'Failure to remit funds scares away Zim investors'

Published: 15 March 2018

ZIMBABWE'S competitiveness as an economy and investment destination on the ease of doing business rankings will remain poor unless foreign investors are able to repatriate dividends, an official from Exim Bank of India has said.

Speaking at the recent Zimbabwe Investment Conference, Sanjay Lamba, a regional representative of Exim Bank, said remittances should be a top priority on ease of doing business reforms in Zimbabwe.

"In all discussions on ease of doing business in Zimbabwe, we should be talking of ease of remittance out of Zimbabwe. This has been a major stumbling block for investors wishing to invest in Zimbabwe," he said.

Zimbabwe has been battling an acute cash shortage on the back of a foreign currency crisis, resulting in multinational companies failing to remit dividends to their international shareholders.

"We should try to ease this process or change the policy. Every investor would want to remit some profits to their country. This will make Zimbabwe a competitive investment destination if addressed," Lamba said.

Foreign investors have been failing to remit dividends out of the country despite the Reserve Bank of Zimbabwe and the Zimbabwe Stock Exchange (ZSE) giving assurances that the remittance of capital, capital appreciation and dividends were top priorities.

Volumes on the ZSE have fallen to record lows as most investors experience delays in the remittance of capital.

The ZSE All Share Index lost 3,6 percent in February to close at 88,03 points as stock prices continue to self-correct.

Industry estimates indicate that transactions worth over $1 billion are on hold as local banks struggle to meet international payments on behalf of their clients.

According to the World Bank's latest rankings, Zimbabwe was ranked 159 out of 190 economies on the global Ease of Doing Business rankings, scoring 48,47 percent out of a possible 100 percent, a 0,80 percent increase from 47,6 percent recorded last year.

- fingaz

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