The economy is subject to some over-regulation and protectionism. This is partly a legacy of colonial rule but it is also sustained by a large public sector with vested commercial interests of public enterprises. While well established local investors may have come to terms with this regulatory environment, it can be both confusing and discouraging to the new investor. A more open and competitive investment and trade, and a more balanced and predictable regulatory environment needs to be created. The new Commerce Act of 1998 seeks to improve the regulatory environment.
Government is firmly committed to improving governance, accountability, and transparency.
The Public Finance Management Act promulgated in early 1999 provides for a revised government financial management system. The Act is a highly significant development which aims at increasing efficiency and accountability. A new system will be introduced under the Act which will focus on performance-based public sector management. This, among other matters, includes switching from input to output-based budgeting and the introduction of accrual rather than cash accounting throughout the Government. Over-regulation and protectionism is apparent in the remaining restrictions on the holding of foreign exchange, reserving certain industries for domestic investors under the proposed foreign investment bill, a reliance on extensive tax incentives to induce investment, and complex and protracted systems of investment approval.