FDI into Zimbabwe doubles in 2017

FDI into Zimbabwe doubles in 2017
Published: 28 August 2017
Foreign direct investment to Zimbabwe doubled in the first half of 2017 compared to the same period last year following President Mugabe's clarification of the National Indigenisation and Economic Empowerment Policy, and on the back of ease-of-doing-business reforms.

A significant portion of that investment came from non-traditional sources like Bulgaria, Israel, Pakistan and Singapore.

Figures from the Zimbabwe Investment Authority show that approved investments and joint ventures accounted for US$609 176 657,23 compared to 2016's US$305 587 782,77.

Mining topped the list with investments worth US$264 796 429, a marked leap from the US$50 million deals approved between January and June 2016.

Investments worth US$118 088 713,79 were directed to the services sector, up from around US$69 million during the same period last year.

The construction (US$101 387 249,44) and energy (US$97,5 million) sectors were in third and fourth position respectively.

ZIA issued 62 investment licences with capacity to create 3 703 jobs and generate US$36 926 622,66 in export earnings.

Mining accounted for 27 licences, and is anticipated to create 1 789 jobs and rake in US$14 million from exports.

Manufacturing investors were cleared to run 14 projects that will create 358 jobs and earn Zimbabwe over US$500 000.

ZIA board chair Mr Richard Wilde told The Sunday Mail last week that investors fully understood the indigenisation policy and were keen to deal with Zimbabwe, and ease-of-doing-business reforms spearheaded by the Office of the President were beginning to pay dividends.

"I think there have been a lot of efforts to try and clarify that; going back to the statement which the President made last year. As long as the investor knows what the rules are, then I think there is no problem.

"Because indigenisation is not a uniquely Zimbabwean policy, many countries like Malaysia have been extremely successful in attracting foreign investment with such a policy in place.

"It's just a matter of: What are the ground rules? Yes, we have to have policy consistency and clear rules of how investment is going to be treated. As long as they are clear, investors can work with policies the country may have. Those are the key areas. Before President Mugabe's statement, it was very unclear which sectors would be affected by what."

Mr Wilde continued: "We are beginning to attract investment from new markets, and there has been quite some significant movement this year. We have seen investment from markets like Bulgaria, Israel and Singapore. These are markets that have not traditionally invested in this country.

"Aside from all the investment from the West, we also have investment coming from China and South Africa. But now we are beginning to see countries like Bulgaria, which have never been here before showing interest in this country.

"So, it's good now that we are getting a bigger spread of investment source markets, especially from non-traditional markets. This is not to say we are not getting investment from the traditional markets; it's just that we haven't — in the past — seen investment coming from these other countries."

In 2016, President Mugabe clarified that implementation of the National Indigenisation and Economic Empowerment Policy distinguishes the natural resources sector, non-resources sector and reserved sector.
These sectors, the President said, were to be approached differently "in terms of implementation of and compliance with" the policy.

This followed Youth, Indigenisation and Economic Empowerment Minister Patrick Zhuwao's threats to shut down certain businesses after misinterpreting Government policy.

Government has also been reforming the business environment, with at least seven out of 13 relevant Bills already before Parliament.

In early 2017, respected United States global market watchers Research Markets identified Zimbabwe among the top three African countries with the best return on investment, thanks to its highly lucrative commercial opportunities and doing business reforms.

The firm came to the conclusion after a comprehensive survey to determine African countries with the best economic outlook over the next three years.
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Tags: FDI,


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