The year of attracting big bucks
GOVERNMENT is ramping up the drive to attract domestic and foreign investment, create employment and strengthen Zimbabwe’s industrial base through a raft of policy and legal interventions. The measures are projected to see FDI contributing 25 percent of GDP by the end of 2017.
The measures, which include harnessing the potential of the recently legislated Special Economic Zones and implementation of aggressive investment promotion strategies, will underpin a wholesale makeover of the local investment landscape over the next 12 months.
The drive is being co-ordinated by the Office of the President and Cabinet through economic ministries to ensure efficiency and high level competency in implementation.
As part of the interventions, President Mugabe will appoint new boards to head the Zimbabwe Investment Authority and the Special Economic Zones Authority - two key conduits of investment promotion - during the first quarter of 2017.
The two institutions will be central to facilitating the inflow of investment following generally poor performance in terms of attracting new capital over the last two years.
In 2015, Zimbabwe attracted US$545 million in FDI, which though being the highest since 2009 pales in comparison to figures recorded by South Africa, Angola and Zambia who attracted US$5,7 billion, US$3,8 billion and US$2,4 billion respectively.
According to official projections for 2016, Zimbabwe anticipated to surpass US$1 billion in investment inflows on the back of deals signed with Chinese, Russian and Indian investors.
The term of the Nigel Chankira-led ZIA board expired towards the end of last year and the Ministry of Macro-Economic Planning and Investment Promotion has submitted a list of proposed new board members for appointment by the President.
The new board will be in charge for the next four years.
On the proposed lists are bankers, economists, lawyers, professors and prominent businesspeople.
The Sunday Mail has gathered that veteran banker and former Reserve Bank of Zimbabwe Deputy Governor Mr Richard Wilde is tipped to chair the board.
Mr Wilde, a businessman of note, has previously served on various boards including that of the then Zimbabwe Investment Centre, Astra Corporation and the Zimbabwe Revenue Authority.
Current RBZ Deputy Governor Dr Kupukile Mlambo is also expected to sit on the 11-member board.
In addition, the President will name an 11-member board for the SEZ Authority to kick-start full-scale operations of the institution.
SEZs are key instruments in boosting economic growth through establishment of geographical locations where an oversight management body offers special trade incentives to firms that chose to locate themselves within the zones.
The new SEZ law places particular focus on export oriented investments, value addition and beneficiation-based industries, investments that promote linkages with local industry.
It also entrenches property rights within the zones as enshrined in Section 71 of the Constitution, protecting businesses in the zones from compulsory acquisition.
The authority is responsible for establishing SEZs, attracting FDI to the zones, regulating all SEZs and granting investment licenses to investors. The authority will grant investors licenses valid for 10 years with an option to extend.
Already, Government has invited applications from companies keen to operate under the SEZ concept.
To further entrench the drive, the Investment Promotion Ministry has already decentralised its mandate after establishing four new regional investment promotion offices in four major urban centres across the county.
Regional investment offices have been set up in Masvingo, Bulawayo, Bindura and Mutare to assist in attracting investment to those provinces.
In addition, Government will launch a first of its kind “Invest in Zimbabwe Handbook” to catalogue investment opportunities in various sectors.
Zimbabwe remains the only country in the Sadc region that does not publish an annual investors’ handbook.
Secretary for Investment Promotion Dr Desire Sibanda told The Sunday Mail that the National Diaspora Policy, which was approved last year, would be a key channel for investment.
“In 2016, Government passed the Diaspora Policy which will attract investment from our fellow countrymen living in foreign lands.
“As you may be aware, we have over 2,8 million Zimbabweans living in the Diaspora and we need to harness their potential into investment locally through the Diaspora Bonds.
“Also our Ministry visited three countries - the United Kingdom, Canada and South Africa where we held investment meetings in those countries with Zimbabweans living in the Diaspora.
“We also organised an investment conference with the Ministry of Finance and the RBZ where we explained the investment opportunities that are abundant in the country.
“We also passed the SEZ Act to attract FDI and the Ministry has set a target of FDI contributing to 25 percent of our GDP.
“The ministry also sent a delegation to Russia where we signed a Bilateral Investment Promotion and Protection Agreement and met businesspeople in Moscow who expressed interest in investing in a number of sectors.
“The ministry has also set up four regional investment offices as part of decentralising investment promotion to other centres across the country.
“We now have investment offices in Masvingo, Bulawayo, Bindura and Mutare; and our aim is to attract direct investment into those provinces.”
He said finalisation of the setting up of the One-Stop Shop Investment Centre would remove a lot of unnecessary bureaucracy around setting up new businesses in Zimbabwe.
“Already we have recommended to the (Office of the President and Cabinet) a list of potential board members for ZIA and are confident that a new and highly competent board will be announced during the first quarter of the year.
“We have recommended people with exceptional credentials for appointment to the ZIA board, who include bankers, economists, lawyers, professors and high level businesspeople.
“We are also training our staff at ZIA on how to handle investors because we no longer want a situation where investors are moved from pillar to post which often frustrates them.
“In 2017 we will also launch an Invest in Zimbabwe handbook, which shows areas where there are investment opportunities in Zimbabwe.”
ZIA chief executive Mr Richard Mbaiwa said the authority would over the next 12 months focus on decentralising investment.
He said the authority was compiling a list of bankable projects for potential investors, adding: “We are training local authorities in terms of promoting investment in their jurisdictions. This includes how they can package investment opportunities which are available in their areas.
“We are also identifying specific bankable projects which specific companies could have interest in and try to convince them to invest in those projects.
“Lastly, with the promulgation of the SEZ Act we anticipate that there will be a lot of interest from investors in operating in those areas.”