THE Zimbabwe Investment Authority (ZIA) has accused Finance minister Patrick Chinamasa of being “clumsy” in policy implementation, which has contributed to a huge gap between signed investment projects and their implementation.
Source: Chinamasa clumsy on policies: ZIA – NewsDay Zimbabwe October 13, 2016
BY TATIRA ZWINOIRA
Speaking at the National Economic Consultative Forum symposium at a hotel in the capital yesterday, ZIA chairman, Nigel Chanakira said the ministry seemed not to know the gap between signed investments proposals to actual investment.
“What would local and foreign investors look for? They would look for a cohesive social fabric and value system (corporate governance), political stability, and policy consistency. We cannot, for crying out loud, have the Finance minister make an announcement one week and the following week, supposedly, reverse those same decisions, we cannot be that clumsy. The Bible says ‘selah’, which is ‘pause and think’, so we cannot be that clumsy. Something somewhere has gone wrong in terms of our system,” he said.
“We have no fiscal space, so we are crowding out the private sector. In reality, 40% of every dollar that has been saved, or 40 cents on a dollar, has been channelled and found its way back to government — classic crowding out.
Clearly, there is an uncomfortably huge gap between projects approved and the actual realised projects.
“The number of projects that have been approved did not see the light of day due to various reasons, including bureaucracy, corruption, and the perceived political risk.”
Chanakira said 2015 saw a record amount of foreign delegations, but in terms of implementations, nothing was done to date.
This comes as ZIA says projects worth $12,59 billion were approved between 2011 and 2015, but only $2,15bn has actually been realised in foreign direct investment.
The call for policy consistency comes as the country is ranked 125 on the competiveness index, making other regional countries more attractive.
The country is ranked 155th on the World Bank ease of doing business ranking.
Government’s reversal of measures to contain the wage bill — which is accounting for 97% of revenue — and impending bond notes have left many local and foreign investors hesitant in releasing money for projects.
A few months back, after an investment-seeking tour of Europe, Chinamasa noted investors were hesitant, expressing interest only on counters listed on the Zimbabwe Stock Exchange.
Between January and June this year, foreigners acquired shares worth $40 million compared to $71m during the same period last year.
“Investment is not coming here, not because of political risk; our problem is inconsistencies in economic policy.
If we have good economic policies, we will attract investment. As an economist, I must be very frank, there are certain areas, where there are good economic policies to achieve the same objectives, but we choose other economic policies,” economist, Ashok Chakravarti said.
He said Statutory Instrument 64 of 2016 was one such policy, where an alternative to promote local production could have been found by introducing subsidies.
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