The Sunday Mail
SOARING expressions of interest from potential investors continue to raise expectations that foreign direct investment (FDI) inflows will recover, especially as the previously strained relations between Zimbabwe and Western countries continue to thaw.
Zimbabwe has failed to attract meaningful FDI in the past, with the country luring a paltry US$410 million last year — the lowest in the Southern African Development Community (SADC) – according to the UNCTAD (United Nations Conference on Trade and Development) World Investment Report.
This compares with neighbouring Mozambique, which managed to bag more than US$2,1 billion in FDI.
The Zimbabwe Investment Authority (ZIA), a statutory body mandated to market the country as an investment destination, is optimistic that it will be able to achieve the US$1 billion target for investments it set for itself, buoyed by US$712 million applications and inquiries it received as of August 31 2014.
While ZIA measures proposed investments, the UNCTAD measures the actual investment that would have materialised.
Zimbabwe’s grand plan is to attract US$2 billion worth of FDI from next year.
Last week, ZIA board chairman Mr Nigel Chanakira said the road shows that were held earlier this year had attracted the attention of investors from countries such as Britain and the United States of America (USA), which hitherto were sitting on the fence.
He noted that the US$1 billion target, excluding the US$4 billion Zimbabwe-Russia platinum deal, will be achieved.
“We are on track to achieving the US$1 billion (FDI) target for this year because we have done applications and inquiries of US$712 million from January to August 31 2014.
“So, in terms of our mandate, I can say we are happy as ZIA with what we have done this year,” said Mr Chanakira.
In the first five months of the year, ZIA had approved projects worth US$134 million.
The projects covered sectors such as mining, manufacturing, transport, tourism and agriculture.
China, which has been the leading investor in the country, had contributed the bulk of investments in the local manufacturing sector at US$81,2 million, while US$16 million was channelled to the mining sector.
Statistics show that trade between China and Africa rose from US$9 billion in 2000 to US$200 billion in 2013.
But it is the interest raised by USA and Britain that has heightening expectations that investments might increase in the medium to long term.
While the US Corporate Council on Africa has postponed its visit to early next year, the UK investment trade mission is expected in the country on Tuesday.
“The British delegation is still coming to explore opportunities in the infrastructure sector in line with Zim-Asset.
“The team will be here from October 28 to 31 and we are actually finalising the programme.
“This is the first visit sponsored by the British government 15 years since this whole sanctions issue.
“A bigger investment mission is expected in the first quarter of next year. So we are happy with that.
“As for the US delegation, it is no longer coming but it is more of a postponement than a cancellation since they are coming early next year; that is the good thing,” said Mr Chanakira.
British Embassy (Harare) deputy head of mission Mr Chris Brown also confirmed the coming of the UK team on Twitter last week.
“Plans coming together well 4 (for) next week’s UK Trade Mission 2 in support of Zim-Asset,” wrote Mr Brown.
Market watchers believe that the recent surge in interest to invest in Zimbabwe by EU countries is largely driven by the decision by the 27-member bloc to remove all sanctions by November 1, 2014.
Unsurprisingly, a number of investors from EU countries have upped their interest in local opportunities.
France’s Ambassador to Zimbabwe Mr Laurent Delahousse recently told The Sunday Business that French companies were keen on investing in the country.
Turkish firms were recently in Zimbabwe hunting for opportunities in mining, construction and education, while US firms have for years been Nichodemously scouting for opportunities despite their country maintaining the Zimbabwe Democracy and Economic Recovery Act (Zidera).
Meanwhile, Mr Chanakira said ZIA was now working towards ensuring that the Chinese and Russian deals are processed with speed to avoid delays similar to those that plagued Essar Africa Limited’s New Zim Steel project.
The New Zim Steel project was launched in 2011 but has faced numerous hurdles since then.
Mr Chanakira said ZIA ran a workshop just over a fortnight ago which was sponsored by the World Bank group where amendments to the investment process in Zimbabwe were ironed out to ensure the speedy implementation of projects.
He said they came up with a report which is now with the Office of President and Cabinet for consideration.
(ZIA) is concerned with the country’s continued negative performance in the ease of doing business indices, and is urging Government to come up with an “Omnibus Act” that operationalises the One Stop Shop (OSS) Investment Centre.
The Doing Business 2014 report, a co-publication of the World Bank and the International Finance Corporation (IFC), shows that Zimbabwe has declined two positions to 170 out of 185 countries on the ease of doing business index.
The report measures indicators such as starting a business, construction permits, getting electricity, trading across borders, enforcing contracts, getting credit and resolving insolvency.
