Rumbidzai Zinyuke Business Reporter
THE Zimbabwe Investment Authority last year approved projects valued at US$1,1 billion, a 66,6 percent increase from the previous year driven by renewed interest in the manufacturing sector.ZIA chairman Nigel Chanakira said a total of 157 projects were approved during 2014 compared to 163 projects worth $685,9 million approved in 2013.
“We had a very good run in the first nine months of last year but the last quarter was very disappointing because we thought we would attract much more than that. Hopefully this year will be better because of the initiatives we have put in place,” he said.
Mr Chanakira said the notable improvement in investment flows was pushed by the manufacturing sector which had projects worth $650,2 million.
The country’s manufacturing industry which has capacity utilisation now at 36.3 percent, has been collapsing due to a shortage of capital among other challenges.
The improvement in the amount of investment directed towards the sector might bring relief to the industry. The services sector had investments worth $286 million approved while the mining sector, which has been the major recipient in project approvals over the past five years had $159,9 million worth of projects approved.
Zimbabwe, which continues to lag behind its regional peers in investment attraction, has been registering fluctuations in investment flows since dollarisation.
Investment projects approved in 2009 stood at $1,3 billion but the figure declined to US$520,4 million in 2010. It went up again the following year to $6,6 billion largely due to investor confidence brought about by stability in the economy.
In 2012, investment projects worth $929,9 million were approved. Mr Chanikira said ZIA will conduct a review of the implementation of the projects approved in 2014.
“ZIA will conduct a review of the 2014 projects by mid-2015 to gauge the implementation ratio of the projects. Historically, some approved approvals may suffer delayed implementation or cancellation for a host of reasons.
“The objective of ZIA is to assist and facilitate the effective implementation of most approved projects, and to make Zimbabwe a more competitive destination of FDI in conjunction with domestic investment and empowerment,” he said.
At peak in the 1990s, FDI into Zimbabwe averaged 20 percent of the gross domestic product, compared to current levels around 4 percent.
The country, which ranks lowly on the World Bank’s ease of doing business index, also has a low project implementation rate, with
less than 50 percent of approved projects turning into actual investments between 2009 and 2011.
Last month, ZIA and the USAID Strategic Economic Research and analysis programme in Zimbabwe came up with reforms that could be implemented to improve the country’s rating in the World Bank Ease of Doing Business report.
Zimbabwe is ranked at 171 out of 189 countries in the latest World Bank ease of doing business report and 180 in terms of the “starting a business” rank.
With a total of nine procedures completed over 90 days at a cost of 114,6 percent of income per capita that an investor has to go through to set up the business, the country is attracting the least Foreign Direct Investment in the region.
Mr Chanikira said ZIA, the Zimbabwe Revenue Authority and the Registrar of Companies have already streamlined their operations to make it easier for investors to do business in the country.