HARARE - Zimbabwe expects to double its current trade with Russia from the current $30 million annually following the signing of a Bilateral Investment Promotion and Protection Agreement (Bippa) on Sunday.

Economic Planning and Investment Promotion minister Tapiwa Mashakada said the Bippa signed by Russian Industry and Trade minister Denis Mantrurov will increase the flow of trade between the two countries and boost foreign exchange earnings.

“Investments by Russian companies in Zimbabwe through joint venture partnerships will enhance inflows of foreign exchange into the economy thereby directly increasing liquidity which our economy critically needs,” Mashakada said.

“Similarly, such increased levels of investment in our economy will increase production levels in both raw materials and manufactured products thus enhancing exports and creating more job opportunities.”
He said the Russian delegation comprised companies that contributed over 50 percent to the country’s economy.

“Although our agreement covers all sectors, the Russians are mainly interested in the country’s mining sector,” Mashakada said.

He said the objective behind entering into Bippas was to intensify economic cooperation between countries through creating conditions favourable for investments by investors of either state in the territory of the other state.

“This is in recognition of the fact that the encouragement and reciprocal protection of such investment under an international agreement is conducive for the stimulation of investment and trade between the two countries,” Mashakada said.

“The essence of the Bippa is to enhance investor confidence in our two economies (namely Russia and Zimbabwe) as safe and viable investment destinations.

“This will be achieved through guaranteeing the safety of these investments against political risk such as expropriation and nationalisation,” he said.

The Economic Planning minister said his ministry was in the process of finalising other agreements with other African countries.

“To strengthen regional cooperation, efforts are underway to finalise investment agreements with Namibia, Zambia, Tanzania, Democratic Republic of Congo. These steps will see us playing an important role in promoting regional trade,” he said.

“In addition to signing the Bippa with South Africa in 2009 and Botswana in 2011, government has also embarked on an initiative to negotiate and sign Bippas with many other countries whose investors have shown a willingness to invest in Zimbabwe as well as those countries where local companies have shown willingness to invest,” the minister said.

He said the target for the government was to increase investment to about 25 percent of gross domestic product by 2015.

“Investment therefore plays a key role in the economy of any country, Zimbabwe included.

The Global Political Agreement (GPA) (Article 111) on the restoration of economic stability and growth in Zimbabwe, the Short-Term Emergency Recovery Program (Sterp) and the Medium-Term Plan (MTP) all recognise the fundamental objectives of promoting investment in Zimbabwe,” Mashakada said.

Bippas provide for the reciprocal promotion and protection of investments, most favoured nation treatment, compensation mechanisms in the event of expropriation or nationalisation and mechanisms for dispute resolution between states and investors should these arise.