The Sunday Mail
THE Zimbabwe Investment Authority (ZIA) has begun foraging the international market as part of an aggressive new approach meant to increase foreign direct investment (FDI) from the current US$400 million to US$2 billion per annum. ZIA chairman Mr Nigel Chanakira told The Sunday Mail Business last week that the authority will scout for investments from South Africa, Dubai, the United States of America, United Kingdom and China.
Zimbabwe, unlike its regional peers, is finding it increasingly difficult to attract FDI.
In 2012, investment inflows into neighbouring Zambia topped US$1 billion while Mozambique and South Africa recorded US$5 billion and US$4 billion respectively.
However, the country only managed to attract US$400 million in the same period.
According to Mr Chanakira, Government is no longer reactionary, it is now taking the initiative to engage potential investors.
“We are no longer reactionary, waiting for money to come to us, but we are going out to potential investors and telling them our story; telling the world that Zimbabwe is ready for business.
“We are holding road shows in other countries and working with embassies here where we exchange notes on the message they project out there and what we want to achieve. Already a lot of inquiries are coming from the UK and the USA, which is a good sign because they were not coming to us in many years,” said Mr Chanakira on the sidelines of an Imara Investor Conference in Harare.
Of the investment inquiries received, 70 percent of them are for mining ventures.
Mining is one of the key sectors of the economy and accounts for more than 50 percent of the country’s total exports.
Its contribution to the gross domestic product (GDP) has grown from an average of 4 percent in the 1990s to about 13 percent between 2009 and 2011.
The sector is projected to grow by 11 percent in 2014.
The discovery of huge diamond deposits in Manicaland Province is expected to further drive the sector’s growth.
ZIA believes that mining has the highest potential for attracting FDI because of resource availability.
Zimbabwe has more than 40 tradeable minerals and holds the world’s second largest platinum reserves.
Government is presently working towards ensuring that proposed deals come into fruition.
It is estimated that out of all the investment proposals brought to the investment authority, only 50 percent are implemented.
Market watchers argue that the cost of doing business in Zimbabwe is still high.
The World Bank ranks Zimbabwe number 172 out of 185 countries on doing business rankings while it is ranked number 131 out of 148 on competitiveness ranking.
“We give feedback to policymakers on what works for business and what might stifle growth or scare away investment.
“Right now we are happy the Ministry of Mines said the mining policy will soon be reviewed,” explained Mr Chinakira.
