Online Reporter
Nqobile Bhebhe
Zimpapers Business Hub
THE Zimbabwe Investment and Development Agency (ZIDA) has noted a surge in investor appetite for lower capital-intensive sectors such as services and technology, amid shifting preferences from previous traditional drawcards like manufacturing and infrastructure.
ZIDA said the shifting patterns had resulted in a decline in projected investment value amid the shift in sectoral focus.
In its latest report, the investment agency said there was a marked increase in the number of new investment licences issued, although the total projected investment value dipped by 10 percent compared to the same period in 2023.
“In 2024, the investment value recorded was US$8,628 billion, constituting a six percent decrease compared to the previous year, which recorded US$9,67 billion of projected investment made into the country.
“The 10 percent decrease in projected investment value suggests that the average value of individual investments has decreased,” said ZIDA.
ZIDA added that the drop does not reflect waning investor interest in Zimbabwe, but rather a changing landscape of investment preferences.
“Several factors may account for this. One possible factor is a shift in sectoral focus, with growing interest towards sectors requiring lower capital investment, such as a surge in smaller-scale service or technology-based investments compared to large-scale infrastructure or manufacturing projects,” ZIDA explained.
The global slump in lithium prices, ZIDA noted, has forced some investors to reconsider their initial capital-intensive commitments, instead pivoting towards ventures that are leaner in terms of resource demand.
The Agency also noted that the global slump in lithium prices has forced some investors to reconsider their initial capital-intensive commitments, instead pivoting towards ventures that are leaner in terms of resource demand.
“The drop in global lithium prices has also led many investors to change their plans, pivoting towards lower capital ventures,” the report added.
ZIDA acknowledged that broader economic dynamics may be contributing to more conservative investor behaviour.
“Furthermore, global or local economic uncertainties could be causing investors to adopt a more cautious approach, resulting in smaller initial investments,” said the Agency.
However, the Agency celebrated strong milestones in licensing and investor engagement, underlining improvements in investor attraction and facilitation systems.
“The issuance of 709 new licences reflects strong investor interest in Zimbabwe, signalling growing confidence in the country’s investment climate, influenced by policy reforms and sector-specific opportunities,” ZIDA said.
The Agency added that a 15 percent rise in new licence applications from 2023 was a direct outcome of enhancements to its online application platform.
“This showcases the effectiveness of the Agency’s efforts to streamline processes and improve the investor experience,” ZIDA said.
In addition, ZIDA highlighted that investors now enjoy broad access to its full-service portfolio upon registration, a factor believed to be drawing more entrants into Zimbabwe’s economy.
“Comprehensive access granted by these licences to ZIDA’s full-service portfolio remains a compelling advantage.”
However, concern remains over the dip in licence renewals, which the Agency said may reflect operational hurdles faced by existing investors.
“The decline in licence renewal applications remained a concern for the Agency. This trend suggests that some investors may have encountered operational challenges affecting their ability to sustain business activities and seek licence renewals, underscoring the need for further analysis and engagement,” ZIDA said.
Despite the dip in overall value, ZIDA insists that the country remains on a strong investment trajectory, buoyed by reforms, digitalisation and targeted investor support.
Turning to year-on-year investment trends by sector, the report shows that mining (280) continues to dominate in terms of the number of licences issued, followed by manufacturing (166) and services with 118, reinforcing their roles as key drivers of investment in the country.
The manufacturing sector has demonstrated significant growth, with a 20 percent increase from 2023, indicating rising interest in local manufacturing, likely driven by profit margins in this sector.
Consistent with the 2023 report, the energy sector continues its steady growth. The construction sector exhibits high volatility, experiencing a dramatic 48 percent increase in 2024, potentially reflecting major infrastructure projects or real estate developments.
“This surge directly supports NDS1’s emphasis on infrastructure development as a critical enabler of economic growth.
“Construction is fundamental to building and maintaining essential infrastructure, such as roads, bridges, dams and power plants, enhancing connectivity, facilitating trade and attracting investment, all key NDS1 objectives.”
