There has been a high number in terms of licenced or approved investments by ZIA, the expectations going forward is that even the number of implemented projects will also increase
ZIMBABWE’S approved potential investment projects more than doubled to nearly US$1 billion this year from US$451 million last year, although the majority have not taken off amid concerns that investors are fretting over country’s hostile investment climate, official figures have shown.
By Hazel Ndebele
As Zimbabwe continues to face a trade deficit that has worsened the country’s liquidity and cash crisis, government is now desperate to bring in fresh capital from greenfield and brownfield investment to sustain the economy.
Statistics from Zimbabwe Investment Authority (ZIA) show that during the period January to August this year the authority approved 102 projects which were less than last year’s, but more valuable at US$920 million. During the same period in 2016, the investment authority had approved 112 projects valued at US$451 million.
Despite a huge number of approvals from ZIA, Zimbabwe’s investment climate remains choking with toxic policies, policy inconsistency, high political risk and liquidity crunch being part of the major reasons why investors continue to shun the country. Government is also taking time to implement ease of doing business reforms and as such driving away investors.
ZIA chief executive Richard Mbaiwa told the Zimbabwe Independent this week that despite this remarkable growth, some of the approved investments may not see the light of the day due to various factors.
“The statistics show that the country is beginning to attract more meaningful projects as we now have more valuable projects as compared to last year,” said Mbaiwa.
“Definitely some of the projects will be implemented, but some may not due to different reasons internally and externally. Sometimes it is the investor who may have had problems of raising capital and then they drop the project and sometimes it could be to other different reasons.
“There has been a high number in terms of licenced or approved investments by ZIA, the expectations going forward is that even the number of implemented projects will also increase.”
Mbaiwa said it can take a period of up to two years before a project is implemented, therefore projects approved from last year are still within the given implementation period.
However, the country has some projects approved a long time ago, but are yet to be implemented, for instance the Dangote project which was licenced in 2015. Zimbabwe in 2015 hosted more than 80 business delegations from several countries among them Germany, United Kingdom, France, China, Russia, Turkey, South Africa and Nigeria, but the visits did not bear fruit.
If the approved investments from ZIA bear fruit, a total of 7 000 jobs could be created, Mbaiwa said.
The 2017 statistics from ZIA show that the highest number of investment since January was awarded to the mining sector which had 38 projects valued at US$467 million. The country’s mining sector has been improving lately with gold expected to rake in US$3 billion in export earnings from US$2 billion realised last year. In 2016 ZIA approved 37 projects worth US$64 million.
Manufacturing had second highest in approved projects during the same period this year with 28 projects worth US$63 million, up from projects valued at US$25 million last year.
The other sectors which had approved investments by ZIA include services, agriculture and construction.
ZIA approved low numbers of investment in the tourism, energy and transport sectors.
Last year Zimbabwe attracted US$319 million in Foreign Direct Investment (FDI) inflows a plunge from US$421 million in 2015.
Zimbabwe still lags behind its regional peers such as Mozambique, South Africa and Zambia who registered US$3 billion, US$2,3 billion and US$469 million respectively in FDI inflows last year.
In 2014 the country’s FDI amounted to US$545 million, showing that investment amounts have been decreasing over the last few years.