dans de nombreux pays: cela rend ces economies moins competitives vis-a-vis de pays comme l'Indonesie, oC les etrangers peuvent louer des terres agricoles pour une duree allant jusqu'a 99 ans suivant les recommendations formulees par FIAS il y a quelque temps. Sans contester le bien-fonde de la dEcision politique fondamentale d'exclure les etrangers de la propriete de terres agricoles, les ateliers ont critique le manque de clarte, de transparence et de coherence des dispositions actuelles, qui tantot permettent aux investisseurs d'acceder aux terres, tantot le leur refusent. Cela explique dans une large mesure la frustration des investisseurs etrangers potentiels. Les participants ont recommande que ce regime de decisions au coup par coup soit abandonne en faveur de regles claires appliquees de maniere coherente. En ce qui concerne le cas precis de l'Ouganda, un certain assouplissement des restrictions actuelles a ete recommande, avec au minimum l'autorisation pour les entreprises de posseder des terres lorsque c'est le partenaire national qui les fournit. En Afrique de l'Ouest francophone, les restrictions imposees par les autorites sont un probleme beaucoup moins nuisible. A l'avis des participants, les principaux obstacles auxquels se heurtent les investisseurs etrangers sont dus a la complexite des regimes fonciers traditionnels qui perdurent de facto dans ces pays en dehors des zones urbaines. Ces regimes attribuent la plupart des pouvoirs de decision aux conseils et aux chefs de village (chefs des terres), ce qui rend le processus d'acquisition de terres tres lent, complique et imprevisible, en particulier pour un investisseur etranger sans experience, l'une des raisons et non la moins importante etant que les lignes de demarcation entre villages sont souvent imprecises et fortement contestees (notamment dans le cas de terres auxquelles un investisseur etranger pourrait s'interesser). La generalisation des methodes modernes de leve et d'enregistrement des terres rurales, comme cela est projete dans de nombreux pays africains, resoudra a la longue certains de ces problemes. L'acquisition de terrains industriels pour la realisation d'un nouveau projet d'investissement paraft etre tout aussi difficile, longue et decourageante, bien que pour des raisons differentes. La plupart des six pays participant a ces ateliers souffrent d'une grave penurie de terrains industriels amenages, parce qu'ils manquent de ressources financieres pour developper l'infrastructure aussi vite que l'exigerait l'accroissement de la demande. Les routes d'acces sont rares et des delais de plusieurs mois sont la regle lorsqu'on veut etre raccorde aux reseaux de l'electricite, de l'eau et du telephone. En consequence, I'attente pour un investisseur etranger n'est pas terminee meme quand - 7,- il a fini par obtenir son permis de construire. Dans certains pays comme la Tanzanie, les services publics responsables de l'attribution des parcelles et de la d6livrance des titres fonciers sont devenus un goulet d'etranglement majeur faute de personnel et de mat6riel, tandis que le manque de geometres limite le nombre de terrains que l'on peut mettre A la disposition de nouveaux occupants. Enfin, I'absence d'un marche immobilier bien organis6 entrave souvent les investisseurs dans leur recherche d'un terrain approprie. A l'avis des participants, les pays devraient chercher beaucoup plus activement A attenuer les problemes fonciers et consacrer A cet effort des ressources plus importantes, financieres autant qu'humaines pour avoir de reelles chances d'attirer de nouveaux investissements etrangers. De plus gros investissements dans l' infrastructure des transports et dans le d6veloppement des reseaux d'eau, d'6lectricite, etc., autour des grands centres urbains porteraient rapidement leurs fruits si le climat general de l'investissement etait simultanement amelior6. Enfin, I'am6lioration du cadastre et de la d6livrance de titres fonciers, recommandee ci- dessus, resoudrait en large partie le probleme des banques qui refusent d'accepter des terres comme garantie d'emprunt A long terme. Aujourd'hui, dans la plupart des six pays, les titres fonciers, si tant est qu'il en existe, sont si imprecis et si contestables que l'on peut difficilement reprocher aux banques leur attitude de prudence. Cette situation ne changera qu'une fois que le cadastre aura 6te correctement etabli et accept6. De pareilles ameliorations contribueraient consid6rablement A attenuer le probleme du financement de l'investissement aborde ci-dessous. 5. Financement des projets d'investissement Le financement des projets d'investissement sur ressources interieures a ete considere comme un probleme important dans de nombreux pays africains et un obstacle serieux A de nouveaux investissements prives. Dans tous les six pays organisateurs d'ateliers, A l'exception du S6n6gal, les difficultes posees par la mobilisation de fonds a long terme dans le pays hote ont ete signalees par les investisseurs prives comme un de leurs problemes les plus serieux. Bien que cela soit naturellement plus vrai encore des chefs d'entreprise locaux, meme les investisseurs etrangers souhaitent financer une partie de leur projet en empruntant sur place pour r6duire le risque de change et sont davantage portes A investir dans un pays dote d'une infrastructure bancaire efficace qui leur permette de le faire a un coat et A des conditions raisonnables. Ce n'est pas le cas actuellement de la majorite des six pays consideres. Les participants 6taient convaincus que ces difficultds sont dues A des deficiences majeures des systemes bancaires apparues au fur et a mesure du developpement-- ou plutot de la deterioration --de ces systemes au cours des 10 A 20 dernieres annees. Dans plusieurs des pays consideres, les banques ont ete nationalisees dans les annees 70 et 80 et les nouvelles banques publiques n'ont pas fonctionn6 comme elles l'auraient dO. Les services se sont degrades, les retards se sont allonges, tandis que le nombre des prets irrecouvrables augmentait rapidement, limitant ainsi la capacite de pret de ces banques. En outre, la plupart de ces banques etaient A l'origine des banques de depot que leurs preferences et la nature de leurs ressources financieres incitaient A privilegier le credit A court terme et A limiter au maximum le credit A long terme. Pour combler cette lacune et repondre a la demande croissante de ressources longues, la plupart des Etats africains ont cree des banques de developpement sous une forme ou une autre. Pour diverses raisons, presque toutes ces institutions publiques ont echoue et la plupart ont dO etre liquidees au cours des dernieres annees, ce qui a retire aux entreprises privees une importante source de - 8 - financement a long terme juste au moment oa les gouvernements avaient fini par leur donner le feu vert pour commencer a investir a grande echelle. Les representants des PME et du secteur informel ont evoqu6 ce probleme avec plus d'urgence. Les participants aux ateliers ont formul6 trois recommandations principales dont l'importance varie d'un pays a l'autre: d'abord, reformer et assainir le secteur bancaire public, la oi il existe encore, afin qu'il puisse jouer son role correctement, en eliminant en particulier les prets non productifs; ensuite, permettre la creation de nouvelles banques privees, notamment etrangeres, afin d'exposer a la concurrence les banques publiques existantes; enfin, creer de nouvelles institutions de financement a long terme, en particulier des banques de developpement. Devant le bilan negatif des dernieres ann6es, les ateliers ont recommande que ces banques restent entre les mains et sous la direction du secteur prive. Le cas de l'Indonesie et du Pakistan a montre que la reforme et la decentralisation du systeme bancaire etaient d'importants elements de toute strategie gouvernementale pour attirer davantage d'IDE. La seule autre question importante concernant le secteur bancaire a ete soulevee par des investisseurs prives au Zimbabwe, qui se sont plaints que l'application de politiques monetaires restrictives, conjuguee a des deficits budgetaires assez considerables, avait fini par evincer les emprunteurs prives. Des politiques macroeconomiques et budgetaires stables sont la seule solution satisfaisante et durable a ce probleme. 6. Fiscalite Comme on pouvait s'y attendre, les chefs d'entreprise du secteur prive se sont plaints amerement de la lourdeur de l'imposition des societ6s dans les six pays organisateurs d'ateliers. Deux questions ont particulierement retenu l'attention des participants: i) L'assiette fiscale etant petite, le nombre limite de contribuables qui paient des impots sont lourdement imposes, y compris la plupart des entreprises du secteur moderne. II faut donc elargir cette assiette, en trouvant, entre autres, le moyen d'imposer le secteur informel. Les participants ont toutefois estime dans ]'ensemble qu'il fallait le faire graduellement de maniere a ne pas porter atteinte a ce secteur, etant donne son role capital de pourvoyeur d'emplois. ii) Compares A ceux d'autres pays, les impots sur les societes etaient consideres comme particulierement eleves pour les industries d'exportation qui, dans de nombreux pays en developpement, beneficient de genereuses incitations fiscales (taux nul au Maroc, taux forfaitaire de 15 % a l'Ile Maurice, etc.), ce qui n'est pas le cas des six pays organisateurs d'ateliers. S'ils veulent etre competitifs, les pays africains ne pourront plus refuser longtemps des concessions fiscales analogues. Ce commentaire s'insere dans une critique plus generale, selon laquelle ces pays determinent leur politique fiscale en attachant une importance excessive au seul but d'obtenir des recettes budgetaires plut6t que d'en faire un elment de leurs politiques globales de developpement. En ce qui concerne l'administration de l'impot, le manque de transparence et d'informations claires et aisement accessibles a souvent ete critique par les chefs d'entreprise. C'est une d6ficience que les gouvernements peuvent eliminer assez rapidement et A peu de frais. La simplification et la rationalisation du systeme fiscal grace a I'abolition d'une pl6thore de petits impots faciliteraient beaucoup l'information. Enfin, la creation d'un guichet unique au sein de l'administration fiscale representerait une am6lioration consid6rable pour les entreprises privees, comme le montre 1'exemple de la Cote d'Ivoire, qui a recemment adopte un systeme od les chefs d'entreprise n'ont affaire qu'a un seul bureau du fisc pour tous leurs impots et non a dix services differents responsables d'une dizaine d'impots differents. Conjugue a un changement d'attitude de la part de la fonction publique, 6voqu6 ci-dessus, cette disposition rendrait la tache bien plus facile aux investisseurs prives et contribuerait largement A ameliorer le climat de l'investissement. Enfin, le manque de pouvoir de d6cision des API paralt etre particulierement frequent dans le domaine fiscal. En effet, les investisseurs se heurtent souvent a une situation otd le ministere des finances s'efforce de percevoir un imp6t alors meme qu'une exoneration avait ete accordee par l'API, ce qui donne lieu a des tractations et n6gociations prolongees. Le fait d'acquerir une telle reputation est un handicap majeur pour un pays qui cherche A attirer des IDE. La mise en place, comme I'a fait l'Ouganda, d'un systeme transparent et coh6rent de gestion de la fiscalite a ete consideree comme un bon moyen de resoudre ce probleme. 7. Permis de travail pour les 6trangers et march6 du travail La delivrance de visas et de permis de travail aux investisseurs etrangers et A leur personnel est parfois tres longue et laborieuse. Les chefs d'entreprise du secteur prive ont contest6 la logique de ces reglements puisque les investisseurs 6trangers n'ont aucune raison d'amener avec eux un nombre excessif de personnes expatriees qui leur coCttent generalement beaucoup plus cher que le personnel local. Pour ces raisons, I'Indonesie a aboli toutes ses restrictions en matiere de main- d'oeuvre etrangere et le Pakistan a egalement liberalis6 son systeme. A certains des ateliers, il a 6t6 propose que les visas soient delivres aux investisseurs A leur arriv6e A l'a6roport avec un minimum de formalit6s. Si l'obligation pour un expatrie de detenir un permis de travail est maintenue, les API devraient etre habilitees a les delivrer sans que l'investisseur ait affaire aux services de l'immigration et de la main-d'oeuvre. Enfin, les permis devraient etre delivres pour des periodes assez longues et etre bien moins coOteux qu'ils ne le sont generalement aujourd'hui. Le Senegal est le seul des six pays oa des questions aient ete soulevees concernant le fonctionnement du marche int6rieur du travail. Les licenciements sont encore difficiles et les tribunaux ont la reputation de donner syst6matiquement tort aux employeurs. En outre, des plaintes ont &t6 exprimees au sujet du faible nombre de journees de travail par an (165-200), compare A celui d'autres pays. 8. Reglementation des prix Le Senegal est le seul pays od les chefs d'entreprise du secteur prive ont considere la reglementation des prix comme un probleme majeur. Sans entrer dans la logique sous-jacente et les avantages de ces dispositions, les investisseurs ont souligne que la gestion du systeme souffrait beaucoup des effets des deux facteurs negatifs generaux mentionnes ci-dessus, A savoir l'application assez cavaliere des dispositions legislatives et r6glementaires par les autorit6s publiques, et I'attitude negative de la fonction publique envers le secteur prive. Ces deux facteurs reunis font que le systeme est tres imprevisible, dirigiste et hostile au secteur prive. Les - 10- participants ont critique l'abus de pouvoir constat6 souvant parmi les fonctionnaires ainsi que le manque de dialogue entre les deux parties, situation indubitablement peu attrayante du point de vue des investisseurs etrangers potentiels. 9. RWgeementation et formalites douanieres et portuaires Le fonctionnement des services douaniers et portuaires a donne lieu A la discussion la plus animee de tous les themes discutes dans les six ateliers, sauf pour le Zimbabwe, qui n'a pas de port maritime et ob les services douaniers ne sont pas consideres comme posant des problemes particuliers. Les participants du secteur prive ont considere le mauvais fonctionnement des services douaniers et portuaires comme l'un de leurs principaux problemes et une des desincitations les plus serieuses A de nouveaux investissements, tandis que les fonctionnaires ont parle du desaccord profond entre ces deux services publics qui, souvent, semblent travailler en contradiction plut6t qu'en cooperation. Bien qu'il s'agisse formellement de deux services publics totalement distincts, les importateurs et les exportateurs les ont consideres comme faisant partie d'un seul et meme probleme, et ont donc generalement parle simultanement de l'un et de I'autre. Trois conclusions generales se sont degagees. Premierement, le bon fonctionnement des services douaniers et portuaires est d'une importance cle pour les chefs d'entreprise du secteur prive et constitue un critere majeur pour un investisseur qui doit decider du lieu d'implantation d'un nouveau projet. Les pays ont donc un interet vital A ameliorer la qualite de ces services. Deuxiemement, la volonte de controle, I'attitude policiere et 1'hostilite des fonctionnaires A I'egard du secteur prive ne sont nulle part plus accusees que dans les services douaniers qui, pour des raisons tout A fait legitimes, ont toujours considere la lutte contre la contrebande comme leur principale fonction; cela les amene souvent A exercer des contr6les excessivement lourds et rigides, en negligeant l'incidence negative que cela peut avoir sur le developpement du secteur prive. Troisiemement, il semble y avoir de graves lacunes dans l'autorite des ministres et des hauts fonctionnaires sur leurs agents douaniers, les directeurs generaux des douanes reconnaissant ouvertement qu'ils n'arrivent plus A contr6ler leurs agents aux frontieres et qu'ils ne peuvent plus leur faire confiance, de maniere qu'ils sont obliges de prendre toutes sortes de mesures improvisees pour contourner le probleme et en minimiser les degats. La question de I'attitude de la fonction publique, comme on l'a vu ci-dessus, est d'une importance capitale dans ce domaine. Cela ne veut pas dire que les douaniers n'ont pas de fonction de controle legitime et personne ne songe A contester ce role; personne n'ira dire non plus que les investisseurs prives sont dispenses de se conformer a la legislation et aux reglements douaniers, et que les fonctionnaires des douanes ne doivent pas en imposer le respect. A l'avis des participants, il existe toutefois de profondes differences entre les controles normaux, les controles abusifs, les tracasseries et la persecution et, si les premiers sont n6cessaires, les autres sont A eviter. C'est rarement le cas aujourd'hui. Les fonctionnaires des douanes doivent etre conscients de l'incidence negative de leur action sur les investisseurs et, par voie de consequence, sur le developpement general de leur pays. Efficacite, diligence, courtoisie et integrite sont les quatre maitres mots A cet egard. Les consequences de cette absence de motivation et de I'attitude negative des agents de douane ont ete considerees d'autant plus serieuses que, souvent, ces agents sont mal tenus en main par leurs superieurs. Pour s'attaquer a ces problemes, les autorites douanieres ont pris, ou se proposent de prendre, des mesures qui risquent d'entraver la conduite normale des affaires, - 11 - d'entratner des retards et d'alourdir les coOts de fonctionnement. Les trois exemples les plus frappants dont on a debattu au cours des ateliers ont ete les suivants: i) Toutes les importations entrant en Ouganda doivent etre dedouanees obligatoirement au siege central de l'administration fiscales a Kampala, ce qui oblige les importateurs A transporter les marchandises jusqu'a la capitale avant de pouvoir les expedier vers leur destination finale. Pour les entreprises situees loin de Kampala, il en resulte de substantiels coats et delais supplementaires. La raison de cet arrangement est le manque d'agents douaniers experimentes auxquels le directeur des douanes puisse faire confiance et qui soient capables de dedouaner correctement les importations a la frontiere. ii) Actuellement, toutes les exportations par la route de produits manufactures au Senegal doivent etre accompagnees par un fonctionnaire des douanes sur tout le trajet interieur du lieu de production jusqu'a la frontiere, avec des controles intermediaires frequents pour s'assurer qu'aucune partie du chargement n'a ete vendue illegalement au Senegal. 11 semblerait que cela soit le seul moyen de verifier la quantite de marchandises effectivement exportee et pour laquelle les fabricants peuvent demander le remboursement des droits de douane payes sur les facteurs de production importes. C'est aussi une formalite tres coateuse pour l'exportateur qui doit supporter les frais de ce service special. Manifestement, cela decourage les industries d'exportation. iii) En Cote d'lvoire, le systeme de l'admission temporaire paralt etre si desorganise que les autorites douanieres envisagent serieusement de I'abolir entierement. D'importantes quantites de produits manufactures locaux, officiellement declares comme exportes, semblent etre ecoulees sur le marche int6rieur, ce qui n'empeche pas les entreprises de se faire rembourser les droits avec des certificats d'exportation falsifies delivres par des douaniers malhonnetes a la frontiere. La modification envisagee de cette politique risquerait de porter gravement prejudice a la competitivite des exportations ivoiriennes sur le marche mondial et serait en contradiction avec l'objectif declare du gouvernement d'encourager les investissements d' exportation. Ces mesures defensives ne sont pas considerees comme la bonne reponse aux problemes et ne contribuent pas a rendre un pays plus attirant pour les investisseurs etrangers. Les gouvemements doivent reprendre en main leurs services douaniers et les rendre efficaces, integres et fiables. 11 faudra peut-etre pour cela conjuguer une formation amelioree, un meilleur equipement, de meilleures remunerations, une supervision plus stricte et des sanctions plus severes en cas de fraude ou de corruption. L'application de telles mesures contribuerait a rendre les services douaniers plus diligents et plus efficaces, necessite pressante dans la plupart des pays organisateurs d'ateliers. Au Benin, il faut souvent jusqu'A deux mois pour sortir une marchandise du port et des douanes. En Ouganda, un delai de cinq a six semaines est considere comme normal et les autres pays ne font guere mieux. La situation est clairement inacceptable comparee, par exemple, a celle du port de Banjul (Gambie) ot les importations sont dedouanees generalement en 24 heures. La creation d'un guichet unique oti importateurs et exportateurs pourraient accomplir en une seule fois toutes les - 12 - formalites portuaires et douanieres et effectuer tous les paiements requis a ete proposee comme moyen de r6duire les delais. De plus longues heures d'ouverture des services douaniers et portuaires- notamment le week-end --contribueraient aussi a ameliorer la situation, tout comme l'informatisation des services. Des services douaniers plus rapides rendraient la vie plus facile aux autorit6s portuaires qui se plaignent que les marchandises importees restent entreposees trop longtemps dans les ports en attendant leur dedouanement. La majeure partie des participants etaient de l'avis que les autorites portuaires etaient elles- memes partiellement responsables de ces delais et le fonctionnement des ports souffre tout autant que celui des douanes d'une absence de motivation du personnel, d'un manque de controles et supervision, et de la corruption. La mentalite et l'attitude du personnel refletent la position de monopole dont estiment jouir les ports, consid6rant que leurs clients n'ont pas de solutions de rechange. Si, pour la plupart des entreprises existantes, cela est effectivement le cas, il n'en va pas de meme pour les nouveaux investisseurs qui ont souvent tout une gamme d'autres options si le port en un pays donne ne fonctionne pas a leur satisfaction, un facteur important dont il faudrait attirer l'attention des autorites portuaires et de leur personnel. Si leur comportement continue de se caract6riser par l'absence de cooperation et par l'esprit de monopole, cela risque d'avoir une incidence negative sur le climat de l'investissement dans leur pays. 10. Formalites d'importation et d'exportation Un fonctionnement efficace des services portuaires et douaniers n'est pas le seul moyen de faciliter les operations d'importation et d'exportation des entreprises privees. 11 y a encore beaucoup a faire pour rationaliser les formalites du commerce exterieur. Deux possibilites ont ete 6tudiees: reduire le nombre de ces formalites et faciliter I'accomplissement de celles qui seront m2intenues. Au Zimbabwe, par exemple, quatre services differents s'occupent de la delivrance des licences d'importation aux nouveaux investisseurs: le Centre d'investissement, le Ministere de l'industrie et du commerce, le Ministere des finances et la Banque centrale. La majorite des participants a ete convaincu qu'il n'y a pas de raison pour les deux derniers d'intervenir dans les decisions, ce qui reduirait sensiblement les delais administratifs. En Tanzanie, les licences d'importation n'ont pratiquement plus de raison d'etre et pourraient etre abolies sans pour autant renoncer a tout controle. Le facteur cle pour un importateur est d'obtenir une lettre de credit. De meme, les licences d'exportation ne jouent aucun role utile et le controle des exportations devrait etre aboli, sauf peut-etre dans le cas d'une courte liste de produits ecologiquement importants. Pareils controles decouragent manifestement les nouveaux investisseurs. En Cote d'Ivoire, les importateurs doivent obtenir deux licences: l'une leur conferant le statut d'importateur, I'autre pour importer effectivement une certaine marchandise; la logique de ce double controle n'est pas claire. Afin de stimuler les exportations non traditionnelles, l'lndonesie a etabli un service unique pour les societes exportatrices, qui s'occupe de tout ce qui concerne leurs importations en franchise, les problemes du remboursement des droits de douane, les licences d' exportation, etc. Cette institution s'est revelee tres utile et mtriterait d'etre prise comme modele en Afrique. Une autre innovation qui a donne de bons resultats en Indonesie a ete la decision de permettre aux nouvelles entreprises a vocation exportatrice d'importer des machines et des materiels d'occasion, souvent mieux adaptes aux conditions locales que des biens d'equipement neufs, ultramodernes, - 13 - sans mentionner les economies dans le coft de production qui en resultent. De nombreux pays africains ne permettent pas de telles importations parce qu'ils estiment, a tort, qu'ils vont se retrouver avec de la ferraille inutilisable. Les investisseurs prives, toutefois, savent mieux que quiconque quelles machines acheter (avec leurs propres ressources, notez bien) et installer pour fonctionner dans les meilleures conditions d'efficacit&-codit; les participants etaient d'accord que les gouvernements devraient rester a I'ecart de ce type de decision. 11. R6glementation et formalites en matiere de change Dans les trois pays de l'Afrique de I'Est participant aux ateliers, les difficultes que pose I'accbs aux devises, et son imprevisibilite, restent une grave preoccupation pour les entreprises priv6es, malgr6 les ameliorations considerables realisees depuis le debut des annees 90. En revanche, dans les trois pays de l'Afrique de l'Ouest qui sont membres de la zone CFA, cela ne pose pas beaucoup de problemes et il est vraisemblable que les quelques difficultes apparues depuis la devaluation de janvier 1994 seront passageres. Pour le Zimbabwe et la Tanzanie, les principales critiques des entrepreneurs prives ont porte sur le manque de transparence, de renseignements precis et de regles publiees, ce qui rend le systeme impr6visible pour les chefs d'entreprise et empeche toute planification a long terme. Les decisions sont souvent prises au coup par coup et sont rarement expliqu6es aux parties concernees. II y a Ia de quoi effrayer d'eventuels investisseurs, pour qui l'incertitude est l'un des problemes les plus insupportables et les plus inhibiteurs. Quant a l'Ouganda, les critiques ont ete plus moderees, portant sur un certain nombre de points techniques, comme l'interdiction du transfert des dividendes a I'etranger tant que les prets des banques ougandaises n'ont pas ete rembourses entierement et l'interdiction d'ouvrir des comptes en devises aupres de banques nationales en Ouganda. 12. Systeme legal et juridique L.es deficiences du systeme legal et juridique ont ete considerees comme un probleme majeur par les participants du secteur prive et comme un des principaux facteurs decourageant les entreprises etrangeres d'investir dans les trois pays ouest-africains participant aux ateliers. Ces problemes n'ont pas ete juges tres importants dans les pays de l'Afrique de l'Est. De 1'avis general, les systemes juridiques dans les pays francophones-- du moins en matiere economique-- etaient anciens, largement depasses et inadaptes aux realites actuelles. Un grand nombre de textes dataient encore de 1'epoque coloniale, certains n'ayant pas et6 modifies depuis le siecle dernier. La situation est aggrav6e par les insuffisances marquees du systeme juridique charge de l'application de ces textes. Les procedures devant les tribunaux sont extremement longues, quatre ou cinq ans etant consideres comme un delai normal pour regler une affaire simple. Les decisions des tribunaux manquent de transparence et d'uniformite et sont tout a fait imprevisibles, introduisant un grave element d'arbitraire dans l'ensemble du systeme. Cela explique le serieux manque de confiance dans le systeme judiciaire exprim6 par les representants du secteur prive. Les raisons invoquees pour expliquer ces deficiences comprennent une grave penurie de juges, qui sont surcharges de travail et ne sont pas en mesure de consacrer suffisamment de temps - 14 - a chaque affaire qui leur est soumise. Les juges exp6riment6s font tout particulierement defaut dans le domaine du droit des societes et autres sujets economiques. En outre, le systeme juridique semble trop fortement centralise, I'arriere-pays 6tant encore moins bien loti que la capitale. 11 manque une formation a tous les niveaux, en particulier concernant les greffiers et secretaires, ainsi que le materiel de bureau le plus elementaire. Pour les memes raisons, I'application des jugements rendus par les tribunaux semble etre un processus long et incertain, notamment pour le recouvrement des creances et les procedures de faillite. Dans le cas du Senegal, ce probleme general du manque de stabilite et de previsibilite est aggrav6 par l'application souvent cavaliere des lois et des reglements par les administrations publiques, probleme deja mentionne ci-dessus. Ce qu'il faut d'urgence, c'est que les instances politiques a tous les niveaux reconnaissent l'importance capitale attachee par les investisseurs 6trangers 6ventuels au bon fonctionnement du systeme legal et juridique. A plusieurs reprises les representants du secteur prive ont attire I'attention des participants au fait que rien n'effraie davantage les investisseurs etrangers que l'imprecision, I'arbitraire et limprevisibilite dans les administrations publiques, depuis les fonctionnaires de l'immigration a l'aeroport jusqu'aux magistrats des instances superieures. Un des meilleurs moyens de combattre ces facteurs decourageants et de rendre un pays vraiment attirant pour les investisseurs etrangers est de refondre et de moderniser de haut en bas le systeme legal et juridique. Comme il s'agit clairement d'un travail de longue haleine, il faudrait s'y mettre le plus tot possible. Les ateliers ont recommande fortement que dans ce travail, les instances politiques cooperent etroitement avec le secteur prive afin d'assurer que les preoccupations legitimes des investisseurs prives soient prises en compte. Des mecanismes permanents a cet effet devraient etre crees la oi il n'en existe pas deja. L'instauration d'une telle cooperation est un facteur important de toute programme d'action gouvernementale visant a rendre le pays plus attrayant pour les investisseurs prives, etrangers aussi bien que nationaux. - 15 - Summary Discussions and Recommendations I. Introduction In June 1993 MIGA and FIAS organized three workshops on deregulation implementation in English-speaking East Africa, in cooperation with the Zimbabwe Investment Center, the Bank of Tanzania, and the Uganda Investment Authority. A year later, FIAS and MIGA participated in the organization of three similar "ateliers" on deregulation and encouragement of foreign direct investment in three French-speaking countries in West Africa, in cooperation with the Ministry of Economy, Finance and Planning of Senegal, the Directorate of Industrial and Commercial Promotion in the Ministry of Industry and Commerce in Cote d'Ivoire, and the Ministry of Industry and Small and Medium Enterprises in Benin. Participation in all six events was by invitation only. Participants included between thirty and one hundred high level civil servants and executives from private companies (domestic and foreign) from the country concerned; two to three high level civil servants from developing countries that had been particularly successful in attracting large amounts of foreign direct investment (FDI) over the last years; and a similar number of staff from MIGA and FIAS. The six workshops were off-shoots from the "Roundtable on Foreign Direct Investment Policies in Africa" that MIGA had organized on an Africa-wide basis in Gaborone, Botswana, in mid- 1992. At that Roundtable a number of African ministers had pointed out that their countries had made considerable progress in improving economic policies and making them more private sector oriented, but that actual implementation of these new policies was lagging behind. In their opinion, civil servants have been following their political leadership with considerable delay. This impacted negatively on private investors and made them react more slowly to the improving investment climate than expected. In the logic of this argument, FIAS and MIGA were asked to organize a number of follow-up Roundtables in a number of African countries focussing not on policy formulation, but on policy implementation concerning private investment--domestic as well as foreign--and to discuss possible improvements in policy implementation as a means to increase the inflow of FDI. This objective was to be achieved using the same approach as had been used successfully at the Gaborone Roundtable, e.g., through bringing together around one table a number of key high level civil servants concerned with private investment issues (industry and commerce, small and medium enterprises, taxation, customs, immigration, labor, Central Bank, port and electricity authorities, etc.) with representatives from the private sector (domestic as well as foreign) to discuss ways and means of implementing deregulation measures more rapidly and more effectively, and to strengthen constructive cooperation between the private sector and public administration, which traditionally have often been at loggerheads. This dialogue was to profit from the presence of high level civil servants from developing countries that had a successful experience in attracting FDI, and were willing to share this with their peers in Africa; pitfalls to be avoided, successes to be copied. The presence of successful- country participants and their active involvement in the discussions was a particularly attractive feature of these workshops and distinguished them from the many other seminars and discussions on the subject at hand, ongoing in these countries. There were no prepared speeches or presentations at these two-day workshops devoted entirely to discussion. In preparation, FIAS/MIGA, through a local consultant service, had carried out a - 16- limited opinion poll among private investors, asking them about the most serious shortcomings in policy implementation discouraging private investment. Based on its results, up to ten key issues were selected for discussion at the workshop and the consultants were asked to prepare short papers on these issues as background information for the participants. The participants from MIGA and FIAS moderated the debates without influencing the content. The opinions expressed during the debates and summarized here are not neccessarily in agreement with MIGA's and FIAS's position on the issues discussed but reflect the positions taken by the high level civil servants and private sector executives participating in the workshops. While, as mentioned above, the workshops were designed to focus on ways and means to improve policy implementation by the civil service, a number of issues were discussed that might not fit clearly into that category. This reflects the fact that in many instances there is a grey area between policy formulation and implementation; furthermore, ministers often are not only involved in policy formulation but also very directly in policy implementation, and in fact were heavily criticized by a number of workshop participants in this respect. The reader should also be aware that the debates recorded here reflect the situation prevailing in the six countries at the time the workshops were held and--for obvious reasons--do not take into account changes in government policies and procedures that might have been introduced since. As a matter of fact, several of the workshop countries have made major changes over the last one to two years broadly in line with workshop recommendations, such as the substantial streamlining of investment application and approval procedures introduced in Zimbabwe, as well as the considerable improvements in customs' procedures introduced in Uganda. The following summary of the workshop discussions and recommendations is organized by themes rather than by country, while a short summary of each country discussion is provided (in the two languages) at the beginning and end of each-of the six country sections. The summary starts off with a presentation of two general issues of government and civil service behavior and attitude before discussing ten specific problem areas. II. Summary of Discussions and Recommendations 1. Government Attitude and Behavior While the workshops/"ateliers" were designed primarily to discuss possible improvements on the level of the civil service, aimed at enhancing the investment climate for foreign entrepreneurs, in the course of the discussions, many instances were revealed where policy implementation was hampered at the government level, i.e. at the level of ministers and other high level policy makers. Such criticisms were made mostly by civil servants, seldom by private sector participants. Fully accepting their share of the blame concerning the unsatisfactory implementation of new policy directives and acknowledging the need for major improvements in the way they deal with the private sector, many participating civil servants strongly co-blamed their superiors for these shortcomings. Criticism was the most general in the case of Benin, where Government was criticized for its inaction, lack of leadership and lack of cohesion, preventing the formulation of clear and coherent instructions to the civil service; this made it difficult for civil servants to improve policy implementation, concerning private sector activities. In Senegal, the Government was criticized for its often cavalier modus operandi and unpredictable way of applying and respecting its own laws and regulations, reflecting a lack of seriousness in the way it conducts its business, lack of internal cohesion and an - 17 - inclination to interministerial fights; there was general agreement among participants that the uncertainty and lack of predictability created by such behavior strongly discourages foreign investors. Lack of predictability of a more fundamental kind was mentioned as a serious impediment against higher inflows of FDI in Zimbabwe, where participants felt there was an urgent need for the Government to clarify its position vis-a-vis private investment--domestic as well as foreign--and vis-a- vis private sector activity in general, including the limits it wishes to maintain on such activities; furthermore, it has to make this position more transparent and better known to the public. Lack of clear, coherent and convincing information on recent policy changes in favor of private sector activities have strongly limited the positive impact of these measures on private investment. Lack of good, convincing information on recent policy changes was a criticism leveled at most of the six workshop- Governments that were considered to sell themselves and their new policies badly and inefficiently. A very specific criticism of government attitude and behavior concerned the Governments' relations with the recently created autonomous Investment Authorities (IA), particularly in East Africa (no authority of this kind is really operational yet in French-speaking West Africa, albeit some exist on paper). While these Investment Authorities seem to operate fairly smoothly, in as far as they issue investment permits and grant investment incentives fairly rapidly, the practical significance of their actions often remains limited in the sense that Government ministries refuse to be bound by the decisions of these Authorities, even though they are represented on their board. For instance, having been granted the right of duty free imports of materials and equipment by an IA does not automatically give an investor the possibility to import such goods duty free; in addition, a formal permit by the customs authorities is required to do so. Similarly, having been given the right by an IA to bring a number of expatriate staff into the country to work in the new investment does not dispense an investor from the obligation to request entry visas and work permits from Immigration for every person concerned; and so on. Many participants felt that these shortcomings strongly reduce the attractiveness and usefulness of a one-stop shop to foreign investors; in fact, under these conditions, creation of a one-stop shop might well become counterproductive, by adding another layer of bureaucracy to the investment process rather than streamlining and speeding up this process. Hence, there is a clear and urgent need to enhance the decision making power of the Investment Authorities and to bring about a real transfer of authority from the individual ministries to the IA boards. Since all the ministries concerned are represented on the boards, this proposal in no way takes decision making power away from them but simply requires these ministries to exercise their power jointly in the context of a larger body, rather than individually and piece meal. This requires a decision at the highest level of Government. 2. Civil Service Mentality and Attitude The second general point raised repeatedly during the discussions, particularly in French- speaking West Africa, concerned the anti-private sector mentality prevailing in the civil service that was considered to be one of the most serious obstacles to an improved investment climate. Traditionally, and long predating independence, civil servants in these countries have been very suspicious of, if not outright hostile towards private entrepreneurs, suspecting them of being tax cheats, smugglers and monopolists, more interested in growing rich quickly through exploiting the natural riches of a country than in contributing to its long term economic growth. For these reasons it was considered necessary to closely control and supervise the activities of the private sector at all times. As pointed out by many discussants, this antagonistic attitude is changing only very slowly. It starts already at the airport where arrival conditions often are rather dissuasive, including police and - 18 - customs formalities, tempting prospective foreign investors to turn around immediately and take the next plane home (or to go on to a more accommodating country where they can count on receiving VIP treatment, such as Mauritius or Morocco). It continues throughout most of the investor's dealings with the administration, with the majority of civil servants finding it very difficult to consider and accept a prospective investor as a partner in development, who will help the country to speed-up growth, expand government revenues, create employment and increase export earnings. A fundamental change in this negative attitude is vital for African countries to become truly attractive destinations for foreign investors. One of the main factors explaining Mauritius' success in attracting such large amounts of FDI in spite of its small size and unattractive location is the rapid and successful change of attitude in its civil service, which is willing and ready to receive foreign investors as highly appreciated partners who merit to be treated with courtesy and respect. There was general agreement at the workshops that civil servants need to reconsider thoroughly their role and function in the development process and to make a fundamental mental change from controllers and watchdogs to facilitators and developers who consider their main task to help and assist private investors in their often difficult undertakings rather than to putting road block after road block in their way. The participant from Mauritius best characterized this new attitude by pointing out that, when processing an investment request, the civil servants in his country were well aware that every day gained in shortening the application process would speed-up implementation of the investment project and would advance the date when more employment was created in Mauritius, more foreign exchange was earned and more taxes were received. Such reflections, unfortunately, are a world apart from the attitude taken by your average customs official when clearing through customs a tax free shipment of material and equipment needed to start up a new investment. Participants were fully aware that changing this negative attitude, as vital as it is, will not be an easy or speedy process. As indicated by the experience in many developing countries, it will require a determined and sustained effort by the Government and the entire political leadership. In Morocco, for instance, His Majesty the King personally gave very clear signals to the Government as well as the civil service, about the changing role and importance of private investment in the development of the country and what role he expected them to play in this changed environment. Similarly, in Mauritius, the Prime Minister was actively involved in the publicity campaign aimed at informing the population about the merits of increased private investment and the positive effects this will have on the standard of living for all. Part of this campaign was directed specifically at civil servants and the changing role expected from them. Clearly, similar campaigns are urgently needed in many African countries. A thorough, positive change in the attitude of civil servants vis-a-vis private investment will go a long way in solving many of the specific obstacles against FDI mentioned at the workshops and discussed below. While many of them might be caused primarily by incompetence and bad organization, there was general agreement at the workshops that all of them could be solved much more easily in an environment of positive and helpful attitude by the civil service. 3. Investment Approval Process Two kinds of criticism were levied concerning the investment approval process: in countries with well functioning Investment Authorities (IA) the main comments related to the lack of real - 19 - decision making power granted these IPAs. As discussed above, this means among others, that decisions taken, permits issued, and advantages granted by the IPAs often are of limited practical significance to the investor. In the French-speaking countries of West Africa, that have no operational IPAs, the main comments referred to the slowness of the application process, that is considered overly complicated and costly by investors. In Cote d'Ivoire, for instance, it seems to take at least a full year from the time of investment application to the beginning of actual project implementation for a project located in Abidjan, substantially longer for investments in the hinterland: a minimum of five months to receive the investment permit, three months to get investment incentives approved and another four months to find the necessary land and to get a construction permit. In the five other countries, similar situations were revealed. In competitor countries like Morocco, Mauritius, or Tunisia, however, these formalities can be fulfilled in a fraction of the time, giving these countries a strong competitive advantage in attracting foreign investors. As mentioned by many participants, changes in civil service mentality towards a more private sector-friendly, businesslike attitude, could go a long way towards improving this situation. In addition, the Benin workshop came out strongly in favor of creating a one-stop investment authority with full responsibility in all areas important to a private investor. Given the examples of Morocco and Turkey, two countries that are very successful without having created a one-stop shop, opinions were divided in Cote d'Ivoire about the advantages of establishing such an agency, as compared to the creation of a decentralized system with a clear delegation of power away from the political level to the civil servant level, similar to the Moroccan system. Other recommendations included a proposal to introduce a non-objection formula in the investment approval process, however structured, e.g., if an investment request is not formally rejected by the Government within, say, two months it is deemed accepted and the investor is free to go ahead with his plans. Finally, in many instances the process could be shortened considerably by allowing investors to pursue several things at the same time, such as constituting their new company, asking for the attribution of industrial land and requesting a building permit in parallel with going through the investment approval process. Such possibilities ought to be studied carefully. Special tax incentives that might be granted during the investment approval process are discussed in section six below, while issues of land access and ownership are discussed next. 4. Land Ownership Issues In five of the six workshop-countries (all except Senegal) land problems of one kind or another were considered among the most serious impediments against more private investment. Such problems can take different forms: most inhibiting are difficulties for investors to gain access to agricultural land, as well as to find adequately serviced industrial land and office space. In addition, vague land tenure laws often cause banks to refuse land as collateral, strongly limiting entrepreneurs' access to bank loans. As pointed out by numbers of participants, for political and historical reasons, foreign ownership or long-term leasing of agricultural land is a sensitive issue in East Africa and is severely limited in many countries. This, clearly puts these economies in a competitive disadvantage vis-a-vis countries like Indonesia, where foreigners are now able to lease agricultural land for up to 99 years, in line with a recommendation made by FIAS some time ago. While not questioning the fundamental political decision to exclude foreigners from owning agricultural land, the workshops criticized the - 20 - lack of clarity, transparency and consistency in the present system, which allows some investors access to land while denying it to others. This explains much of the frustration expressed by potential foreign investors. Workshop participants recommended that this system of ad-hoc decisions be abandoned and clear rules be applied consistently at all times. In the case of Uganda, a certain reduction in present restrictions was also recommended, as a minimum allowing joint ventures to own land in case the local partner contributes the land to the joint venture. In French-speaking West Africa, formal government restrictions are much less of an issue. The main problems faced by foreign investors in agriculture appears to be the intricacies of the traditional African land holding system, which de facto remains prevalent in these countries. This system assigns most decision making powers to the individual villages, village councils and village chiefs, making land acquisition a very slow, cumbersome and unpredictable process, particularly for an unexperienced foreign investor, not the least because borders between villages often are only vaguely delimitated and strongly contested (particularly for land in which a foreign investor might be interested). Extension of modern land surveys and land recordings into rural areas, as planned in many African countries, will eventually solve some of these problems. Acquiring industrial land to realize a new investment project was considered to be as difficult, time consuming and frustrating, albeit for different reasons. Most of the workshop-countries suffer from an acute shortage of developed industrial land, caused by a serious lack of financial resources to expand infrastructure necessary to cope with increasing demand. Access roads are scarce, and delays of several months are the rule for receiving new electricity, water and telephone connections. Hence, a foreign investor's waiting is not over, even once he has finally received his building permit. In some of the countries like Tanzania, public services dealing with plot allocations and the issuing of land titles have become major bottlenecks for lack of staff and equipment, while lack of public surveyors limits the amount of new land that becomes available every year for new occupancy. Finally, the lack of well-functioning real estate markets often hampers investors in their search for suitable land. In the opinion of many participants, much higher priority needs to be attached to easing the land problem, and more resources--financial as well as human--have to be devoted to this purpose for a country to become a really attractive location for new foreign investment. Larger investments in transport infrastructure and public utilities around major urban centers are likely to pay off rapidly, if the overall investment climate is improved at the same time. Finally, improving the cadastral system and the issuing of land titles, as recommended above, would go a long way towards solving the problem of banks refusing to accept land as collateral for long term loans. Today, in most of the six countries, land titles, if they exist at all, are so vague and open to dispute that banks can hardly be blamed for their cautious attitude. This is likely to change, once land records are well established and accepted. This could substantially ease the problem of investment financing as discussed below. 5. Financing of Investment Projects Domestic financing of investment projects was considered to be a major problem in many African countries and a serious impediment against new private investment. In all of the workshop- countries excluding Senegal, difficulties in mobilizing long-term funds in the host country were mentioned by private investors as one of their most serious problems. Obviously, this is true particularly for local entrepreneurs, but even foreign investors prefer to finance part of a new project -21 - through local borrowing, so as to contain the foreign exchange risk and are more inclined to invest in a country where a well functioning banking sector will allow them to do so at reasonable cost and on acceptable conditions. This is not the case in most of the six countries today. Many participants were convinced that these shortcomings reflect major weaknesses in the banking systems per se as these systems developed--or rather deteriorated-over the last one to two decades. In several of the workshop-countries banks were nationalized in the 1970s and 80s, and the new public banks have been performing badly; service deteriorated, delays became longer and longer while bad loans increased rapidly, narrowly limiting the lending capacity of these banks. Furthermore, traditionally most banks in these countries had been deposit banks which by inclination as well as by the nature of the financial resources at their disposal concentrated most of their activities on short-term lending and were reluctant to provide much long-term financing. To satisfy the increasing demand for long-term funds in their economies, most African governments created development banks of one kind or another. For a variety of reasons, nearly all of these publicly owned institutions failed, and most of them had to be liquidated over the last few years. This deprived the private sector of an important source of long-term financing at exactly the time governments finally gave private entrepreneurs the green light to start investing on a large scale. The representatives of SMEs and the informal sector complained the most about this shortcoming. Three main recommendations were formulated by the workshops with different foci in different countries: first, reform and rehabilitate the public banking sector, where it still exists, so as to allow these banks to perform their role properly, including getting rid of the overhang of non-performing loans; second, allow the creation of new private banks, including foreign ones, so as to put competitive pressure on the existing public banks; and last but not least, create new institutions of long-term lending, in particular development banks. Given the past negative experience, the workshops were unanimous that such banks had to be privately owned and privately managed. The experiences of both Indonesia and Pakistan have shown that banking reform and decentralization were important elements in any government strategy to attract more FDI. The only other major issue was raised by private investors in Zimbabwe, who complained that restrictive monetary policies at a time of rather large budget deficits led to a crowding out of private sector borrowers. Steady macro-economic and budget policies are the only satisfactory long-term answer to this problem. 6. Taxation Not unexpectedly, private entrepreneurs complained bitterly about the high company taxes prevailing in the six workshop-countries. Two issues emerged in particular: (i) the tax base being small, the limited number of taxpayers are highly taxed, including most modern sector enterprises. Hence, an expansion of the tax base is needed by, inter alia, finding ways and means to tax the informal sector. There was general agreement, however, that this had to be achieved gradually, so as not to hurt the informal sector in the process, given its crucial importance as a provider of employment; and (ii) in an international comparison, company taxes were considered particularly high for export industries that receive generous tax incentives in many developing countries - 22 - (Morocco zero taxes, Mauritius a flat 15%, etc.) but not in the six workshop-countries. To become competitive, African countries will not be able to avoid granting similar tax concessions. This issue was part of a general complaint that tax policy in these countries was conducted much too much with the single purpose of raising budget revenues rather than as part of a comprehensive development policy. Concerning tax management, lack of transparency and of clear, easily accessible information was an issue raised often by private entrepreneurs. This is a shortcoming that can be improved fairly quickly at limited costs to the governments. Simplifying and streamlining the tax system by abolishing the many minor taxes would much facilitate the information process. Last but not least, from the point of view of the private entrepreneurs, introduction of a one-stop system in tax administration would be a considerable improvement, as shown by the example of Cote d'Ivoire, where a system was introduced recently in which an entrepreneur needs to deal with only one tax official for all of his taxes and not with 10 different officials in charge of 10 different kinds of taxes. Together with the change in civil servants' attitude as discussed above, such an arrangement would make life much easier for a private investor and contribute considerably to improve the investment climate. Finally, lack of decision making power by Investment Authorities (IA) seems to be particularly frequent concerning tax incentives. As a result, investors often face a situation in which Ministry of Finance officials try to collect taxes even if a tax exemption had been granted by a IA, giving rise to protracted discussions and/or negotiations. Gaining this kind of reputation creates a major handicap for a country in attracting FDI. 7. Expatriate Work Permits, Labor Market Issuing entry visas and work permits to foreign investors and their staff can be a lengthy, burdensome process. Private entrepreneurs questioned the whole rationale behind these controls, given the fact that foreign investors have little incentive or reason to bring in an inordinate amount of expatriate staff which usually is much more expensive than local staff. For these reasons, Indonesia has abolished all labor limitations and Pakistan has decontrolled and liberalized its labor system. At some of the workshops, it was suggested that visas should be issued to investors upon arrival at the airport with a minimum of formalities. If the requirements for expatriate work permits is maintained at all, Investment Authorities should be given the authority to issue these with no need for the investor to deal with immigration and/or labor offices. Finally, work permits should be issued for extended periods and at much lower cost than is often the case today. Senegal was the only one of the six countries where issues were raised about the function of the domestic labor market. Dismissals are still difficult and judges have a reputation of ruling consistently against private employers. In addition, there were complaints about the low number of work days per year in an international comparison (165-200). 8. Price Controls Only in Senegal did private entrepreneurs mention price controls as a major issue. Without discussing the underlying rationale and merits of these controls, investors pointed out that management of the system suffered considerably from the effects of the two general negative factors mentioned above, viz. the often rather cavalier modus operandi of the Government and the negative attitude of the - 23 - civil service vis-a-vis the private sector. Together, they make the system very unpredictable, strongly control-oriented and anti-private sector biased. Participants complained about frequent abuses by civil servants and the limited dialogue between the two sides. Clearly, this is an unattractive feature from a prospective foreign investor's point of view. 9. Customs and Port Procedures and Administration The subject of customs and port services led to the most heated discussions of any issue raised at the six workshops, with the exception of Zimbabwe, which has no port and where customs services were not considered a serious problem. Not only did private sector participants consider the poor functioning of customs and port services as one of their major problem areas and as one of the most serious disincentives for new investments, there were also strong disagreements among these two public services, which often seem to operate more at cross purposes than in tandem with each other. While formally two quite distinct public services, from the points of view of importers and exporters, they are part and parcel of one and the same problem and, hence, were largely discussed together. Three general points emerged from these discussions. First, smooth and efficient functioning of customs and ports services is of great importance to private entrepreneurs and is a major criterion for an investor in deciding on the location of a new project. Hence, countries have a vital interest in improving the quality of these services. Second, nowhere else is the control/police oriented, anti- private sector attitude of the civil service more prevalent than in the customs services, which very legitimately have always considered prevention of smuggling as their main function resulting often in overly excessive and rigid controls, irrespective of the negative impact these may have on private sector development; and third, there appears to be a serious breakdown of control by governments and top level civil servants over their customs agents, with directors general of customs admitting openly that they can no longer trust and control their agents at the borders, and hence, have to design all kinds of measures to turn around this problem and minimize its negative consequences. The issue of civil servants' attitudes, as discussed before, is of vital importance here. That is not to say that customs agents have no legitimate control function; of course they do, and nobody would suggest that private investors need not respect customs laws and regulations and that customs agents should not enforce these. However, in the mind of most participants, there are substantial differences between controls, excessive controls, chicanery and persecution and while controls are definitely needed, the other three ought to be avoided; this is very often not the case today. Customs agents have to be made aware of the impact of their actions on investors' decisions, and hence on the overall development of their countries. Efficiency, speed, courtesy and absence of corruption are the four key considerations in this respect. The negative consequences of this lack of proper motivation and attitude at the working level were considered to be all the more severe given the widespread lack of control over the customs agents by their superiors. To cope with these problems, customs authorities have taken or are proposing measures that interfere negatively with the normal conduct of private business, create delays and increase costs. The three most striking examples discussed at the workshops were: (i) all imports into Uganda have to go through customs clearance at the Uganda Revenue Authority headquarters in Kampala, meaning all imported goods have to be transported first to Kampala before being dispatched to their point of final destination. For enterprises located far from Kampala, this creates substantial additional costs and - 24 - delays. The reason given was lack of experienced customs agents that can be trusted to clear imports directly at the border and the need to maintain tight controls at headquarters; (ii) presently, all exports by road of locally produced manufactured goods from Senegal to neighboring countries have to be accompanied by a senior customs agent all the way from the place of production to the border with frequent intermediate stops and controls to make sure that no part of the shipment is sold illegally within Senegal. This procedure seems to be the only sure way to establish the amount of goods that have in fact been exported and for which man:ifacturers can claim duty drawbacks. It is also a very expensive procedure for the exporter who has to pay for the cost of this special service. Clearly, this is a disincentive to establish export industries; and (iii) in Cote d'Ivoire, the duty draw-back system apears to be so completely out of control that the customs authorities are seriously considering abolishing it altogether. Large amounts of locally produced manufactured goods, officially declared as exported seem to be sold in the local market, with entrepreneurs still claiming the duty drawbacks based on falsified export certificates issued by dishonest customs agents at the border. The proposed policy change could considerably worsen the competitive position of Ivorian exports in the world market and is in contradiction with the stated objective of the Government to encourage more export-oriented foreign investments. These kinds of defensive measures were not considered to be the right answers to the problem and do not contribute to make a country more attractive to foreign investors. Governments need to regain control of their customs services and turn them into efficient, honest and reliable operations. This might require a combination of improved training, better equipment, better pay, stricter supervision and more severe consequences in case of fraud and bribe-taking. Implementing such measures would contribute considerably towards making customs services faster and more efficient; an urgent need in most of the workshop-countries. In Benin, it often takes up to two months to get imported goods out of port and customs; in Uganda 5-6 weeks are considered normal, and the other countries are not doing that much better. Clearly an unacceptable situation, compared to a port like Banjul where imports are cleared within 24 hours. Introduction of a one-step counter, where an importer or exporter can settle all port and customs formalities and payments in one step has been proposed as a means to reduce processing time. Longer working hours by customs and port officers, including weekend work would also help. Faster customs services would make life easier for the ports authorities who complain about import consignments being stored too long in the ports awaiting customs clearance. In the opinion of most participants, port authorities are at least partially to blame for these delays and their services are affected as much by lack of staff motivation, lax controls and corruption as are custom services. Staff mentality and attitude are typical of those of a monopolist who is convinced that his customers have no alternative. While this lack of alternatives might apply to most existing enterprises, it does not apply to prospective new investors who usually have the alternative of investing elsewhere if the port in a given country does not operate properly. Port authorities and their staff ought to be made aware of this important factor without delay. Uncooperative, monopolistic behavior on their part is likely to have a serious negative impact on the overall development and well- being of their countries. - 25 - 10. Import and Export Formalities Smooth and efficient functioning of port and customs services is not the only means to facilitate import and export operations by private enterprises; there is also much room to streamline foreign trade formalities. Two possibilities were discussed: reduce the number of these formalities and streamline the remaining ones. In Zimbabwe, for instance, four public services are involved in granting an import license to a new investor, the Zimbabwe Investment Center, the Ministry of Industry and Commerce, the Ministry of Finance and the Central Bank. There was general consensus that the last two need not be involved in the decision making process, reducing administrative delays considerably. In Tanzania, import licenses have become largely meaningless and could be abolished without giving up any controls. The key controlling factor for an importer is to get a letter of credit. Similarly, export licenses have no useful role and export controls ought to be abolished, with the possible exception of a short list of goods based on environmental considerations. Such controls clearly discourage new investment. In Cote d'Ivoire, importers need two licenses: one to be accepted as an importer, another to actually import a certain good; the rationale for this double control is not clear. In order to stimulate non-traditional exports, Indonesia has established a one-roof service for export companies, which handles all issues related to duty free imports by such companies, duty draw- back problems, export licenses, etc. This institutional set-up has been very helpful and merits to be copied in Africa. Another successful experience of Indonesia has been the decision to allow new export oriented enterprises to import second hand machinery and equipment which often is better adapted to local circumstances than new, ultramodern investment goods and results in lower production costs. Many African countries do not allow such imports on the false belief that they will get stuck with useless junk. Private investors, however, are much better judges of what machinery they should purchase and install (with their own money), so as to operate most cost-efficiently. Most participants believe that governments have very little to contribute to this decision-making process. i1. Foreign Exchange Controls and Formalities In the three East African workshop-countries, many investors complained about the lack of easy and predictable access to foreign exchange which remains a vexing problem for private enterprises in spite of considerable improvements achieved since the early 1990s. In the three West African workshop-countries that are all members of the CFA franc area, this is not a serious issue; problems arising in the aftermath of the January 1994 devaluation are likely to be temporary. In both Zimbabwe and Tanzania, the main criticism concerned the lack of transparency, of clear information and published rules, which make the system so unpredictable to private entrepreneurs and prevent any long-term planning; decisions are often taken on an ad hoc basis and are rarely explained to the parties concerned. This is very scary to potential investors, who hate nothing more than uncertainty. In Uganda, criticism was more limited, focussing on a number of technical points, such as the ban on transfer of dividends abroad, as long as local bank loans remain outstanding and the ban on opening foreign exchange accounts with local banks in Uganda. - 26 - 12. Legal and Judicial System Shortcomings in the legal and judicial systems were considered major problem areas by private sector participants and major factors in discouraging foreign enterprises to invest in the three West African workshop-countries. Such concerns were given little importance in the East African countries. There was general agreement at the workshops in the French-speaking countries that the legal systems--at least concerning business matters--were old, badly outdated, and ill-suited to deal with present realities. Many relevant texts date from colonial times, some unchanged since the last century. The situation is made worse by conceived serious shortcomings in the judicial system applying these texts. Court proceedings are excessively lengthy and slow, with 4-5 years considered normal to settle simple cases. Court decisions lack transparency and stability and are very unpredictable, introducing much arbitrariness into the whole process. This explains the serious lack of confidence in the judicial system expressed by the private sector. Reasons mentioned for these shortcomings include a serious lack of judges, who are over- burdened and over-worked and are not in a position to devote sufficient time to each case before them. This lack is particularly acute for judges experienced in company law and other economic issues. Furthermore, the judicial system seems overly centralized, with the hinterland even worse off than the capital. Training is lacking at all levels, particularly concerning law clerks and legal secretaries, and so is the most rudimentary office equipment. For the same reasons, implementation of court decisions appears to be a lengthy and uncertain process including debt recoveries and bankruptcy proceedings. In the case of Senegal, this overall problem of lack of stability and predictability is worsened by the often cavalier application of laws and regulations by the Government and public administration as mentioned earlier. What is urgently needed is a better recognition by the political leadership at all levels, of the vital importance prospective foreign investors attach to a well functioning legal and judicial system. As mentioned repeatedly by business executives, nothing scares serious foreign investors more than vagueness, arbitrariness and lack of precision in public administration behavior ranging from that of immigration officers at the airport to that of judges at the high court. A thorough overhaul and modernization of the legal and judicial systems is one of the most fundamental means to begin to overcome these discouraging factors and to make a country truly attractive to foreign investors. While this is a long-term effort, it ought to be started without delay. There was clear recognition at the workshops that in this endeavor, the political leadership should maintain close cooperation at all times with the private sector so as to ensure that legitimate concerns by private investors are addressed properly. Permanent mechanisms to this effect ought to be created where they do not exist already. Establishing such close cooperation is an important consideration in any government's effort to improve the attractiveness of its country to private investors, domestic as well as foreign. - 27 - 1. ZIMBABWE: Workshop on Deregulation Implementation I. Introduction On June 2-3, 1993, the Zimbabwe Investment Center together with FIAS and MIGA organized a workshop on deregulation implementation attended by about 30 representatives from the public and private sector in Zimbabwe, two high level civil servants from Indonesia and Pakistan, and four FIAS/MIGA staff members (list of participants attached). As mentioned by Mr. Nicholas Ncube in his opening remarks, this workshop was an offshoot from the "Roundtable on Foreign Direct Investment Policies in Africa," organized by MIGA in Gaborone, Botswana, in mid-1992. At that occasion, it became apparent that while many African countries had made considerable progress in improving economic policies and making them more attractive to the private sector, actual implementation of these policy changes was lagging behind. Delayed policy implementation impacted negatively on private investment in most African countries, and contributed to make such investment react more slowly to improving policies than expected. Hence, it was the objective of this workshop to review and analyze the issue of policy implementation in the field of private investment--domestic as well as foreign--and to discuss ways and means to speed up such implementation as a precondition to increased private investment in Zimbabwe. This objective was to be achieved through bringing together around one table, representatives from the private sector in Zimbabwe--domestic as well as foreign--with a number of high level civil servants concerned with private investment issues, so as to stimulate an exchange of view about how deregulation measures could be implemented more rapidly and more effectively. This dialogue was to profit from the presence of two high level civil servants from two developing countries that have been singularly successful in implementing economic deregulation and attracting large amounts of foreign direct investment. Their first hand experience in reducing administrative obstacles against more private investment inflows was considered highly relevant for Zimbabwe as well. In preparation for the workshop, MIGA/FIAS, through a local consultant service, carried out a limited opinion poll among private investors, asking for their opinion about the most serious impediments and disincentives against more foreign direct investment in Zimbabwe. Based on the result of that questionnaire, nine key issues were selected for discussion in the workshop, viz: - obtaining investment approval and permits, - obtaining work permits for expatriate personnel, - purchasing and leasing of land, - obtaining domestic financing for new projects, - obtaining import licenses, - obtaining foreign exchange, - obtaining export incentives, - custom procedures, and - taxation. The main conclusions and recommendations of the workshop are presented in Section II, while the detailed discussion of the nine issues is recorded in Section III. The list of participants, as well as the questionnaire, are presented at the end of that section (pages 37-39). - 28 - II. Summary Conclusions and Recommendations Transparency Possibly the most important conclusion emerging from the workshop is the need for the Government to make its positions vis-a-vis private investment--domestic as well as foreign--better known and to provide clearer, more transparent, and more comprehensive information about governmental policies in this regard. Better information about the extent and limit of private economic activities encouraged by the Government and about the processes and procedures presently applied by the public administration would reduce the frustrations and anxieties experienced by many private investors and in turn would considerably improve the country's investment climate. While it was generally acknowledged at the workshop that the Government has substantially liberalized and decontrolled the economy over the last years and made it more private sector friendly, much of the positive impact of these measures was lost through the prevailing lack of transparency and the absence of clear information concerning these changes. It is not sufficient to deal the private sector an improved deck of cards to achieve the desired stimulating effect on private investment; it is equally important to put these cards clearly and openly on the table. While promulgation of clear rules and procedures might take some decision making power away from the government bureaucracy, it is vital to restore private sector confidence and willingness to invest. Lack of transparency explains, at least to some extent, the slow response of private investors to the Government's policy changes of the last few years. The discussions at the workshop focused on four areas, where lack of transparency and of clear rules were particularly striking: i. investment approval. Publication of a detailed investment booklet spelling out existing rules and regulations could go a long way to solve the problem; 2. economic activities reserved for domestic entrepreneurs, and where foreign investment is not allowed--in particular concerning all or parts of agriculture. Publication of a clear, detailed and (hopefully) limited list of such activities would go a long way to clarify the situation and to reduce frustrations by foreign investors. The workshop suggested that ZIC undertake this work in coordination with the different ministries concerned; 3. expatriate work permits. The workshop suggested that ZIC take up the issue with the Ministry of Labor; and 4. foreign exchange controls. The workshop suggested that the Reserve Bank of Zimbabwe publish the "Green Book" for sale to all interested parties and in the future regularly publish all changes in exchange control policies and regulations in local newspapers. Streamlining In spite of undeniable, substantial improvements, there is further room, and indeed need to streamline the system and speed up procedures. A number of instances were mentioned at the workshop, where the number of ministries and other public services presently involved in approvals of investments, of imports, of transfers, etc., could be reduced without problems and in fact should be reduced as a means to cut processing time. A case in point is the issuing of import licenses for new investments, where there is no need for the Ministry of Finance and the Reserve Bank to be involved. - 29 - The workshop proposed that the Ministry of Industry and Commerce and ZIC prepare a joint proposal for streamlining these procedures. The best way to speed up the investment approval process, however, is to strengthen the decision making power of ZIC and to make it a truly one-stop institution. To this avail, the authority of the different ministerial representatives on the Board of ZIC needs to be strengthened, so that these represent