HARARE — Zimbabwe’s investment agency says the government must provide more clarity on the country’s indigenisation and empowerment regulations, blaming confusion over the policy for flat foreign direct investment (FDI) inflows.
Zimbabwe Investment Authority (ZIA) chief executive Richard Mbaiwa told a parliamentary portfolio committee on Foreign Affairs that the discord in the government over the implementation of the indigenisation law, which in its current form compels foreign-owned companies valued at over $500 000 to sell at least 51% shares to local blacks, has resulted in FDI inflows averaging $400 million annually, making Zimbabwe one of the least recipients of foreign capital.
“What we get when we talk to or engage investors is that they want consistency and clarity of policy, particularly the one on indigenisation and economic empowerment,” Mbaiwa said.
“We hope that they will be some effort from the government and Parliament to actually bring some clarity in this respect. I think investors get confused when conflicting statements are uttered, especially from the government. So we really hope that we as the government, as Zimbabweans, we will be able to have one position which everyone can articulate to investors.”
He said FDI inflows have nearly doubled to $440 million between January and May compared to the same period last year after indications that the empowerment regulations could be toned down.
Indigenisation minister Francis Nhema recently said that compliance demands for investors in the resource sectors such as mining were different from those in the non-resource sectors.
Mbaiwa said the authority will release a report on investment figures after questioning statistics released by the United Nations Conference on Trade and Development which suggested Zimbabwe had received only 3% of FDI into the region.
Analysts say Zimbabwe lost out on investment flows into the region, first due to its decade-long political and economic crisis triggered by oft-violent seizures of white-owned land to resettle landless blacks, and more recently because of its drive to transfer majority control of all major businesses to locals.
“These figures are subjective in the sense that we believe that the figures might not be very accurate although I think they are very reflective when you look at it from a comparative basis, but they might not be very accurate,” Mbaiwa added.
— The Source