Online Reporter
Nelson Gahadza
AS the country positions itself for sustained economic growth, insurance risk cover is no longer a mere safety net but a vital means of attracting and sustaining long-term investments, the Zimbabwe Investment and Development Agency (ZIDA) has said.
Across the globe, investors are increasingly valuing the importance of security and assurance that their investments are protected against unforeseen events, including currency volatility, policy shifts and regulatory changes.
“This heightened demand for risk cover is driven by the desire for plannable, sustainable growth in frontier markets, which traditionally carry higher perceived risks,” ZIDA chief executive Mr Tafadzwa Chinamo said during a Southern Africa Insurance indaba held in Victoria Falls recently.
“But what may appear as vulnerabilities in emerging economies like Zimbabwe are, in fact, untapped growth opportunities, particularly when viewed through the lens of innovative risk management and insurance solutions.”
ZIDA is Zimbabwe’s national investment promotion agency, responsible for promoting, planning and facilitating both domestic and foreign investment in the country.
Mr Chinamo said Zimbabwe must position itself strategically to exploit opportunities in its economy, as should every country across Africa.
“Because we interact with investors from across the sectors coming from all over the world, they are telling us that there are certain risks that need to be managed,” he said.
“These include currency and profitability risk in the sense of repatriation of profits, policy and regulatory predictability, as in any environment, policies do change and the way they impact businesses is never really certain.
“Therefore, as policy shifts, it evaluates political risk profiles, driving demand for specialised coverage.”
Mr Chinamo said investors wanted predictable regulatory processes to meet international underwriting compliance.
“These insights show ways in which the insurance sector can innovate to reduce investment and deepen investor confidence, and we believe that promoting investment into a country will be futile if the environment itself is unpredictable,” he said.
Mr Chinamo said ZIDA had taken it upon itself to champion or advocate for reforms that created a more insurable and equitable investment.
“Our mission as ZIDA is to make Zimbabwe not just a destination for capital, but a place where capital is protected, resilient and primed for inclusive growth,” he said.
“On our part, we have made the licensing process for investors faster and transparent, and we established the One-Stop Investment Services Centre a few years ago to just get the processes done and get all the licensing done from more than a month to just five days now.”
Mr Chinamo said ZIDA seeks to bring the approval turnaround period further down to a single day or two, and this will be achieved following investments in information technology and the digitalisation of many of its processes.
He said ZIDA, as part of creating an enabling environment that strengthened investor trust, launched the Investor Revenues Response Mechanism, which ensured a structured, responsive dialogue that brings confidence.
“Essentially, what this does is that whenever investors and regulators or the Government have a dispute, they lodge this issue with us, and we take it upon ourselves to make sure that the Government party to a business understanding comes to the table and hopefully resolves the matter,” said Mr Chinamo.
He said ZIDA and the insurance industry could start a dialogue on areas of collaboration whereby foreign investors who brought foreign direct investment (FDI) to the country needed insurance.
“Right now, in our books, we have just over 4 000 licensed investors, and this year alone, we are going to add another 700 to that number,” he said. “They are coming with big money across all sectors of the economy, and together we could have found out how many of those actually have some sort of insurance for their businesses.
“Therefore, it (insurance) is not just something that will enable those investments to find a safer home in Zimbabwe, but also, generally, business for the industry.”
Experts contend that by recognising risk cover as a strategic tool rather than just a safety measure, the country can unlock new levels of investment and economic development.
