By Enacy Mapakame
Numerous foreign direct investment (FDI) commitments made, coupled with a conducive business environment obtaining in the country, will act as catalysts for job creation, a brokerage firm IH Securities has revealed.
The broking firm also indicated that with local industry becoming more operational as new companies come to the fore, the expectations were high that more people will secure employment.
The mining sector, together with infrastructure rehabilitation projects such as energy and road rehabilitation, were likely to be major recipients of most of the FDI commitments.
The change in the country’s leadership last November as well as reforms to the indigenisation laws have also been push factors in creating a positive investor sentiment.
The harmonised election held on July 30 was also widely touted as a factor in investors’ decision-making in fulfilling their commitments to Zimbabwe and subsequently determine the actual inflow of funds.
Already, current infrastructure rehabilitation projects including the Emergency Road Rehabilitation Programme (ERRP) have seen the creation of 4 000 skilled and semi-skilled jobs, feeding into both downstream and upstream industries, including the consumer sector.
Recently, Karo Resources of Cyprus signed a $4,2 billion mining deal for the development of a platinum mine with a projected output of 1,4 million ounces of platinum group metals (PGMs).
“As these projects come to fruition, we anticipate that new jobs will be created which will in essence begin the process of re-formalising the Zimbabwean economy over time,” said IH Securities in their Zimbabwe Consumer Sector Report.
“We have observed a marked improvement in FDI commitments signalling greater investor comfort with the current Government and its early approach to macro policy and direction,” said IH.
In May this year, Government also signed a $5,2 billion deal with a South African company — Nkosikhona Holdings — that will see the country produce over 8 million litres of liquid fuels per day from coal in Lisulu, Hwange.
The deal that will be actualised under a Memorandum of Understanding with Verify Engineering Private Limited and Nkosikhona Holdings, will see the beneficiation of coal for the production of liquid fuels, fertilisers and chemicals.
Another $1 billion deal was signed with Sinosteel Corp in a development that will see the Chinese firm building a 400 megawatt coal bed methane-fired power plant in Matabeleland North Province and setting up new ferrochrome smelters at Zimasco.
This should create an estimated 25 000 jobs. Several other multi-million deals and commitments have been made for the agriculture, tourism and energy sectors.
While the harmonised election has been said to be a deciding factor in the flow of investment into the country, several other investments have been made into the country prior polls.
“We have, however, seen some early investors ahead of elections which include the likes of Pepsi through Varun Beverages that have set up a bottling plant in Harare,” said IH.
This is in addition to the capitalisation and re-opening of previously closed businesses like Eureka Mine in Guruve South.
Such projects are expected to create a boon in the country’s labour market in the direct sectors and other downstream industries.