Africa Moyo Business Reporter
The mining sector remains the most favoured investment portfolio in the country, with 57 applications out of 153 approved in the first 11 months of the year, statistics from the Zimbabwe Investment Authority (ZIA) reveal.
Zimbabwe has known reserves for 66 minerals including gold, diamonds, platinum, chrome and asbestos, among others, making the mining sector key attraction for investors particularly foreigners.
From January to November 30, 2017, ZIA approved investment proposals worth $1,5 billion, which is slightly below what was achieved in the same period last year.
The decline is largely attributable to the huge energy investment worth $1,4 billion for the expansion of Hwange Thermal Power Station.
ZIA therefore says it is unfair to compare the value of investments approved this year and last year in the first 11 months. Of the approvals processed this year, the mining sector had 57, with a combined value of $576 million.
Investors that have expressed interest in the country’s mining sector are from 13 countries including Bulgaria ($156,6 million); China ($163,6 million); the St Kitts & Nelvis ($5,6 million); Sudan ($800 000); United States of America ($13,2 million); United Kingdom ($80,4 million); Singapore ($52,5 million) and South Africa ($4,7 million).
The mining sector is Zimbabwe’s biggest foreign currency earner, raking in $1,7 billion in 2016. The Chamber of Mines of Zimbabwe mining sector report says $400 million is required next year for the sector to fund capital projects.
Apart from the mining sector, more investors are interested in the manufacturing sector, in which 48 approvals worth $480 million were also made. Investment projects worth $152,4 million were also approved for the services sector.
Other sectors that drew the attention of investors were construction (six); agriculture (six); energy (two); transport (one).
Approvals in the manufacturing sector are worth $480 million; agriculture ($12,8 million); construction ($106 million); services ($152,4 million); tourism ($16,8 million) and transport ($300 000). But despite recording two approvals, the energy sector’s projects are worth $162,5 million, indicating that the sector is capital intensive, and therefore not a favourite for many given the challenges associated with obtaining funds in most parts of the world.
ZIA chief executive officer Mr Richard Mbaiwa, told The Herald Business last week that: “From January to November 30, 2017, so far we have accepted 153 investment proposals with a total value of US$1,5 billion. For us it is quite a significant amount . . . manufacturing has many projects but their value doesn’t compare with energy.”
Investor appetite is expected to grow in the country driven by a deliberate attempt by Government to improve the ease of doing business. So far, eight laws out of 14 — including the Public Procurement and Disposal of Public Assets Act and the Movable Property Securities Interests Act — have been gazetted as part of addressing the doing business environment. President Emmerson Mnangagwa said foreign direct investment would be key, together with agriculture, in turning around the fortunes of the economy.