Business / Local
Zim projected to receive $614m FDI for 2016
06 Dec 2015 at 08:50hrs | Views
Policy commentator Batler Tambo has said Zimbabwe is projected to receive $614 million foreign direct investment in 2016 while its neighbours South Africa, Zambia and Botswana received an average of $1,8 billion, $2 billion and $6 billion respectively.
"In 2015 Zimbabwe received FDI estimated levels of US$591 million, and projected to receive US$614 million in 2016," he said.
"SADC economies of South Africa, Zambia, and Botswana are registered foreign direct investment annual averages of US$6 billion, US$2 billion, and US$1.8 billion, respectively. Foreign direct investment (FDI) into the country, which is now working on reforms aimed at improving the investment climate to attract global investors after 15 years of capital flight, is seen in these figures slowing."
He said in July, Indian steel giant, Essar Africa Holdings Limited, pulled out of a deal to invest close to US$1 billion in the beleaguered Zimbabwe Iron and Steel Company (ZISCO) and an electricity generation plant.
"The investment would have benefitted downstream industries. Essar's decision marked the return of physical and psychological torture for 3 000 ZISCO workers reduced to beggars," Tambo said.
"By its own admission, government said the Essar transaction, as well as many others, have been scuttled by bureaucracy and infighting both during the inclusive government and presently, policy discord and a fragile political landscape."
The policy analyst said the recent take-over of a controlling stake in Telecel by the government when the latter is failing to run its over 80 parastatals that are laden by massive corruption.
He said mismanagement especially if cases of PSMAS can be used as test cases scares away investors who are wary about the indigenisation laws which even though they are noble have not been explained well and are therefore subject to abuse and therefore investors have shied away from the country.
"There has been very little or no progress made towards addressing the handicaps, which include corruption, tough empowerment laws and the high cost of doing business in the country. Zimbabwe's ranking in the cost of doing business has been among the worst in the world," he said.
"The deterioration in the country's rank implies that the country still has some challenges as far as enhancement of the operating business environment is concerned," said the National Competitiveness Report (NCR) produced in November 2015 by the National Economic Consultative Forum, a government agency.
"The main problematic areas include the issue of property rights where Zimbabwe scored number 142 out of 144 (the World Economic Forum Global Competitiveness Index (GCI 2014/2015)," he said. "This implies that investors still perceive the country as having weak property rights. "
He said other areas where the country ranked poorly include efficiency of the legal system in challenging the legal regulations, wastefulness of government spending, reliability of police services, judicial independence, strength of investor perception, which is very low, and public trust in politicians.
"Although the ranking for number of days to start a business in Zimbabwe improved from 139 in 2013/2014 to 137 in 2014/2015, the process still takes up to 90 days," the NCR said. In the World Bank Doing Business report published in November 2015, Zimbabwe was ranked number 155 out of about 189 countries surveyed, making it one of the world's most hostile places to start a business," he said.
Tambo said Zimbabwe has to invest more in power generation and alternative greener energy solutions like solar and methane gas which it has in abundance and the latter can power the nation for up to 5 000 years.
"We have to also clarify the indigenisation laws and not threaten investors with expropriation of their businesses as the latter will simply take their money elsewhere as seen in this analysis above," he said.
"The country should also expedite the Special Economic Zones Bill and also commit to paying back the US$750 million that we owe the Chinese who we did not mention in our debt clearance strategy if we are to benefit from any more loans from our all-weather friends. If these among many other solutions can be implemented our economy will regain the ‘Jewel of Africa's status that we lost 15 years ago."
"In 2015 Zimbabwe received FDI estimated levels of US$591 million, and projected to receive US$614 million in 2016," he said.
"SADC economies of South Africa, Zambia, and Botswana are registered foreign direct investment annual averages of US$6 billion, US$2 billion, and US$1.8 billion, respectively. Foreign direct investment (FDI) into the country, which is now working on reforms aimed at improving the investment climate to attract global investors after 15 years of capital flight, is seen in these figures slowing."
He said in July, Indian steel giant, Essar Africa Holdings Limited, pulled out of a deal to invest close to US$1 billion in the beleaguered Zimbabwe Iron and Steel Company (ZISCO) and an electricity generation plant.
"The investment would have benefitted downstream industries. Essar's decision marked the return of physical and psychological torture for 3 000 ZISCO workers reduced to beggars," Tambo said.
"By its own admission, government said the Essar transaction, as well as many others, have been scuttled by bureaucracy and infighting both during the inclusive government and presently, policy discord and a fragile political landscape."
The policy analyst said the recent take-over of a controlling stake in Telecel by the government when the latter is failing to run its over 80 parastatals that are laden by massive corruption.
He said mismanagement especially if cases of PSMAS can be used as test cases scares away investors who are wary about the indigenisation laws which even though they are noble have not been explained well and are therefore subject to abuse and therefore investors have shied away from the country.
"The deterioration in the country's rank implies that the country still has some challenges as far as enhancement of the operating business environment is concerned," said the National Competitiveness Report (NCR) produced in November 2015 by the National Economic Consultative Forum, a government agency.
"The main problematic areas include the issue of property rights where Zimbabwe scored number 142 out of 144 (the World Economic Forum Global Competitiveness Index (GCI 2014/2015)," he said. "This implies that investors still perceive the country as having weak property rights. "
He said other areas where the country ranked poorly include efficiency of the legal system in challenging the legal regulations, wastefulness of government spending, reliability of police services, judicial independence, strength of investor perception, which is very low, and public trust in politicians.
"Although the ranking for number of days to start a business in Zimbabwe improved from 139 in 2013/2014 to 137 in 2014/2015, the process still takes up to 90 days," the NCR said. In the World Bank Doing Business report published in November 2015, Zimbabwe was ranked number 155 out of about 189 countries surveyed, making it one of the world's most hostile places to start a business," he said.
Tambo said Zimbabwe has to invest more in power generation and alternative greener energy solutions like solar and methane gas which it has in abundance and the latter can power the nation for up to 5 000 years.
"We have to also clarify the indigenisation laws and not threaten investors with expropriation of their businesses as the latter will simply take their money elsewhere as seen in this analysis above," he said.
"The country should also expedite the Special Economic Zones Bill and also commit to paying back the US$750 million that we owe the Chinese who we did not mention in our debt clearance strategy if we are to benefit from any more loans from our all-weather friends. If these among many other solutions can be implemented our economy will regain the ‘Jewel of Africa's status that we lost 15 years ago."
Source - Byo24News
