$1,2bn Dangote projects licensed

via $1,2bn Dangote projects licensed | The Herald October 27, 2015

Lloyd Gumbo Senior Reporter—
THE Zimbabwe Investment Authority has issued the Dangote Group with licences for three projects worth $1,2 billion, paving way for Nigerian billionaire Mr Aliko Dangote to start implementing business deals agreed with Government earlier this year. The three projects are a cement manufacturing plant, a coal mining venture and an energy or power plant using coal off take production.

The Dangote Group has interests in logistics, manufacturing and power generation. The issuance of the investment licences follows a visit to Zimbabwe last month by Mr Dangote and his team to tie loose ends to investment deals agreed earlier. During the visit, Mr Dangote expressed interest in coal mining, cement manufacturing and power generation.

In an interview with The Herald last Friday, Zimbabwe Investment Authority chairperson Dr Nigel Chanakira confirmed the issuance of the three investment licences to the Dangote Group. “From the Zimbabwe Investment Authority perspective, we have already completed the licensing of the three projects of the Dangote Group,” he said.

Dr Chanakira said ZIA was excited about the development. “Investment licences were issued for the cement manufacturing plant, the coal mining venture and the energy or power venture which will be using coal off take production,” he said.

“There is also a possibility of the coal mined being shipped out through to the Zambian operation and then further up to the Congo. For us, we are excited because it means greater exports.” Dr Chanakira said the Dangote Group’s investment would greatly benefit Zimbabwe’s construction industry.

He said construction of a cement production plant would likely reduce the price of the commodity. “Without any shadow of doubt, from all indications this will be the largest plant, so it speaks to the dynamics in terms of competitive pricing in cement and the construction industry,” Dr Chanakira said. “Generally, housing building costs must come down.

“The licensing total amount was $1,2 billion and that adds a punch because at the end of September we are now talking of $2,9 billion worth of investment licence approvals in total that will come through.”

Dr Chanakira said the Dangote Group would decide whether to go it alone or enter into joint ventures with existing licensees in coal production and power generation.

He said ZIA wanted all licensed investors to start work immediately. “What we need now are very strong follow-ups to help anybody who has been licensed to make sure those licences are used and that they translate into real investment,” said Dr Chanakira.

“In the past, we have been criticised that we approve (projects) and then people do not come. If you look at the trend, even in 2014, we have had the largest inflow in terms of foreign direct investment since 2006. In 2006 we had $444 million, last year we reached $545 million. This year, the jury is still out. The year has not ended, but we are hoping that our numbers will go up to at least $3 billion.”

Dr Chanakira said they were aware that some people had applied for investment licences as a way of getting resident permits. He said ZIA was now meticulous in verifying and following up on licensees. Dr Chanakira said Government was committed to improving investment terms such as the ease of doing business by reducing bureaucratic red tape.

He said the Office of the President and Cabinet made a commitment to coordinate all ministries and departments to facilitate the ease of doing business in the country. “They have made a commitment that they will coordinate all ministries and all reporting authorities including ZIA in order that all of us speak the same language and, therefore, we embarked on the rapid results approach which will be concluded on December 21, 2015,” said Dr Chanakira.

“What the OPC has said to all ministries, parastatals and regulators is that by the 21st of December, if what we agreed on as a programme does not take place, then heads must roll. “In other words, there is full commitment and this commitment was recorded when His Excellency, the President announced in Parliament that by the 21st of December this year, the One-Stop-Shop will be effected.

“We have five working groups who are looking at the different areas like how to start a business, the minority protections, the insolvency laws in terms of closing up a company, recommendations for a new Act which is simpler than the Private Limited Companies Act which within itself is archaic and difficult to administer for start-up companies and in the winding up of companies. So those reforms are what we have committed ourselves to.”

Dr Chanakira said there had been a paradigm shift in investment as those who were coming in were more interested in the manufacturing sector than mining. He attributed the changes to the multi-currency regime and pronouncements by Government that the regime was here to stay.