Dumisani Nsingo, Senior Business Reporter
THE exemption of the Indigenisation and Economic Empowerment Policy and the relaxation of the Labour Act are likely to spur more foreign investors to consider operating in the country’s Special Economic Zones (SEZs).
Macro-Economic Planning and Investment Promotion Dr Obert Mpofu said most potential foreign investors were hesitant to invest in the country as they were sceptical about the Indigenisation and Economic Empowerment Policy. The Indigenisation and Economic Empowerment Act is a Zimbabwean law encouraging and requiring local ownership and control of companies.
Some industries are reserved for Indigenous African Zimbabweans, while foreigners can own up to 49 percent on others. The initial act in 2008 required 51 percent indigenous shareholding in all businesses with a net asset value of $500 000.
“We are also looking at the Indigenisation Policy which does not apply on SEZs. The labour laws apply to a certain extent but are not as rigorous as other areas outside the SEZs . . . Most investors used to query that aspect of our (Indigenisation) policy but in this case there will be no need for them to implement the requirement of this indigenisation policy.
“What we have seen is a situation where almost all potential investors would want to partner Zimbabweans so that is just self-activating. Many investors that have expressed their intention to invest always want to know if there are Zimbabweans with such expertise so they can partner with them and work with them, this will see more of our skilled manpower employed under the SEZs, creating more jobs and technology in many areas,” said Dr Mpofu.
He said the number of investors seeking licences to operate in the country’s SEZs was overwhelming.
“We have enquiries for SEZs, those are just flooding into our system and we are hopeful that the new board will really have to do a lot of work to address those issues because we have serious investments. There are quite some activities that have been ignited by this development because of the incentives, the demarcation of the country into zones, the choice of the sectors and also the interest by potential investors.
“Some are actually bringing their proposals personally from all over the world and we are experiencing a situation whereby potential investors want to engage us (ministry) in person, just to come and explain their project to us but with the formation of the SEZs most of those enquiries are now being referred to them together with Zimbabwe Investment Authority,” said Dr Mpofu.
Bulawayo, Beitbridge, Mutare, Norton and Victoria Falls are set to be declared SEZs.
The concept of SEZs and their impact on economic growth is gaining more and more acceptance globally and the instrument has been widely applied.
The aim of SEZs is to stimulate economic development by attracting local and foreign direct investment (FDI), enhancing competitiveness, and facilitating export-led growth. These then lead to economic benefits from employment generation to export growth and increased government revenues to improved technology transfer and innovation.
“I can assure you that in the next year or so a lot would have been achieved if our systems respond to our current thrust of doing business. We want to be proactive as opposed to be reactive on issues that seek to economically grow our situation and we are getting co-operation from all ministries, the entire Government right at the top to the floor-operators are committed to this development and if things are done according to plan we will be seeing a lot of FDI coming into the country,” said Dr Mpofu.
He applauded the Bulawayo City Council for coming up with incentives to attract investment in its area of jurisdiction.
The local authority has identified four sites for SEZs operations and came up with a package of incentives in an endeavour to position the city as an attractive destination for investment.
“Bulawayo has some challenges as regard to the operations of some companies but we have received letters from some investors that want to come to Bulawayo and I’m so delighted that BCC has already reacted by offering incentives which is what we are asking. Other urban authorities or even rural authorities should come up with incentives that should attract investors into their areas in whatever areas they want to do this,” said Dr Mpofu.
He said the Government had made tremendous strides in improving the ease of doing business.
“We have reduced time for processing (investment) applications to five days as opposed to three or even more months. We have also created a One-Stop Investment Centre, which will see projects being evaluated and analysed just at one place by all stakeholders.
“People (investors) would go to various ministries and would be tossed from one ministry to the other but now we are having one entry point, which is the Investment Ministry that will in turn liaise with the respective ministries on issues relating with their ministries, that’s a major development which investors are seized with,” said Dr Mpofu.
He also said the meeting between Zimbabweans based in South Africa and a team of Government officials led by Vice-President Emmerson Mnangagwa last month was highly successful. The meeting attracted over 400 Zimbabwean executives operating in the neighbouring country and a number of potential investors.
“The conclusions we derived from those meetings is that people generally want to come back to Zimbabwe. They see a lot of opportunities in Zimbabwe because of its untapped economic potential in tourism, mining, manufacturing, agriculture. In fact all the sectors have abundant opportunities for those that want to come back and invest,” said Dr Mpofu.