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Zimbabwe is attracting foreign direct investment that is not consistent with its potential and must align its investment initiatives with medium term policy target of $1 billion FDI annually, a Cabinet minister has said. Industry and Commerce Minister Mike Bimha made the remarks yesterday at the start of a two-day strategy meeting to review the ease of doing business in the country.
The workshop running under the theme “Empowering and Sustaining Zimbabwean Business through an enabling Environment” was jointly organised by the Government and the World Bank Zimbabwe.
“You will agree with me that these investment figures are not consistent with the country’s potential fellow countrymen, given the vast natural resource endowments obtaining in Zimbabwe,” he said.
“We need to align our investment initiatives to the Zim-Asset objectives of attaining investment inflows of $1 billion annually,” Minister Bimha told the delegates.
Minister Bimha said the country’s perennial poor rankings on the World Bank’s ease of doing business ratings communicated a negative message and perceptions from potential local and foreign investors.
Speaking at the same event, Deputy Chief Secretary in the Office of President and Cabinet Colonel Christian Katsande said the doing business reform agenda was meant to enable the private sector to drive growth.
“High rankings on the ease of doing business index are usually accompanied with more growth and jobs,” he said.
“The initiative, however, emphasises on private sector dynamism and civil service efficiency and integrity as key forces that should enable the economy to attain accelerated economic development,” Col Katsande said.
Col Katsande said 31 out of 47 economies in southern Africa implanted at least one regulatory reform, making it easier to do business from 2012 to 2013.
Zimbabwe is ranked 170 out 189 countries in the world on the World Bank’s ease of doing business scale while the second lowest country in the region is ranked 83.
South Africa is ranked 43, Botswana 56 and Zambia 86 on the World Bank ease of doing business rankings in 2014, as well attracting more FDI than Zimbabwe.
In 2013, foreign direct investment into Zimbabwe amounted to $400 million against $1,7 billion for Zambia and about $5,9 billion for Mozambique, signalling strong competition on the globe for investment.
This comes against the backdrop of serious economic problems marked by an unsustainable external debt, massive disinvestment, industrial decline, low productivity and growing informal sector.
Industrial productivity has fallen to an average of 30 percent amid fears that the situation in the local manufacturing sector could be worse than currently estimated.
Minister Bimha reiterated President Mugabe’s remarks in his inauguration speech that the country was turning in a huge warehouse and dumping ground for imports, killing local industry, towns and cities.
This is feared to be seriously affecting the country’s balance of payment
position, competitiveness and job creation.
Minister Bimha said it was against this background that Government had prioritised the implementation of sustainable pro-poor economic initiatives aimed at consolidating macro-economic stability and giving impetus to reviving industry, agriculture, mining and tourism.
Under Zim-Asset, Government prioritised four clusters of value addition and beneficiation, infrastructure and utilities, food security and social services.
Minister Bimha said given resource constraints, Government had come up with policy measures to buttress and boost investment into the priority areas. The policy measures include the framework on special economic zones, joint ventures and the doing business reforms targeted by the ongoing strategy workshop.
Online Reporter