Emmerson Njanjamangezi, Group Features Editor 
ZIMBABWE Investment and Development Agency (Zida) says it is confident that Foreign Direct Investment (FDI) will increase this year to reach the US$4 billion set target, given the interest shown by both regional and global investors.
Since the turn of the millennium, Zimbabwe has struggled to attract significant FDI due to a host of problems, including a massive debt overhang, a negative perception in the international community brought on by the country’s 2000 land redistribution exercise, and disputed elections.
Between 2000 and 2018, the country’s FDI was hovering around US$500 million yearly. However, with Chinese investments in mining and the local industry increasing, the annual FDI flows have been rising over the last five years.
Tafadzwa Chinamo, Zida chief executive
According to Zida, FDI in 2022 was US$2,3 billion, up from US$970 million achieved in 2021.
“Recognising the importance of distinguishing between FDI, Domestic Direct Investment (DDI), and reinvestment by existing investors beginning this year, the agency has set targets for each and strategies to achieve the same,” the chief executive of Zida, Tafadzwa Chinamo, said in a report published last week.
“Therefore, the US$4 billion committed investment goal for 2023 is further broken down as FDI (US$1,5 billion), DDI (US$500 million), and reinvestment (US$2 billion). The target increases in FDI inflows consider the planned activity schedules and changes on the global market, with a focus on access to renewable resources and minerals for the development of clean power generation,” he said.
Chinamo said Zimbabwe has vast mineral wealth and the government’s beneficiation policy, especially on lithium, looks set to drive foreign direct investment.
“In addition, the government position on beneficiation for minerals extracted under mining licences should see a marked increase in investment as investors are expected to direct capital into plant and equipment for beneficiation.
“The requirement has also seen an increase in the volume of inquiries and applications for the establishment of processing plants — especially for lithium. By comparison, there was no data collated or reported in 2022 and 2021 for domestic direct investment licensing thus, no measure to benchmark against,” he added.
Moreover, Chinamo said the investment promotion agency has mooted a marketing campaign centred around resource-seeking investors in a bid to realise the target.
“… the agency has acknowledged that domestic investors play a critical role in the development of the economy, and this will see Zida roll out a campaign to attract and license more local companies. The agency intends to segment its target markets and approach each market with a clear value proposition for the country’s investment opportunities on offer.”
According to Chinamo, the investment agency segmented its target market into resource-seeking and market-seeking sub-clusters.
“Resource seeking – these have been identified to be mostly from the European and Asian markets with a focus on renewable resource uptake and mineral extraction. The strategy is focused on licensing the investors to develop and operate within Zimbabwe and add value to the resources extracted.
“Market seeking – the Zimbabwean market is not large enough for most investors but it is a strategic location for the development of manufacturing hubs that will service the SADC region and the East African markets. Many western European manufacturers are being targeted for the establishment of manufacturing pods in the country,” he further said.
The government’s devolution strategy has worked to Zida’s advantage as it has made it easy to reach a wider audience of implementing agencies and authorities through provincial engagement forums, according to Chinamo.
“This initiative continued in 2023, focusing on a more structured approach of ensuring that the provinces work towards promoting ‘real’ projects with an emphasis on value chain development as per the national strategy.”
During the period under review, Zida assisted the Midlands with an inter-province engagement with the province of Sverdlovsk region of Russia, in which the latter presented its capacity to establish factories focused on the steel sector and for possible trading opportunities between the countries.
The agency presented its own investment opportunities and shared requirements for licensing and registration with the Sverdlovsk region companies. Midlands province and the region are expected to sign a twinning agreement soon.
To also widen the marketing pool of investment marketers, Chinamo said Zida engaged the Foreign Affairs ministry’s trade foreign missions led by ambassadors to help disseminate investment information and promote the country as an investment destination.
During the first quarter under review, Chinamo said the agency interacted and met with mission staff who were being posted to the Washington, Windhoek, and Pretoria/Johannesburg consular services offices.
The missions and the agency outlined a plan to work together to achieve the goal of promoting the country’s potential — where the agency will support foreign forums and exhibitions, through attendance and provision of promotion materials and information.
Further, the agency shared with the foreign missions details of Zida registered investors in the missions’ host countries for the embassies to keep investors informed of developments that may affect their investment in Zimbabwe. newsdesk@fingaz.co.zw
