Foreign direct investment into Zimbabwe grew 10-fold in the first quarter of 2018 compared to the same period last year owing largely to President Emmerson Mnangagwa’s pro-business reforms, official figures show.
Statistics from the Zimbabwe Investment Authority show that approved foreign investments, including joint ventures, stood at nearly US$1 billion between January and March compared to US$150 million at this time in 2017.
By March this year, ZIA had approved 63 investment licence applications with capacity to create 5 598 new jobs and a potential US$450 million in export earnings.
The mining sector, figures show, continues to be the biggest draw for investors with 23 licences worth a cumulative US$228 million approved by March, compared to 17 worth US$25 million last year.
The manufacturing sector is also on the up with 19 licences worth US$155 million granted — a sharp increase from the seven worth US$8 million in 2017.
While only one licence was awarded in the energy sector, it accounts for the biggest investment approved so far this year at US$345 million and will create 237 new jobs.
The services (US$112 million) and the tourism (US$77 million) sectors also recorded significant investment.
In addition to these finalised deals, President Mnangagwa’s Government has secured investment commitments worth over US$3 billion since coming into office in November last year.
ZIA chief executive Mr Richard Mbaiwa said the approved investments should not be confused with the investment commitments President Mnangagwa has secured.
“These are projects that have come to ZIA and have been given investment licences,” said Mr Mbaiwa. “There are many other projects and investments that have made commitments or signed MOUs with Government ministries, but they have not yet come to us for licensing; we have not yet recorded them in our figures.
“What happens normally is negotiations are done at Government level, the Zisco deal is a good example, and after they agree they then come here after they have finalised with Government.”
Mr Mbaiwa said the figures would likely continue rising.
“If you look at last year’s figures we only managed around US$100 million, but by the end of the year we had around US$1,5 billion, which means last year the first quarter figure multiplied by 10 at the end of the year because things accelerate as the year progresses,” he said.
“So we won’t be surprised if this figure we have had for the first quarter is to multiply by 10 come year end.
“We are also likely to see a spike in the post-election period. There has been very positive response for the investment community in terms of the message that is being put forward by the President.”
Mr Mbaiwa said merging of the country’s four investment promotion entities would ensure smooth processing of investment applications.
Government is creating a one-stop investment centre through collapsing ZIA, the Zimbabwe Special Economic Zones Authority, Zimtrade and the Joint Venture Unit in the Finance Ministry into a single organisation responsible for all investments into the country.
The Sunday Mail understands that the Ministry of Industry and Commerce is leading the crafting of legislation to collapse these entities into one, along the lines of the Rwanda Development Board.
A team of RDB executives was in Zimbabwe last week to share their experiences with Government.
The RDB is responsible for making investment decisions in all sectors and, as a result, it only takes six hours for one to start a business in Rwanda.
Chief Secretary in the Office of the President and Cabinet Dr Misheck Sibanda told The Sunday Mail that Zimbabwe was primed to follow Rwanda’s model.
“The Minister of Finance has just been announcing a raft of measures to improve our State enterprises and parastatals and one such reform is putting together Special Economic Zones, Zimtrade, the Joint Venture Unit in the Ministry of Finance and the Zimbabwe Investment Authority.
“We see this as a way of creating a one- stop shop. What is left is what the Rwandese are already doing, in other words they have empowered such an entity.
“So for us the lesson is for such an institution to be effective it has to be empowered. We will be working with the Minister of Industry and Commerce to see that we are moving in that direction so that is a major thing that will assist in bringing lots of investment because it is imperative that we reform since there is likelihood of getting a massive inflow of investment owing to the President’s trips and emphasis on Zimbabwe’s need to attract more investment.”