Zimbabwe FDI drops to $421 million

Zimbabwe FDI drops to $421 million
Published: 13 July 2016
Finance and Economic Development Minister Patrick Chinamasa has said clearance of the country's debt arrears to its multi-lateral creditors without fresh funding will leave Zimbabwe in a worse off economic situation. This comes as the country's foreign direct investment flows dropped to $421 million in 2015 from $545 million in 2014.

The amount constitutes an insignificant part of the $17,9 billion which found its way into the Southern Africa region according to the latest United Nations Conference on Trade and Development 2016 World Investment Report.

Zimbabwe is currently re-engaging with the multi-lateral institutions in a bid to end more than a decade and a half of financial isolation. The country is working on a plan to clear $1,8 billion in arrears owed to the International Monetary Fund, the World Bank and the African Development Bank. By clearing its arrears, the country hopes it could get IMF emergency loans within months. The country has also embarked on policy and process reforms to improve the investment climate.

Recently Government said it would continue to "identify areas that need urgent surgical therapy to improve our investment climate" and empower local entrepreneurs, attract Zimbabweans in the diaspora and foreign investors to bring capital and technology into the country.

In the past decade, Zimbabwe has trailed its neighbours in attracting FDI and remains in the bottom five of southern African rankings on receiving foreign investment.

"What is needed is to increase the momentum of the reforms to ensure that all bottlenecks are removed for at the end of the day we should remember that capital goes where the environment is favourable and where it feels comfortable," Vice President Emmerson Mnangagwa said at the occasion to mark 200 days of the Rapid Results Framework.

At an investment conference held in London last week, Minister Chinamasa said the discourse and dialogue is that alongside clearance there should be reciprocal commitment from the institutions to provide Zimbabwe new money to support sectors of the economy with agriculture being top priority.

"The clearance of arrears alone is not enough . . . in fact it will leave Zimbabwe in a worse off position. What we want is to grow the economy and to bring it back to where it can meet its obligations.

"So the discussion we are currently having is that alongside clearing of arrears we are negotiating for a country financing programme. Top of the agenda of the programme would be agriculture," said Minister Chinamasa adding that Zimbabwe was open and ready for investment from all countries including Britain.
- theherald
Tags: FDI,

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