Zim-Botswana BIPPA signed

and Protection that will unlock more trade and investment windows between the two countries.
The signing of the treaty has immediately made available the 500-million Pula (US$76 million) credit facility pledged by Botswana in 2009. This is for both equity and working capital.
Economic Planning and Investment Promotion Minister Tapiwa Mashakada signed for Zimbabwe while Ms Dorcas Malesu, Botswana’s Minister of Trade and Industry, signed for her government.
Parliament is now expected to ratify the agreement a process that Botswana has already done.
Minister Mashakada said the signing would enhance investor confidence in the country as a safe and viable investment destination through guaranteeing the safety of their investments.
He said Botswana was the country’s closest trading partner and the BIPPA would enhance economic co-operation that would be manifest in the increase of volumes of trade and investment between the two countries.
“Botswana is a strategic neighbour, capable of boosting investors confidence to invest in Zimbabwe,” said Minister Mashakada.
“As such the signing of this BIPPA, following another one signed with South Africa will continue to stir interest from the Sadc region and the world investment community and will continue to correct the way the Zimbabwe investment environment has been viewed in the past few years.”
Speaking to journalists after the signing, Ms Malesu said the line of credit facility would attract an interest rate of nine percent. She added that Botswana was working to diversify its economy, now based on diamond mining. She and urged Zimbabwean companies to exploit the existing opportunities.
BIPPAs guarantee the safety of foreign investments against expropriation and nationalisation. It also provides for procedures for compensation when such acts occur.
The agreement would also see the formation of new joint ventures between Zimbabwean and Botswana companies and increased investment levels.
According to Ms Malesu, about 48 Zimbabwean companies with a total investment of P206 million are participating in Botswana, creating 1 243 jobs downstream. Seventeen of these are joint ventures.
“The BIPPA sets the pace for a practical and meaningful regional integration process envisaged in the wider Sadc agenda, in particular the Sadc Protocol on Finance and Investment.
“To the rest of the world, it must be a showpiece of what sister states can do to turn their latent energies into wealth creation and new job opportunities through enhancement of trade and industry,” she said.
She added that her government was pinning its hope on the successful “operationalisation” of this treaty.
“We see it as a vehicle through which, our business ties would grow stronger. It should create opportunities for emerging entrepreneurs to play a leading role in the economic development of our individual countries,” she said.
Zimbabwe is also negotiating BIPPAs with Namibia, Zambia, Tanzania, the DRC, India and South Korea and is pursuing a 500 million rand facility with South Africa.
Finance Minister Tendai Biti said the signing of the Zimbabwe-Botswana BIPPA shows a strong and symbiotic relationship between the two countries and it should be safeguarded and developed.
The US$76 million facility comes at a time when liquidity is the biggest constraint to the country’s efforts to transform the economy from exporting mostly raw materials to finished goods.
It is expected the accord will raise industrial capacity, which averaged 10 percent in 2008 – rising to about 53 percent last year – to 85 percent by December this year.
Zimbabwe is targeting the economy to grow by 5,7 percent in the manufacturing sector this year, from the 2,7 percent achieved in 2010.
The country is also targeting gross domestic product of 9,3 percent this year from 8,1 percent last year and expects to raise Foreign Direct Investment to 15 percent of GDP this year.
Zimbabwe’s GDP, the value of goods and services produced by a country in a year, was perched at US$5,7 billion and is projected to rise to US$8,03 billion this year.