Business / Economy
Zimbabwe approved $6,6bn projects in 2011
12 Feb 2012 at 08:35hrs | Views
Government, through the Zimbabwe Investment Authority (ZIA), approved $6,6 billion worth of investment projects last year, with more than half being approved in December alone, showing the country's renewed attractiveness as an investment destination.
Statistics from ZIA, which represent a 1 200 percent increase from the 2010 figure of $520 million, indicate that Asian markets such as Mauritius, China and India - presently enjoying burgeoning economic growth - continue to show increased interest in local projects.
Interestingly, the United States of America, whose relations with Zimbabwe remain frosty, also increased its investment proposals.
About 53 percent, or $3,5 billion worth of projects, were approved in December alone, with the bulk of the projects approved in the mining sector, which attracted $3 billion, followed by manufacturing at $539 million and the services sector at $7,6 million.
Similarly, for the whole of 2011, most of the investments were channelled to mining as investors targeted commodities as a haven from the challenging conditions of the sovereign debt crisis affecting the European Union bloc.
Overall, $3,7 billion worth of projects were approved in the sector.
It is also believed that investors could be warming up to the indigenisation and economic empowerment legislation, as projects approved for investments in the same sector plummeted during the first quarter of last year when the Government began rolling out the empowerment programmes.
There were also significant investments in manufacturing at $670 million, services and construction at $128 million and $120 million respectively.
Mauritius led countries that expressed an interest to invest in the country, with a commitment of $3,4 billion worth of projects followed by USA whose approved projects topped $1,6 billion.
Despite the uneasy relationship between Harare and Washington, the United States continues to be one of the country's biggest trading partners.
South Africa, which remains as the country's largest trading partner, also weighed in with projects worth $335 million, followed by the United Arab Emirates, India and the United Kingdom at $70 million, $11 million and $34 million in that order.
Permanent Secretary in the Ministry of Economic Planning and Investment Promotion Dr Desire Sibanda said in an interview last week although most of the projects do not readily materialise, the actual investment tends to come at a later stage after approval.
"The economy only grows when there is investment. To a larger extent there is a great correlation between investment and the GDP of a country.
"It is our desire as Government that all the Zimbabwe Investment Authority-approved projects materialise, but due to varying reasons some projects do not turn up. If this happens, it does not directly affect the economy, but what it actually means is that as a nation we would be slowing down our developmental plans.
"We are very particular about the kind of investors that we attract because once you approve an investor it means you have automatically shut the door for other potential investors.
"The actual investment comes at a later stage after approval. But before potential investors are given the green light, there are issues that have to be agreed on. For instance, there has to be an agreement as to how much the investor is to inject, and ZIA officials have to ascertain whether the investor has the capacity to see through the project," said Dr Sibanda.
Market watchers also note that the launch of the One-Stop Shop (OSS) in February last year has been catalytic to project approvals as the time taken to process applications has significantly improved.
The OSS houses several critical Government departments under one roof, a development that is designed to avoid the bureaucracy that was generally hampering investment.
Before the establishment and launch of the investment shop, Government officials visited countries such as Mauritius, Rwanda and Namibia in order to acquaint themselves with the operations and benefits associated with such an institution.
However, the country is still ranked lowly on the Doing Business Index by the World Bank Group.
The country was ranked 171 out of 183 economies on the Doing Business 2012 data, which indicates that a lot still needs to be done to smoothen processes for potential investors.
Statistics from ZIA, which represent a 1 200 percent increase from the 2010 figure of $520 million, indicate that Asian markets such as Mauritius, China and India - presently enjoying burgeoning economic growth - continue to show increased interest in local projects.
Interestingly, the United States of America, whose relations with Zimbabwe remain frosty, also increased its investment proposals.
About 53 percent, or $3,5 billion worth of projects, were approved in December alone, with the bulk of the projects approved in the mining sector, which attracted $3 billion, followed by manufacturing at $539 million and the services sector at $7,6 million.
Similarly, for the whole of 2011, most of the investments were channelled to mining as investors targeted commodities as a haven from the challenging conditions of the sovereign debt crisis affecting the European Union bloc.
Overall, $3,7 billion worth of projects were approved in the sector.
It is also believed that investors could be warming up to the indigenisation and economic empowerment legislation, as projects approved for investments in the same sector plummeted during the first quarter of last year when the Government began rolling out the empowerment programmes.
There were also significant investments in manufacturing at $670 million, services and construction at $128 million and $120 million respectively.
Mauritius led countries that expressed an interest to invest in the country, with a commitment of $3,4 billion worth of projects followed by USA whose approved projects topped $1,6 billion.
Despite the uneasy relationship between Harare and Washington, the United States continues to be one of the country's biggest trading partners.
Permanent Secretary in the Ministry of Economic Planning and Investment Promotion Dr Desire Sibanda said in an interview last week although most of the projects do not readily materialise, the actual investment tends to come at a later stage after approval.
"The economy only grows when there is investment. To a larger extent there is a great correlation between investment and the GDP of a country.
"It is our desire as Government that all the Zimbabwe Investment Authority-approved projects materialise, but due to varying reasons some projects do not turn up. If this happens, it does not directly affect the economy, but what it actually means is that as a nation we would be slowing down our developmental plans.
"We are very particular about the kind of investors that we attract because once you approve an investor it means you have automatically shut the door for other potential investors.
"The actual investment comes at a later stage after approval. But before potential investors are given the green light, there are issues that have to be agreed on. For instance, there has to be an agreement as to how much the investor is to inject, and ZIA officials have to ascertain whether the investor has the capacity to see through the project," said Dr Sibanda.
Market watchers also note that the launch of the One-Stop Shop (OSS) in February last year has been catalytic to project approvals as the time taken to process applications has significantly improved.
The OSS houses several critical Government departments under one roof, a development that is designed to avoid the bureaucracy that was generally hampering investment.
Before the establishment and launch of the investment shop, Government officials visited countries such as Mauritius, Rwanda and Namibia in order to acquaint themselves with the operations and benefits associated with such an institution.
However, the country is still ranked lowly on the Doing Business Index by the World Bank Group.
The country was ranked 171 out of 183 economies on the Doing Business 2012 data, which indicates that a lot still needs to be done to smoothen processes for potential investors.
Source - SM
