ZIA approves over $500m projects

Published: 19 November 2013

THE Zimbabwe Investment Authority (ZIA) has approved investment projects worth $570,5 million for the nine-month period to October this year mainly driven by investments in the mining sector.

According to the latest statistics from ZIA, 137 projects were approved, creating employment for 7 244 people in the period under review. Experts say the easing of empowerment regulations by the Zanu-PF government following the July 31 elections is expected to ease investor fears. Zimbabwe are currently ranked one of the lowest investment destinations.

The mining sector received investments worth $179,5 million for 55 projects, followed by manufacturing with $151,3 million for 51 projects, services sector was $99,1 million for 21 projects and the construction sector received $129,5 million for six projects.

Only two projects were approved in the tourism sector with a value of $3,4 million, while the transport sector had one project with a value of $5,3 million and Agriculture had one project valued at $2,5 million.

In the period under review, Zimbabwe received foreign investment worth $87,2 million from seven projects which created 402 jobs while in joint investments Zimbabwe received $483 million from 130 projects and 6 842 jobs were created.

During the period under review Zimbabwe export earnings totalled $306,3 million.

According to the Mid-Term Fiscal Policy statement by former Finance minister, Tendai Biti, domestic investment was primarily limited by the liquidity challenges prevailing in the economy.

". . . Foreign direct investment was mainly constrained by perceived risks associated with elections as the indigenisation and economic empowerment regulations, all of which have seen investors adopting a cautionary attitude," Biti said.

Biti said private investment was projected at 6,3% of the Gross Domestic Product in 2013, on the other hand public investment originally target of 4,4% remains low and unachievable due to over-crowding of unsustainably high recurrent expenditures - 32,6% of GDP.

Biti revised the year-end economic growth rate to 3,4% from the projected 5% due to political uncertainty after the polls. The projected economic growth decline was also reflected by a slowdown in growth of aggregate demand, which is now projected to grow at 7% in 2013, down from the original forecast of 12%.

Experts say Zimbabwe's Foreign Direct Investment (FDI) inflows should double within the next five years in order to achieve the 7,3% annual economic growth rates projected in the new economic blue print. According to the United Nations Conference on Trade and Development (Unctad) FDI flows into Zimbabwe increased slightly by 3,25% to $400 million last year from $387 million in 2011. FDI contributed 17,7 % to the country's total GDP during the period under review.

The African Development Bank estimates that Zimbabwe's infrastructure, a key enabler for FDIs, needs $14 billion to rehabilitate. The country has an estimated debt of $10,7 billion, which represents 110% of GDP.

- newsday