The Sunday Mail
The Economic Planning and Investment Promotion Ministry’s mandate is to formulate Zimbabwe’s economic plans, such as Zim-Asset.
Dr Desire Sibanda
It also provides the macro-economic framework that sets growth targets, investment requirements and other macro-economic variables.
This work should not be confused with that of the Finance and Economic Development Ministry, which focuses on fiscal issues: the National Budget, Treasury, the Exchequer, public expenditure and revenue-raising methods. The Finance Ministry also oversees the Reserve Bank of Zimbabwe on monetary issues, exchange and interest rates, currency and money supply.
Nevertheless, all these functions are guided by Zim-Asset or the economic plan produced by our ministry consultatively with other ministries.
Countries like Nigeria, South Africa, Ghana and Kenya have planning commissions instead of a Ministry of Economic Planning.
So, we are planners and set the country’s trajectory and economic priorities.
In 2015, economic growth declined from 3,5 to 1,5 percent mainly because agriculture – the mainstay of our economy – did not fare well on account of the drought that affected Southern Africa.
Though growth has slowed down, it would be untrue to say Zimbabwe’s economy is in the doldrums.
Remember, in 2014, we had 3.5 percent growth, and the accepted global average economic growth is around three percent.
Therefore, we are not in crisis, but at a point where we need to focus on growth.
This is why we have to take steps to grow the economy. We are already finalising 2016 priorities.
Government is not resting on its laurels, but working round the clock to achieve growth and a firm foundation so that we attain the seven percent economic growth target spelt out in Zim-Asset.
Investment tracking
Many might have noticed several foreign delegations visiting Zimbabwe this year to explore investment opportunities.
In the last six months alone, over 60 delegations have scouted for such opportunities and we are talking to them, putting in place the right investment conditions.
We have also seen the President and Vice-Presidents go on investment-seeking missions. Government will implement what we term “investment tracking” as we follow up all investment inquiries.
The World Investment Report released this year shows Zimbabwe registered an increase of 36 percent in investment inflows.
Within this follow-up framework, our target is a 100 percent investment increase by 2016. This is why we now have the policy on special economic zones to attract investment and ensure export production capacity.
We are confident the economy will grow once SEZs are in place as seen in countries like China. Zambia grew its economy by six percent and Ethiopia eight percent, while Nigeria has surpassed South Africa as Africa’s biggest economy, mainly due to SEZs.
The SEZs Bill is with the Attorney-General’s Office. Further, we are going to host a historic economic conference in October, the first in a long time.
We have dubbed it “Investment, Growth and Reduction of Poverty Conference” and will call Zimbabwe’s best brains.
The conference looks at our investment position, attracting investors and growth from the perspective that other African countries are growing, so should we.
At present, we are receiving the least FDI regionally. Thus, we need to look at quick-win sectors to attract investment while also focusing on agriculture, mining and tourism. There is great confidence that the conference will come up with resolutions to address economic growth. Foreign speakers will be part of the gathering so that we learn from their country experiences.
Investment Policy and Handbook
The Economic Planning and Investment Promotion Ministry is working on the Investment Policy, which seeks to establish a platform for Zimbabwe to emerge as an attractive investment destination.
The policy will define the role of public, private, domestic and FDI; harnessing investment for productive capacity-building; and enhancing international competitiveness.
It also spells out coherence between/among investment policy areas geared towards overall development objectives.
The policy is expected to be tabled before Cabinet by the end of September 2015 and part of it emphasises manufacturing, an area where we are advocating investment.
An Investment Handbook will be introduced to back the policy and guide investors on how to invest in Zimbabwe.
Through this handbook, we will engage them, highlighting investment opportunities. It will also show Zimbabwe’s economic and political realignments; the gateway to the Sadc market of not less than 400 million and the 40-plus types of minerals that make Zimbabwe the Persian Gulf of minerals.
In addition, the handbook will state what Government has done/is doing to improve the doing-business environment; national priorities; the economic development plan and incentives offered to various economic sectors. These are competitive incentives as they detail Zimbabwe’s attractiveness.
We will craft a Bill for this.
The handbook will detail investment conditions in Zimbabwe and assure investors that we abide by the rule of law and their investments are safe here.
It was initially launched during the UN World Tourism Organisation General Assembly in 2013, and has been revised to suit the trajectory we are following and new developments. Zimbabwe has numerous incentives and opportunities for both local and foreign investment. A lot of investors do not know much about the country; its history, its peaceful nature, the public administration system and many other aspects which the handbook will feature.
Value-addition & parastatal
performance
We are transforming the Zimbabwe Investment Authority into a One-Stop Shop by September 30.
ZIA will also soon have an investment website as part of the e-government programme. Investors will be able to use this website to learn Zimbabwe’s investment conditions. Zimbabwe offers a number of tax and customs incentives in the form of tax holidays, reduced tax rates and accelerated depreciation. In the 2015 National Budget, we said if a company exports over 50 percent of its products, it qualifies for very low taxation of about 20 percent.
There will be more incentives for all sectors in the 2016 National Budget.
This means by attracting investment, we can be able to achieve commodity-based industrialisation through leveraging our resources so that investment goes into manufacturing. We will increase exports by so doing, and address the huge import bill. The focus should be on industrialising all our commodities. It should be understood that achieving economic growth requires concerted work. The private sector; co-operating partners; donors and captains of industry, all need to play a part to create the right business environment. Conducive infrastructure is also important to attracting business.
Another priority is organising dialogue with mining companies to ensure they contribute more to the fiscus through mineral beneficiation. There is also need to address fiscal space and ensure the small scale business sector contributes to national revenue.
In China, parastatals are vehicles of economic development. Therefore, the poor performance of our parastatals should be addressed. In addition, our focus should be on controlling public expenditure.
In terms of Diaspora engagement, 20 percent of others countries’ GDP comes from Diasporans.
Policy inconsistency
Government has often been accused of policy inconsistency. If Zim-Asset is read fully, it will be learnt that this blueprint clarifies all policy areas. For example, on indigenisation, the President is on record — many times over – giving policy direction on this matter and it dovetails into Zim-Asset. We are also very clear on value-addition; clear that we have to value add and do not want to sell our products in raw form.
What is happening in the mining sector where 90 percent of mining exports are in their raw form is unacceptable and we are addressing this.
The challenge is some mining investors are headquartered in their home countries, hence they do not mind exporting minerals in their raw form. Our policy on value-addition and beneficiation is clear and this is why President Mugabe, in his tenure as Sadc and Africa Union Chair, has sold the idea to these two bodies. From a local level, we can see commitment in respect of value-addition and beneficiation in key decisions that have been taken on raw mineral exports such as chrome and platinum.
Obviously, there are bottlenecks in terms of implementing some of our plans and these bottlenecks include poor infrastructure, lack of capital and skills.
We are on the right track, though.
Zim-Asset has given us a rallying point around which to focus on enhancing production, empowerment, and poverty reduction and also to mobilise resources for economic growth. Zim-Asset has made our people and even the international community see where we are going. This is a five-year plan. We are in 2015, so there are about three years to go. What has been done is set priorities for 2016 and I can rightly say, “So far so good.”
Some goals under Zim-Asset require time; now is not the right time to judge.
It’s a five-year plan and we are proceeding well so far. I am confident we would have achieved our targets by the end of this five-year period.
Dr Desire Sibanda is the Secretary for Economic Planning and Investment Promotion. These views were taken from his discussion with The Sunday Mail’s Chief Reporter Kuda Bwititi in Harare last week.
