By Golden Sibanda in Bulawayo
The Zimbabwe Investment Authority (ZIA) has approved $950 million worth of investment project proposals in the first three months of this year, amid strong renewed investor interest in Zimbabwe following the onset of the new dispensation late last year.
This figure for the first quarter of 2018 compares favourably to the $150 million project proposals ZIA approved during the first quarter of 2017.
ZIA chief executive Richard Mbaiwa, said the authority, due to the growing interest, was now targeting to eclipse the $1,2 billion approvals achieved for the entire part of 2017, by end of the second half of this year.
In terms of actual foreign direct investment (FDI) inflows, Zimbabwe has over the last three years averaged $400 million compared to less resource endowed nations like Mozambique, South Africa and Angola, which averaged $4 to $12 billion.
“The enquiries that have come to ZIA have increased very significantly. If I look at the first quarter of 2018, comparing to the first quarter of 2017, you see a very significant increase.
“In terms of projects that we have actually licensed, not those that made commitments such as the $4,2 billion by Karo Resources and others and not licensed by ZIA, I am not including those; I mean the ones ZIA has actually licensed, for the first quarter we are standing at just below a billion dollars.
“The figure (for licensed projects) is about $950 million. In the first quarter of 2017 we were at about $150 million. So, you can see the difference, the jump. Normally, the first quarter is the slowest, especially in the previous years. When we had $150 million in the first quarter, by end of the year the figure would have gone up to between $1,5 billion and $2 billion,” he said.
“So we think that this year, with the first quarter just shy of a billion dollars, we are quite positive that by end of the first quarter maybe we would have already surpassed last year’s total figure ($1,2 billion project approvals for whole of 2017).
“Until end of the year, barring any other developments and with President promising free and fair elections, we do not see anything having negative effect on project approvals,” Mr Mbaiwa said.
Mr Mbaiwa was speaking in an interview with The Herald Business after his presentation at the sold out 12th International Business Conference of the 59th edition of the Zimbabwe International Trade Fair (ZITF), which started on Tuesday and ends tomorrow.
More than 800 delegates, local and foreign, attended the business conference, up from about 350 who graced last year’s event, as investor confidence under the new dispensation continues to swell.
Mr Mbaiwa said the country’s premier investment authority had been inundated with enquiries from prospective investors since President Mnangagwa took office in November last year.
But he noted that Zimbabwe needed to deal with structural and legal constraints hampering the optimal performance of the one-stop shop.
“The approach, which is there now, is that we need to have an enabling legal framework, so that the one-stop shop can be effective and empowered.
“The challenge we have had in the past was that we had officers seconded to ZIA and assumed we had a one-stop shop yet the officers did not have the power to issue licences or permits. The officers just provided information and directed investors to their head offices; in fact we have called it (ZIA) another one-more stop shop.
“So what has happened now is that there is a law under consideration for business and investment facilitation. It is still at the drafting stage.
“It will come in two parts, firstly, to establish the (one-stop) institution and provide for a one-stop shop. The second part of the legislation will establish rights and obligations of investors; things like guarantees and security of investments,” Mbaiwa said.
He said that the process was being spearheaded by the Ministry of Industry and Enterprise Development and given its importance and urgency, the process of crafting the law would be expedited in the next 100 day programme under the Office of the President and Cabinet (OPC’s) rapid results initiative (RRI).
The ZIA CEO also pointed out that Cabinet will decide the form and structure of the new one-stop shop on the basis of some of the information presented by Rwanda Development Board chief executive Clare Akamanzi, who was in the country recently to share the Rwandese experience.
Rwanda is highly ranked on the African continent with regards to investment approval procedures, which helps it attract significant amounts of foreign capital, crafted in terms of the one-stop shop concept for effective investment approval process.
He said under the current arrangement, investors were still obligated to seek licensing by other regulatory arms of Government even when they would have already received ZIA certification.
But Government has indicated its intention to streamline the process after announcing a Cabinet decision to merge the Special Economic Zones Authority, Joint Ventures board, ZIA.