Zimbabwe's FDI inflows stagnate at $400m

Published: 25 June 2014

Foreign investors have failed to react to Zimbabwe's foreign investment attraction policies as the country's foreign direct investment figures last year stagnated at $400 million, the United Nations Conference on Trade and Investment (UNCTAD) World Investment Report 2014 shows.

The country's investment figures show that FDI figures only doubled in between 2010 and 2011 when the Zimbabwe Investment Authority's One Stop Shop was introduced in 2010, but the figures have leveled since then.

The $400 million figure is not the lowest in the region, but pales in significance when juxtaposed against that of neighbouring countries.

The UNCTAD report shows that South Africa received the highest FDI in Sadc at $8,1 billion out of the $13,1 billion that flowed into Sadc, followed by Mozambique with $5,9 billion.

Zimbabwe's northern neighbours Zambia received $1,8 billion in FDI last year.

Speaking at the launch of the World Investment Report 2014 yesterday, United Nations Development Fund (UNDP) economic advisor Amarakoon Bandara said the country required Government commitment in sustainable investment goals.

"Investing in sustainable investment goals requires a strategy framework and full commitment from the Government" he said.

ZIA chairman Nigel Chanakira said once Government has cleared issues surrounding the indigenisation policy and Special Economic Zone, Zimbabwe will be able to reach $2 billion per annum from next year.

"Next year, once Government has clarified the Special Economic Zones and the policy on indigenisation, from our projects we should move in the range of the $2 billion mark," said Chanakira.

Chanakira also said inflows as measured by UNCTAD should reach $1 billion starting from this year onwards if the Essar deal becomes operational.

According to ZIA, 162 investment projects valued at $400 million have been approved this year so far.

Meanwhile, the UNCTAD report also shows that Zimbabwe's FDI outflows stood at $27 million, reflecting limited economic activity in the country.

Last week, Invictus Investment Management chief executive Ritesh Anand noted that Zimbabwe is contributing less than one percent of foreign direct investment towards Africa due to low investment levels.

"Zimbabwe attracts less than one percent of FDI towards Africa, but it is well positioned to attract FDI because of its highly educated population, good infrastructure and vast natural resources," he said.

At a broader level, the report showed that Africa's FDI inflows increased by 4 percent during the period, sustained by growing intra-African flows which are in line with the efforts by leaders for deeper regional integration.
- BH24

Tags: Zimbabwe,