Source: A peek into the newly-formed Zida | The Herald February 13, 2020
Lovemore Chikova Development Matrix
The establishment of the Zimbabwe Investment and Development Agency (ZIDA) following the signing of the attendant law by President Mnangagwa, which was published last week, has generated a lot of interest.
Social media platforms have been awash with comments by people from various walks of life wondering how this new organisation will operate and what its benefits will be.
The signing of the ZIDA Act last week by President Mnangagwa signified a new chapter in how the country has advanced in the ease of doing business.
The Act sets up the agency which is going to spearhead how the country will deal with both local and foreign investors.
It is envisaged that the new agency, because of the favourable conditions it offers, will result in the attraction of more foreign direct investment, thus positively impacting economic growth and development in general.
An important factor is that ZIDA establishes a one-stop-investment services centre, while repealing the Zimbabwe Investment Authority Act, the Special Economic Zones Act and the Joint Venture Act.
Provisions of the repealed entities, which used to deal with investors separately, will be incorporated under one roof in ZIDA, and this will lessen the burden on investors and make it much easier for them to register their businesses and start operations.
This article presents what the ZIDA Act says about this new organisation and how it will help with the smooth handling of investments.
Functions of ZIDA
This new investment agency will be the sole organisation dealing with investment in Zimbabwe, with all those intending to bring their capital having to go through this institution.
According to the ZIDA Act, the agency is tasked with carrying out deliberate efforts through various means to promote, plan and implement investment promotion strategies for the purpose of encouraging investment by both domestic and foreign investors.
In the same spirit, ZIDA will implement and coordinate investment programmes and investment promotion-related activities.
The new agency will have to facilitate entry and implementation of investment projects, while assisting investors in all appropriate investment-related support that may be required.
Investors can only be attracted to Zimbabwe when they are aware of what the country offers, and it will be the duty of ZIDA and interested stakeholders to use modern communication methods to promote Zimbabwe as an attractive investment destination.
It will also ensure facilitation across all sectors of the economy, dialogue and other consultations between the public and private sectors to improve the investment climate for both domestic and foreign investment.
ZIDA is mandated to deliver investor after-care services, including, but not limited to post-establishment facilitation services that support investment retention and expansion.
The new agency will have to maintain records related to investment certificates, work permits, visas and any other documents pertaining to the licensed investor.
After realising that there were too many organisations dealing with investment individually, the Government has decided that through ZIDA, all this work be done under one roof and from a single command centre.
The previous system was cumbersome and led to frustration of investors who had to hop from one office to another to process their papers.
Some investors would get fed up of the long waiting period, and would just quit and consider other destinations that were efficient in ease of doing business.
The OSISC is composed of various desks representing several areas important to the facilitation of investments.
There will be a desk for the general investment division of the agency, another to represent the unit in the agency responsible for public private partnerships and another to represent the unit in the agency responsible for special economic zones.
All organisations that used to deal with investors in one way or the other will have their desks within the OSISC, which is an important milestone for service delivery.
These organisations include the Immigration Department, Zimbabwe Revenue Authority, Environment Management Agency, Reserve Bank of Zimbabwe, Companies Registration Offices, National Social Security Authority, Zimbabwe Energy Regulatory Authority, Zimbabwe Tourism Authority and the Energy Regulatory Authority.
Government ministries dealing with investors will also have desks within ZIDA under the OSISC.
These ministries include those responsible for mines and minerals; local authorities; labour and others deemed necessary depending on the issues at hand.
ZIDA will be decentralised to all provinces where the agency is mandated to establish one-stop shops at different venues to make it easy for investors interested in particular areas.
Guarantees for investors
ZIDA guarantees that investors may invest in, and reinvest profits of such investments into any and all sectors of the economy of Zimbabwe, and in the same form and under the same conditions as defined for Zimbabweans under the applicable laws and regulations of Zimbabwe.
It is expected that ZIDA will accord foreign investors and their investments the same treatment with local investors under the same circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of their investments.
But this will take into consideration some of the provisions of the Indigenisation and Economic Empowerment Act, the Land Commission Act and the Legal Practitioners Act. The agency will also ensure that privileges enjoyed by Zimbabweans will remain and be considered when it comes to the treatment of investments.
Investors will be allowed to appoint any person, regardless of their nationality, as a senior manager, technical and operational expert or advisor with respect to the investment, as long as they are qualified.
But this depends on the provision that there is no person domiciled within Zimbabwe with the same qualifications, skills and knowledge as are required for the posts.
The investors will be guaranteed equal access to the law and protection of their investments.
Another milestone being brought by ZIDA that will safeguard investors’ interests is that no investments will be nationalised or expropriated.
The investors will operate freely without being compelled to cede any investment to another person, either directly or indirectly through measures having an effect equivalent to nationalisation or expropriation.
But there will be an exception for a public purpose, in accordance with due process of law, but in a non-discriminatory manner and on payment of prompt, adequate and effective compensation.
If the compensation is to be paid, it shall be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place or, where the value of the property was negatively impacted on by notice of imminent expropriation immediately before such notice.
ZIDA dictates that all laws, regulations, procedures and administrative rulings that affect or pertain to investments or investors shall be promptly made publicly available.
Policies that affect investments or pertain to investors which are not expressed in laws and regulations, as well as adjudicatory decisions in respect to any matter covered by the Act shall be made publicly available in a timely manner.
The investors will, without restriction or delay, and in a freely convertible currency, transfer the following funds into and out of Zimbabwe: (a) contributions to capital, such as principal and additional funds to maintain, develop or increase the investment;
(b) proceeds, profits from the asset, dividends, royalties, patent fees, licence fees, technical assistance and management fees, shares and other current income resulting from any investment under ZIDA;
(c) proceeds from the sale or liquidation of the whole or part of an investment or property owned by an investment;
(d) payments made under a contract entered into by the investor or investment, including payments made pursuant to a loan agreement;
(e) payments resulting from any settlement of investment disputes and earnings and other remuneration of foreign personnel legally employed in Zimbabwe in connection with an investment.
Obligations for investors
The investors will be expected to abide by provisions of the ZIDA Act and other legislation in force in Zimbabwe, as well as by their contractual undertakings.
They will have common obligations, including those relating to the preservation of the environment, maintenance of independent accounts and records in respect of the given enterprise in accordance with the international accounting standards.
The investors will also be expected to make sure that the products produced, works conducted and services provided by them comply with national and international standards and respecting the national heritage, customs and traditions of Zimbabwe.
Next week we will look at the other part of the ZIDA Act with regards to how investors will apply for licences, how they will renew them and how they will register them.
How incentives will be set will also be explored, together with conditions under which a licence can be suspended or terminated.
It will also be important to look at how special economic zones will operate under ZIDA, and how investors can apply and get licences to do business in these zones.
Public private partnership that were mainly being handled by the Joint Venture Unit will continue to exist under ZIDA and how they will operate under the new law will also be looked at next week.