South African companies have invested over $1,2 billion in Zimbabwe between 2003 and 2013 creating over 2 485 employment opportunities in the country, latest figures show.
Jacob Zuma, South Africa's President, last week told a South Africa-Zimbabwe business forum that there was need to strengthen economic and political ties between the two countries to achieve industrialisation and economic growth.
"Consistent with the strong historical economic relations, a number of South African companies continue to operate in Zimbabwe, principally in the mining, tourism, agriculture, banking and retail sectors," he said.
South African companies in Zimbabwe - including Nedbank, Impala Platinum, Standard Bank, Old Mutual and Tongaat-Hullet among others - have continued to operate in the country despite threats of indigenisation by the Zanu PF government.
The controversial policy, which forces foreign-owned firms to cede 51 percent of their shareholding to locals, has been identified by economic experts as one of the impediments to the smooth flow of foreign direct investment (FDI) in the country.
A recent report by the central bank revealed that FDI into Zimbabwe declined from $400 million in 2013 to $372,6 million last year, as investors continue to shun the southern African country amid a worsening economic crisis.
"Net foreign direct investment decreased to $300,6 million in 2014, from $373,1 million in 2013. Receivables decreased from $400 million to $372,6 million, while payments increased from $27 million to $72 million," said the central bank in a 2014 inflation report.
The decline in FDI comes at a time when other regional countries such as Mozambique and Zambia are enjoying strong economic growths due to increased FDI inflows.
A recent report by the International Monetary Fund noted that on a cumulative basis and compared to other countries in the region, Zimbabwe's FDI inflows amounted to $1,7 billion over the period 1980 to 2013, whereas, Zambia and Mozambique received $7,7 billion and $15,8 billion, respectively.
Zuma also said there was need for Zimbabwe "to do everything possible to remove all the hindrances, perceived or otherwise, to investment".
"In an effort to encourage investment into Zimbabwe's economy, South Africa has also through the department of Trade and Industry facilitated investment and trade initiatives to Harare and Bulawayo since 2010," he said.
South African companies seeking investment opportunities, joint venture partnerships and trade opportunities in the agro-processing, mining and capital equipment, infrastructure, energy, information and communication technology and automotive components have participated in these initiatives.
Statistics from Africa's second largest economy trade department show that between 2005 and 2014 South Africa's exports to Zimbabwe grew by 247 percent from $710 million to $2,48 billion, with minimal contraction recorded in 2006 and 2009.
In the same period, Zimbabwean exports to South Africa fell by 54,7 percent to $200 million from $440 million that was reported in 2005.
South Africa's exports to Zimbabwe comprise machinery, electrical equipment, mechanical appliances, chemical products, base metals, mineral products and agro-processed products.
In turn, Zimbabwe's exports to South Africa include textiles, pearls, precious and semi-precious stones as well as base metals and mineral products.
- dailynews
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