The Sunday Mail
Africa Moyo Business Reporter —
GOVERNMENT is planning to revolutionise its investment promotion drive from January next year, as it seeks to attract an investment level of 25 percent of Gross Domestic Product (GDP).
Several measures such as re-branding the Zimbabwe Investment Authority (ZIA) have since been lined-up to meet this target.
The country’s GDP was worth US$13,89 billion last year and is projected to grow at a moderate 1,7 percent next year against the background of anticipated modest improvements in international commodity prices, fruition of planned mining investments and benefits from the ease of doing business reforms.
Zimbabwe has vast investment opportunities spanning across several sectors of the economy including mining, agriculture and tourism.
Investors have been expressing interest in committing their funds in the country but are frustrated by red tape among Government departments.
Between 2011 and 2015, investment proposals worth US$12,6 billion were approved but a paltry US$2,1 billion investments have taken off, leaving US$11,5 billion investments dead in the water.
Last week, Macro-Economic Planning and Investment Promotion Minister Dr Obert Mpofu told The Sunday Mail Business that the lack of a robust investor tracking mechanism at the ZIA, which assesses project implementation status and challenges faced by investors, is responsible for the low consummation of investment projects in the country.
Dr Mpofu said as the country enters into 2017, a stand-alone department, fully designed to assist investors in investment implementation and addressing challenges met by investors, would be created at ZIA.
“This department shall also be responsible for receiving investors as they enter into the country at the airport to ensure investor hospitality is improved,” said Dr Mpofu.
Market watchers say the country’s perceived high risk premium, fanned by unrestrained graft, economic instability, high cost of doing business and policy inconsistencies, are some of the issues crippling the investment attractiveness.
However, Dr Mpofu said it would be “business unusual” next year, as the country seeks to reposition itself as one of the safest investment destinations in the world.
He said his ministry applauds and embraces the recent move by Government to adopt the Rapid Results Initiative (RRI) for the implementation of ZimAsset targets.
“As the ministry responsible for investment promotion, the year 2017 will mark a paradigm shift in our approach to investment promotion as we employ the RRI to aggressively market the vast investment opportunities obtaining in the country.
“The target is to uplift the country’s investment inflows to levels that compare favourably to those of our regional counterparts. The target is to achieve an investment level of 25 percent of GDP,” said Dr Mpofu.
The United Nations Conference on Trade and Development 2016 World Investment Report shows that Zimbabwe’s FDI at US$421 million in 2015 was lower than investments in Mozambique and Zambia, which stood at US$3,7 billion and US$1,6 billion respectively.
Curiously, Mozambique is able to attract investment despite the threat of political instability posed by Renamo rebels in the western part of that country.
The failure by Zimbabwe to attract meaningful investment when its neighbours are swimming in both foreign and local investment has resulted in the Investment Promotion ministry lining up a number of programmes including road-shows to the country’s major investment source markets and the BRICS countries.
BRICS refers to an association of five emerging national economies of Brazil, Russia, India, China and South Africa.
The BRICS bloc is seen as critical to win over as the five countries have a combined GDP of about US$37 trillion, and almost US$4 trillion in foreign reserves.
It also has a combined population of 3,6 billion people as at last year, representing half of the world population, which means there is a large pool of investors and consumers from the bloc.
Already, South Africa and China are Zimbabwe’s key trading partners with data from China’s National Bureau of Statistics (NBS), showing that bilateral trade between Zimbabwe and the Asian tiger increased from a mere US$52,2 million in 1996 to a peak of US$1,24 billion in 2014.
By comparison, the value of trade between Zimbabwe and the United States of America was US$113 million while the value of the EU-Zimbabwe trade was about US$817 million.
Interestingly, China is Zimbabwe’s largest foreign investor, ploughing in US$1,3 billion between 2009 and 2013, making the planned road-shows to the BRICS countries timely and critical.
Dr Mpofu says the promulgation of Special Economic Zones (SEZs) Act in October by President Mugabe has “marked a new era” on the investment arena that shall see the country receiving “tripled investment inflows” from next year.
He said most of the BRICS countries rose to their current investment levels due to the implementation of SEZs.
“Zimbabwe’s SEZs shall be broadly modelled along product specific, geographical area and industry specific SEZs. The Ministry of Finance and Economic Development has already gazetted some of the fiscal incentives that will apply in SEZs.
“This shows Government commitment to the implementation of SEZs. The Ministry of Macro Economic Planning and Investment Promotion is also planning to roll out the SEZs concept to all provinces in Zimbabwe during the first quarter of 2017. This is meant to prepare municipalities or local authorities therein to begin the process of modelling SEZs that could be hosted by their provinces,” said Dr Mpofu.
Government targets to have at least one SEZ in each of the country’s 10 provinces to enable decentralised development.
The SEZs concept is also expected to be tailor-made for Zimbabweans living in the Diaspora, taking a cue from countries such as India and Ethiopia, whose Diasporans contributed significantly to the development process of their countries.
Dr Mpofu said they will work in conjunction with line ministries to introduce Diaspora SEZs to help the country to tape from the latent financial base that lies within the Diaspora.
Already, a Diaspora Directorate has been set within the Investment Promotion ministry and a Diaspora Desk would be set by ZIA to ensure that SEZ models for locals in other countries are established in 2017. The new Diaspora Policy is primed to attract Diaspora investments and to make it easy for them to participate in the development of their country through investments.
A number of visits to Canada, South Africa and United Kingdom have already been undertaken to attract Diaspora investments.
Similarly, an “invest in Zimbabwe” handbook would be launched in January 2017, to aid in the dissemination of information to investors including those from the Diaspora.
The handbook would be the key marketing document meant to unpack investment opportunities in the country, and would lay a clear trajectory for the country regards investment.
As part of measures designed to attract investment, Government also plans to re-brand ZIA in the first quarter of 2017 and transform it into a fully-fledged One Stop Shop (OSS) Investment Centre to meet world class standards for an effective and efficient investment agency.
Dr Mpofu said that would be buttressed by the recent amendment of ZIA Act to legalise the setting up of the OSS at ZIA and to allow investors to obtain investment licences within five working days.
“It will not be business as usual at the OSS investment centre. ZIA OSS will be given clear investment targets in line with our ZimAsset.
“The OSS shall totally cut out bureaucracy and the tossing of investors from one office to the other. This will ensure that all investors are registered with ZIA and get efficient services from ZIA OSS.
“Currently the ministry is in the process of setting up a new board for ZIA. The board shall be composed of highly qualified persons and is expected to spearhead Government’s 2017 investment thrust and ensure that investors obtain their investment licences or permits under one roof without being tossed from one office to the other,” said Dr Mpofu.
The terms of the ZIA board led by Dr Nigel Chanakira expired last year but Government extended it initially to March this year since members were involved in the ease of doing business reforms. Dr Chanakira told The Sunday Mail Business last week that his board’s term was further extended to September 30 and the term was not renewed.
Government says the new ZIA board will engage investors from all parts of the world including those from Africa such as Nigerian billionaire Mr Aliko Dangote, in a bid to promote intra-Africa trade and investment.