Sundaymail Editor
THE Zimbabwe Investment and Development Agency (ZIDA) issued 42 licences to lithium investors in the first three months of the year, underlining the country’s potential as a key resource base, especially at a time when global demand for the mineral is soaring.
Overall, ZIDA issued 116 licences across all sectors during the period. The investments in the lithium sector have a potential investment value (PIV) of US$301 million.
Last year, 31 licences with a PIV of US$497 million were issued. In total, the actual value of investments in 2022, according to ZIDA, was US$2,3 billion, and covered capital equipment, loans, equity and local assets.
The global boom in renewable energy has seen an increase in the number of investor inquiries into the lithium sub-sector. The processing of applications for prospecting, mining and processing is continuing.
“The strong trend began in 2022 and is expected to continue for the rest of 2023 and beyond,” reads part of ZIDA’s 2023 First-Quarter Report.
There were also further investments in the mining sector, where an additional 21 licences with a PIV of US$32,9 million were awarded.
Speaking at a media engagement on Wednesday, ZIDA chief executive officer Mr Tafadzwa Chinamo said: “Without doubt, mining outstrips any other investment area. I think every other licence we are having now is in lithium processing, prospecting and so forth.” Manufacturing, he added, was “doing quite well”.
Twenty-eight licences with a PIV of US$61,1 million were issued in the manufacturing sector, in addition to 46 licences valued at US$919 million issued in the whole of 2022. The January to March period notably saw ZIDA issue the highest number of licences quarterly since the first quarter of 2022. A total 116 licences were issued in the first quarter of 2023, which is higher than the 89 issued in the last quarter of 2022 and every other quarter.
The issued licences were out of 219 applications received — also the highest since the first quarter of 2022.
Mr Chinamo said ZIDA is signing no less than 15 to 20 licences per week.
In total, the 116 licences issued in the first quarter of 2023 had a PIV of US$761 million, with US$154 already invested.
According to ZIDA, the actual investment figure of US$154 million covers capital equipment from abroad (US$64,4 million), equity (US$26,9 million), loans (US$2,4 million) and local assets (US$60,8 million).
Mr Chinamo said although most people look for cash brought into local banks as evidence of actual investment, ZIDA considers other forms of investment, such as capital equipment, labour and technology.
“So, we record all those things. But we always put a value on that,” he said.
All in all, most of the investors favoured Harare with 41 licences worth US$283,8 million. Mashonaland East and Matabeleland North came second and third, respectively, with PIVs of US$176 million and US$163,4 million, in that order.
In Q1 2023, the country managed to draw investors from 20 countries.
During the period, as was the case in 2022, investors from China contributed the bulk of investors, with mining, particularly lithium, being their preferred sector.
PIVs from China were US$295,5 million, India (US$13,7 million), the United Kingdom (US$6 million) and the United States (US$164,5 million). Domestic investors weighed in with US$30,8 million, in addition to US$72,3 million in 2022.
Mr Chinamo said although ZIDA has started recording domestic investments, it will only be able to capture those licensed through the agency.
“We are getting to a stage where we are also encouraging local investors to register with us, and once they register with us, we are hoping we will start sharing such information. The benefits, we believe, are plentiful,” he added.
Meanwhile, ZIDA has US$30 billion worth of infrastructure projects or investment opportunities it is promoting. They include new city development, as well as water and sewerage reticula- tion.
In addition, US$30 billion worth of investment projects are lined up for urban development across the country.
At least US$3 billion is needed in the health sector and another US$3 billion in the tourism sector, according to ZIDA’s chief investment promotion officer Ms Silibasiso Chizwina. Ms Chizwina said ZIDA has set a target to bring investments worth US$4 billion into the country in 2023.
Of that amount, US$1,5 billion is expected to come from foreign direct investment, US$500 million from domestic investors and US$2 billion from reinvestments from those already invested in the country.
“These are targets based on data that we have managed to collect in the last three years as ZIDA,” Ms Chizwina said. — Business Weekly
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