via Zim envoy decries investment bottlenecks – DailyNews Live 18 November 2015
HARARE – Zimbabwe is losing investors from India to other regional countries because of an “unconducive investment environment” and will continue to be “renowned importers” if it does not reform, according to the country’s ambassador to India Maxwell Ranga.
Addressing delegates during the launch of Varun Beverages— India’s multi-million bottling plant in Harare on Friday last week, Ranga said that most Indian investors were flocking to other regional countries that have clear economic policies.
“..we have a number of Indian investors who want to invest in this country and what is required is for us to ease the way of doing business that often characterise the investment environment in Zimbabwe,” he said.
For instance under a $750 million deal struck in 2011, Essar Africa Holdings (Essar) agreed to take over Ziscosteel’s foreign debt, which amounted to $300 million, and to share the domestic debt with government, which totalled $72 million at the time the deal was struck, based on the equity structure.
But the troubled deal is yet to be implemented amid protracted re-negotiations.
And in light of this Ranga said Zimbabwe will remain the biggest loser.
“If we delay in coming up with a conducive, business environment that expedite the investment processes, that has no bottlenecks or elephants on the road we will continue to lose the same investors to other countries”.
The state-of-the-art bottling plant in Harare is expected to create thousands of downstream jobs.
Ranga believes it is just a tip of the iceberg of better things to come, that is if the country reforms on its policies.
Despite being endowed with vast natural resources and a relatively educated labour force, Zimbabwe is struggling to attract meaningful foreign direct investment due to controversial policies such as the Indigenisation Act that forces foreign-owned firms to cede 51 percent shareholding to locals.
Latest statistics from the United Nations Conference on Trade and Development show that Zimbabwe’s foreign direct investment has remained embarrassingly low at $545 million compared to other regional countries such as Mozambique.
According to the report, South Africa was the biggest recipient of foreign direct investment in southern Africa last year raking in $5,7 billion, Mozambique $4,9 billion, Zambia $2,4 billion, Malawi $130 million and Swaziland $13 million.
Last month the country launched a National Competitiveness Report in an effort to attract the elusive foreign capital.
Vice President Emmerson Mnangagwa, who was the guest of honour during the launch, said Zimbabwe is seeking to reposition itself as a favourable investment destination.
“Most investors rely on such reports in making decisions on investment destinations. This explains our current efforts as evident from the measures and strategies which we are implementing to ensure that we improve on our ranking,”
“The ZNCR provides historic benchmarking for the first time and can go with the consensus around achieving Zimbabwe’s prosperity.
“This is critical in areas which need urgent intervention to enable Zimbabwe’s economic exploits to achieve the robust economic growth target of seven percent per annum in the national blueprint ZimAsset,” said Mnangagwa.