THE merger of the Zimbabwe Investment Centre (ZIC) and the Export Processing Zones Authority (EPZA) has stalled project approvals due to the non-appointm
ent of a substantive chief executive and board for the merged entity.
ZIC and EPZA were last month merged to form the Zimbabwe Investment Authority (ZIA), a body expected to oversee approval of foreign investment in the country as well as license companies seeking export processing zone status.
Government merged the ZIC and the EPZA after concerns that there had been duplication of duties between the two statutory institutions.
The ZIC and the EPZA had suspended their respective businesses pending the merger which was finally done through the ZIA Bill which has since been passed into law following President Robert Mugabe’s assent.
Among institutions that were concerned about the overlapping roles was the central bank which in 2003 said the EPZA had failed to achieve its mandate, adding that a single institution could carry out the duties of the two institutions.
Sources at the new institution said there was anxiety especially among staff as their fate was unclear and could only be determined by a new board or chief executive officer.
The ZIC sources said there had been delays in project approvals as Industry and International Trade minister Obert Mpofu was reluctant to announce a new board, although indications were that he was canvassing for possible candidates before putting the names before cabinet for approval.
Mpofu said he was engaged in consultations before making the board appointments, but there were strong feelings in the market that he was not treating the matter with urgency.
“We have written to various stakeholders to recommend names for appointment to the ZIA board,” Mpofu told businessdigest. “We are ready now, the ministry will soon make the ZIA operational,” he indicated without giving any timeframes.
Businessdigest understands that it would be the role of the new board to appoint a chief executive officer for the new authority, although the minister is likely to have an overbearing influence on the appointment.
Some commentators were tipping former EPZA chief executive officer Walter Chidhakwa to head the ZIA ahead of former ZIC head Richard Mubaiwa.
Apparently, Mpofu’s ministry has taken over management of the ZIA pending the substantive appointment of a head for the authority.
This, some observers said, was likely to discourage potential foreign investors who could easily be put off by government’s bureaucratic tendencies.
The ZIA Act empowers Mpofu to appoint an 11-member board in consultation with Mugabe after which a new management headed by a chief executive officer would be put in place.
“What you are seeing is just a building without decision-makers,” an official at the ZIA said, referring to the situation prevailing at the investment house.
“The transitional period (between time of the merger and operationalisation of the new body) has been too long and we are approaching the ministry for decisions even on simple issues,” the official said.
The official added: “Mpofu is running the show. There is a team from the ministry that is overseeing the operations, but you know the red tape in government. Potential investors prefer quick decisions because they have many options.”
Zimbabwe, isolated from the international community, has been shunned by foreign investors who view it as a pariah state in the absence of sound relations with major Western donors.
The country has experienced constrained investment inflows since 2000 when government embarked on its controversial agrarian reforms which, together with political violence precipitated targeted sanctions against Mugabe and members of his regime by the Western community.
This forced government to adopt a “Look East” policy under which Zimbabwe has sought financial assistance and investments from the Asian community, mainly China.
Economic analysts said China had benefited more from Zimbabwe’s foreign investment policy than Zimbabwe had benefited from Chinese investment.
Zimbabwe has been flooded by cheap Chinese products that have threatened the survival of local industries, already ailing from a plethora of economic problems like foreign currency and fuel shortages.