Zim lags in FDI

year, compared with an estimated US$10 billion realised by other regional economies.
Angola, emerging from the ravages of a civil war, drew US$2 billion FDI. It was followed by Zambia and South Africa, at US$1 billion apiece, Namibia at US$888 million, Mozambique US$789 million and Malawi US$140 million.

But Zimbabwe could only manage a paltry US$105 million in FDI after approving a total of 450 investment proposals worth US$2,8 billion during 2010.
Investors continue to shun Zimbabwe despite its vast potential as a frontier market emerging from a decade-long economic instability.
Addressing a media briefing last Thursday, Economic Planning and Investment Promotion Minister Tapiwa Mashakada attributed the poor inflows to negative perceptions about indigenisation and country risk profile.

Indigenisation is Government’s economic empowerment programme aimed at bringing previously marginalised locals into mainstream economic activities.
But Minister Mashakada said in the face of scepticism from perceptions on indigenisation, the country would leverage on other comparative drawcards.
These include unrivalled mineral wealth, a stable dollarised economy, lowest inflation in Sadc and a highly literate and skilled workforce, among others.

“Investors are adopting a wait-and-see attitude. They are not impressed by the 51 percent policy. The 51 percent policy is the single biggest factor,” he said.
“The investors are saying that if ‘I come to Zimbabwe you will take 51 percent’ and they would lose control of the investment,” said Minister Mashakada.

“But we will take advantage of our other strengths, such as dollarised economy. Zimbabwe is the only dollarised economy in Africa. If you come and invest a dollar in the economy, you can get a dollar (profit),” he said.

Minister Mashakada added that the country had the biggest drawcard in the form of its vast mineral resources base that includes diamonds, platinum and gold.
But it would adopt a multi-pronged approach to attract foreign investment and this would also entail finalising outstanding bilateral investment agreements.

Thus far, said the minister, Parliament had ratified Bilateral Investment Promotion and Protection Agreements with India, South Africa, Iran and Botswana.
Expectations are that the Ministry of Finance would now move to unlock the US$70 million Botswana facility for industry after the Bippa with that country was ratified.
Apart from the Bippas, which guarantee safety of foreign investments, Government seeks to improve Zimbabwe’s business culture and world competitiveness ranking, as measured by the World Bank and the World Economic Forum.

This involves streamlining the investment approval process, cutting costs of investing and making the process less strenuous and using the latest technology.
But Zimbabwe would promote FDI inflows, modelling them along key national priorities as enunciated in the new economic blueprint, the Medium Term Plan.

The economic plan spans the five-year period 2011 to 2015.