'Zim must craft clear, cohesive FDI policies'

HARARE - Zimbabwe must improve its business environment in order to attract more foreign direct investments (FDI) into the country and ensure economic and sustainable development, an investment authority top executive has said.

The Zimbabwe Investment Authority (Zia) chairman, Nigel Chanakira, last week told delegates attending a 2015 business conference — organised by the Zimbabwe National Chamber of Commerce (ZNCC) — the country must quickly come up with economic reforms that meet investors’ needs.

“Every country in the world is competing for FDI. As such, there is need for Zimbabwe to craft a clear and cohesive FDI policy with articulated commitments to sustainability,” he said.

This comes as the country has been missing out on the FDI boon in Africa due to its controversial indigenisation policy that compels foreign-owned firms to cede 51 percent share holding to locals.

Statistics recently released by the United Nations Conference on Trade and Development revealed that South Africa was the biggest recipient of FDI to Africa last year, taking almost a fifth of an estimated $54 billion, while Mozambique attracted a record $4,9 billion.

Although Zimbabwe has the world’s second-biggest chrome and platinum reserves as well as gold, diamond, nickel and coal operations, the country only received a paltry $543 million FDI in 2014, prompting Chanakira to challenge the government to commit more resources towards the promotion of foreign direct investment flows into the country.

“Promoting FDI is a process not an event and this process encompasses a number of disciplined activities that boost and build up our image and position us in the minds of investment decision makers,” he said.

Market watchers say low FDI retards economic growth and has long-term implications on the country’s economic and political goals.

“Foreign direct investment is thus essential to the turnaround of the country’s economy, which is on a precipice due to 35 years of the Zanu PF-led government’s mismanagement and misrule,” said economic analyst Francis Mukora.

He added that it was, therefore, imperative that Zimbabwe eliminates obstacles to the free flow of capital into the economy such as policy inconsistency and lack of respect for property rights.

“There must be coherence and consistency at the national government planning level to assure potential investors that there will not be any marked gyrations in policy. Guaranteeing of property rights and assurances of implementing existing legislation in keeping with economic and business law are both elemental preconditions for attracting FDI,” Mukora said.

“Ensuring this is in place means that the risk attached to that particular country is greatly reduced,” he added.

Comments (2)

Come up with a draft policy, Chanakira, time is running out for talk shows.

Zvichapera - 16 December 2015

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