Online Reporter
ZIMBABWE is increasingly seen as a good country to invest in, thanks to pro-investor and pro-business policies of the Second Republic with local asset managers now, buoyed by economic stability, joining foreign investors in making initial commitments that totalled US$1,4 billion in the first quarter of this year.
As with almost all developing economies, Zimbabwe needs vast capital investment to keep up its growth rates, especially in the underlying infrastructure which includes energy, but with mining, agriculture and manufacturing always able to use substantial extra investment.
One of the earlier reforms of the Second Republic was to amalgamate a collection of investment agencies that had grown to meet special needs into a single Zimbabwe Investment and Development Agency, able to offer a one-stop shop for those wanting to invest.
There are a number of special benefits that investors can tap, everything from early tax breaks in the development stage, to access to land and simplified licensing procedures.
Having just the one agency means that any entity or person with money to invest can get all the required information in one go, instead of having to tramp around trying to track down a multiplicity of development agencies and licensing authorities.
This also allows ZIDA to move out of its offices and go out into the wider national arena and the outside world and talk to likely investors, or desirable investors, being pro-active in seeking investment as well as dealing with queries.
ZIDA teams and officers now participate in far more of the serious investment conferences that include likely partners in Zimbabwe’s development and can visit targeted entities and firms that have often been highlighted by other arms of Government. This helps boost investment as serious potential investors are engaged.
The US$1,4 billion quarterly total of investment commitments still need to translate to the actual work on the ground, the pouring of concrete and the like, but by the time a potential investor has reached that stage it is highly likely that we have reached the point where they will commit the cash.
Right now renewable energy forms the largest group of those who have reached the commitment stage, possible because of the reforms in licensing independent power producers and arranging their connection to the national grid.
The dramatic reduction in costs of new solar power stations has helped, with solar and wind power stations, including storage, now considered more economical than new coal-fired thermal power stations and just as reliable.
This new development, noted last year for the first time, will be driving investment into power stations in many developing nations who either have good sunlight for solar, or sustained strong winds for wind turbines.
Zimbabwe, being a land-locked tropical country does not have sustained winds for the turbines, but has remarkably high levels of sunlight, with the additional benefit of generally clear skies in winter months when the sun shines less brightly, and cloud cover mainly near the summer solstice when sunlight is strongest. That tends to produce a more constant capture of solar energy.
The other major advantage of investing in solar power stations is that they can easily be developed in phases, with very little civil engineering works. The main interaction an investor needs with the Government is access to land, or now with newer technologies to larger water bodies, hence the investment progressing for a solar power station floating on Lake Kariba.
Other infrastructure is also critical, everything from new dams to upgraded railway lines and new rail lines.
To plug such investment into the national plans and national needs obviously requires a highly flexible approach to investment, so the investor gets a decent return and where they channel their cash are areas that need to jump development queues. Presumably this is one of ZIDA’s roles, matching the investor to the need.
Investment does not just happen. Every investor, foreign or local, wants the good economic growth based on fundamentals, that is a hallmark of the Second Republic, along with the ever more efficiency of State services and high levels of transparency that treat everyone equally and fairly with no rent seeking.
Economic stability, a respect for the rule of law, which includes a decent legal system and good courts for when disputes arise, are other factors that now benefit Zimbabwe, these having been sorted out earlier by the Second Republic.
No one owes Zimbabwe a living, but when we have opportunities, are able to present these accurately, and are able to give the necessary support and back-up, we will find growing interest in finding people ready to invest in what they see as a good deal, where everyone wins.
