Zimbabwe has the worst investment climate in the Southern African Development Community (SADC) region, with a ranking of 170 in terms of protecting investors.
The World Bank has ranked the country 171 out of 189 countries on its 2014 ease of doing business index, something attributed to negative perceptions of Zimbabwe’s policies, such as its land reform, as well as the current crusade to localise control of all foreign-owned enterprises.
Zimbabwe needs to aggressively improve the overall business environment and investment climate
The Zimbabwe Investment Authority (ZIA) chief executive officer, Richard Mbaiwa told a Parliamentary Portfolio Committee on Industry and Commerce that local investment laws remained a major impediment to foreign direct investment (FDI).
“It is clear that as a country, we are not performing to our best potential in terms of investment inflows, especially if you compare with countries with similar resource endowment in the region,” he told legislators.
“Zimbabwe needs to aggressively improve the overall business environment and investment climate to attract meaningful levels of investment.
“There is need to undertake reforms so that we are seen to be making some improvements in our doing business environment.”
Mbaiwa blamed Western sanctions, policy inconsistencies and a liquidity crisis for low investment inflows.
This come as the southern African country has, for the first time in a decade, pleaded with the West for direct financial aid.
Foreign direct investment has remained stagnant at $400 million in the past two years.
In terms of FDI, Zimbabwe received investment worth $60m in 2009, the following year it received $166m then $387m in 2011, while in 2012 it received $400m before reaching about $410m in 2013.
At peak in 1998, the country received FDI worth $443.3m.