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Foreign Direct Investments more than double

23 Jun, 2019 - 00:06 0 Views

The Sunday Mail

Debra Matabvu

FOREIGN Direct Investment (FDI) to Zimbabwe more than doubled last year compared to the past two years, the latest United Nations Conference on Trade and Development (UNCTAD) World Investment Report has revealed.

Statistics contained in the document highlight that the country’s FDI were US$421 million in 2015, before going down to US$372 million in 2016 and US$349 million in 2017.

The figures significantly rose to US$745 last year — in the Second Republic.

The report also shows that Zimbabwe has the largest announced greenfield project among landlocked countries in the world, in the form of the US$4,2 billion Karo Resources platinum project.

Karo resources, according to the report; “is ahead of Fairfax Africa Fund’s (United States) petroleum refinery in Ethiopia and Japanese Kawasaki Heavy Industries’ gas manufacturing plant in Turkmenistan among other projects.”

The mega Karo Resources project in Mhondoro-Mubaira is set to create a combined 90 000 jobs, add approximately 300 megawatts to national grid and set up a mining complex with a refinery for platinum beneficiation.

The world Investment Report further states that Sinosteel (China) metal production is destined for a major expansion in the medium term. Government recently signed an investment deal worth over $5 billion with Chinese steel giant, Tsingshan, for the setting up of a steel plant in Mvuma and to bankroll a number of mining activities.

The deal is expected to create at least 30 000 jobs.

President Mnangagwa has been making wide range reforms — both political and economic — in line with vision 2030, which is open to all business collaborations that catalyze development in the country.

“In Uganda and Zimbabwe, a small number of projects resulted in fast-growing FDI flows, but from an extremely low basis,” read part of the report.

“Some new investments in the processing of natural resources may support the industrialisation process and a move up the value chain, such as the investment by Sinosteel (China) in Zimbabwe’s metal production, which has potential for major expansion in the medium term.”

Economist Dr Gift Mugano said the upward increase in FDIs is an indicator of investor confidence in the reforms being implemented by Government.

“It is a positive development and these are the fruits of the efforts by the Second Republic to attract investors under the Zimbabwe is open for business mantra,” he said.

“The reforms, which are being spelled out in the Transitional Stabilisation Program (TSP), are now bearing fruit because investors want some form of confidence.

“From a political point of view, it might also be a result of some constitutional amendments and reforms being under taken by the Government. Such moves boost investor confidence.

“In addition, the 12th edition of the US- Africa Summit also boosts investor confidence so we hope there will also be a FDI increase this year.”

Among measures being put forward by the Government include the Zimbabwe Investment Development Agency (Zida), which is expected to attract a lot of FDI into the country.

The Zida Bill published in the Government Gazette recently, is part of the reform agenda being pursued by the Government to ensure the country achieves an Upper Middle-Income status by 2030.

Government has also been fine-tuning various legal framework such as the Indigenisation and Economic Empowerment Act to promote investment in the country.

Zimbabwe is also engaging multilateral financial institutions on a debt repayment plan with an International Monetary Fund staff monitored programme currently underway.

Zimbabwe and the European Union recently launched a formal dialogue process which seeks to reintegrate Harare into the global family of nations.

An influential London-based journal EU Today recently stated that President Mnangagwa’s will-power to transform the country through implementing various reforms, opening up the economy for business and international re-engagement is now bearing fruit.

“All these reforms take time, but they are necessary for the EU and US to lift long-standing sanctions,” said Martin Banks, a contributor to EU Today.

“The IMF appeared pleased, stating recently that ‘significant economic reforms were underway in Zimbabwe.’ — Slowly but surely, (President) Mnangagwa’s actions are bearing fruit. Leaders across Africa have called for the removal of sanctions, which would dramatically ease Zimbabwe’s economic burden.”

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