via Zimbabwe Investment Authority approves over $500m projects November 19, 2013 by Tarisai Mandizha NewsDay
THE Zimbabwe Investment Authority (ZIA) has approved investment projects worth $570,5 million for the nine-month period to October this year mainly driven by investments in the mining sector.
According to the latest statistics from ZIA, 137 projects were approved, creating employment for 7 244 people in the period under review. Experts say the easing of empowerment regulations by the Zanu PF government following the July 31 elections is expected to ease investor fears. Zimbabwe are currently ranked one of the lowest investment destinations.
The mining sector received investments worth $179,5 million for 55 projects, followed by manufacturing with $151,3 million for 51 projects, services sector was $99,1 million for 21 projects and the construction sector received $129,5 million for six projects.
Only two projects were approved in the tourism sector with a value of $3,4 million, while the transport sector had one project with a value of $5,3 million and Agriculture had one project valued at $2,5 million.
In the period under review, Zimbabwe received foreign investment worth $87,2 million from seven projects which created 402 jobs while in joint investments Zimbabwe received $483 million from 130 projects and 6 842 jobs were created.
During the period under review Zimbabwe export earnings totalled $306,3 million.
According to the Mid-Term Fiscal Policy statement by former Finance minister, Tendai Biti, domestic investment was primarily limited by the liquidity challenges prevailing in the economy.
“. . . Foreign direct investment was mainly constrained by perceived risks associated with elections as the indigenisation and economic empowerment regulations, all of which have seen investors adopting a cautionary attitude,” Biti said.
Biti said private investment was projected at 6,3% of the Gross Domestic Product in 2013, on the other hand public investment originally target of 4,4% remains low and unachievable due to over-crowding of unsustainably high recurrent expenditures — 32,6% of GDP.
Biti revised the year-end economic growth rate to 3,4% from the projected 5% due to political uncertainty after the polls. The projected economic growth decline was also reflected by a slowdown in growth of aggregate demand, which is now projected to grow at 7% in 2013, down from the original forecast of 12%.
Experts say Zimbabwe’s Foreign Direct Investment (FDI) inflows should double within the next five years in order to achieve the 7,3% annual economic growth rates projected in the new economic blue print. According to the United Nations Conference on Trade and Development (Unctad) FDI flows into Zimbabwe increased slightly by 3,25% to $400 million last year from $387 million in 2011. FDI contributed 17,7 % to the country’s total GDP during the period under review.
The African Development Bank estimates that Zimbabwe’s infrastructure, a key enabler for FDIs, needs $14 billion to rehabilitate. The country has an estimated debt of $10,7 billion, which represents 110% of GDP.