'Zimbabwe needs US$50 billion FDI'

Zimbabwe needs about US$50 billion in investment over the next decade to sustain economic growth and achieve meaningful transformation, according to prominent economist and entrepreneur Nigel Chanakira.

Speaking during the recent In Conversation with Trevor Ideas Festival in Nyanga, Chanakira said the country must attract around US$5 billion annually for the next five to ten years if it is to stabilise and build a resilient economy. He noted that the projection aligns closely with a 2021 government estimate which placed Zimbabwe's investment requirement at about US$40 billion to reach upper middle-income status by 2030.

"We would need about US$5 billion per year for the next five to ten years. Then we will do very well, because what we need is probably US$50 billion of investment," Chanakira said.

Chanakira, who once chaired the Zimbabwe Investment Authority - now the Zimbabwe Investment and Development Agency (ZIDA) - said actual investment inflows remain far below what is required. He cited persistent economic challenges such as public debt, corruption, exchange rate volatility, low liquidity and growing informalisation as key obstacles.

According to the United Nations Conference on Trade and Development (UNCTAD) 2025 World Investment Report, Zimbabwe's foreign direct investment inflows have been modest in recent years, rising from US$194 million in 2020 to US$635 million in 2023, before easing slightly to US$597 million in 2024.

At the Zimbabwe Economic Development Conference held in September, Infrastructure Development Bank of Zimbabwe (IDBZ) acting chief executive Willing Zvirevo warned that the country faces a development deficit exceeding US$14 billion. He called for new financing models to strengthen private sector participation in national development.

Chanakira said the country must focus on sectors that promote value addition and inclusive growth. While acknowledging the mining industry's contribution, he warned that mining-led growth alone would not transform Zimbabwe's economy.

"Agriculture needs new capital to boost productivity after years of underinvestment. We also need to retool and re-kit our industrial base, which has declined significantly in its contribution to gross domestic product," he said.

He expressed optimism over reports that Nigerian billionaire Aliko Dangote's Dangote Group is renewing interest in Zimbabwe, noting that such investment could be transformative. "When we hear of Dangote coming next month, that's huge. He could put US$1 billion alone into a single investment," he said.

Responding to criticism that Chinese investors dominate the market while importing their own materials and labour, Chanakira urged policymakers to take a pragmatic approach. "Half a loaf is better than none. Let's not check the colour of the money - whether it's Chinese, European, or American. What matters is that it contributes to national development," he said.

However, he emphasised that investment quality and regulation are essential to ensure Zimbabwe benefits meaningfully from FDI. "Do we want a better quality of investment? Yes. But it's the government's responsibility to make sure that when investments come through, they are properly valued and aligned with national priorities," he said.

Chanakira added that all investors must adhere to the country's labour, tax, and environmental standards. "We also have to re-look at our tax laws so that these are not tax-free investments. Investors, no matter their origin, must abide by the nation's laws," he said.

He concluded that Zimbabwe must strike a balance between attracting investment and maintaining regulatory discipline if it is to rebuild a competitive and sustainable economy.