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THE value of approved investment proposals into Zimbabwe in the four months to April this year rose 250 percent, according to latest statistics from the Zimbabwe Investment Authority. A total of 45 investment proposals valued at $410,8 million were approved by ZIA compared to 50 projects worth $117,2 million approved in the same period last year.

During the same period last year, economic analysts said there was an impending harmonised election which “briefly dampened” the country’s investment climate.

Normally, investors sit on the fence ahead of any election until they are clear about the direction that a country would be taking when a new Government takes over.

ZIA chief executive Mr Richard Mbaiwa said while the number of approved projects have decreased compared to the same period last year, the value of the projects have significantly increased, a reflection that the country was getting “meaningful projects”.

“The projects are now coming in bigger sizes,” Mr Mbaiwa said in an interview.

“We are getting more meaningful projects as opposed to so many with insignificant value. Bigger projects create more jobs and bring more foreign direct investment.”

For instance, ZIA approved 17 projects in the mining sector valued at $25 million in four months to April 2013 last year and 19 projects valued at $118,2 million this year.

In the services industry, nine projects valued at nearly $7 million were approved during the same period and this year, 12 projects worth about $251 million have been approved.

There was little interest in agriculture and construction, with each recording one proposal, ZIA said.

China had the biggest number of approved projects, Mr Mbaiwa said, as Zimbabwe continues to be one of the largest recipients of Chinese investment in Africa.

The project proposals are mostly joint ventures between foreigners and local businesses. At this stage, these are just approvals and the projects are not yet up and running.

Internationally, an implementation rate of 25 percent and above of the approved projects is acceptable.

ZIA gives investors two years to carry out their investment, failure of which the investor should aise the authority on the reasons for the delay and their plan to implement.

Analysts said following the clarification on the indigenisation policy by President Mugabe last month, “it is most likely that more foreigners will start making business enquiries”.

Officially opening the 55th edition of the Zimbabwe Trade Fair in Bulawayo, President Mugabe said Zimbabwe was open to investment and the country’s empowerment policy was not meant to expropriate shares held by foreign-owned companies.

Indigenisation had been subject to “misrepresentation and misinterpretation”, with some people claiming it was meant to seize foreign-owned businesses, he said.

“With this clarification, let me take this opportunity to invite potential investors to come and do business in Zimbabwe in which there is huge potential for joint venture partnerships between investors, manufacturers, industrialists and the public sector.”

A week earlier, in his address at celebrations to mark the country’s 34th Independence anniversary in Harare on April 18, President Mugabe said the Indigenisation and Empowerment policy was not cast in stone and foreigners can hold majority shareholding in any enterprise, depending on the nature of their investment.

Already, Government is working on a framework for the establishment of Special Economic Zones to attract foreign direct investment, while investment laws will be amended to make it easier for foreign investors to register and do business in Zimbabwe.

The move, which is enshrined in the Zimbabwe Agenda for Sustainable Socio Economic Transformation, was recently endorsed by the World Bank that promised to help attract investment, promote export-oriented growth and generate employment.

Once established, the SEZs would create an environment conducive for foreign investors who would enjoy a number of concessions that would make it easier for them to conduct business

Source : The Herald