Zim must do more to attract investment
IN this week’s issue, we report that international investors still view Zimbabwe as a viable investment destination. Canadian-listed miners, Pambili Natural Resources Corporation and Zephyr Minerals Limited, are intensifying efforts to obtain government approvals to commence mining operations. Pambili has already secured approval to convert a 50-hectare milling site surrounding Golden Valley Mine in Mashonaland West into five 10-hectare claims. While this development is promising, it should prompt further actions to enhance Zimbabwe's appeal to foreign investors. The government must leverage this interest to attract more investment. Positive reports from these firms on their investments in Zimbabwe could significantly boost the country’s profile on international markets. Remember, these companies are listed on an international exchange, and their reports reach a global audience of big companies. The more the government facilitates investment, the better Zimbabwe's chances of attracting the capital it desperately needs.
The country's capital requirements stand at US $40 billion, highlighting the urgency of this task. To capitalise on the opportunity presented by the Canadian firms and attract more international investors, the government must implement several key strategies.
Stable and transparent policies are essential as investors seek stability. They need assurance that policies will not change unpredictably.
A clear legal framework with consistent application of laws can build trust and confidence among potential investors.
Working on the ease of doing business will be important. Simplifying processes for setting up businesses, cutting through bureaucratic red tape, and reducing corruption can save investors time and money. Prioritising infrastructure development, especially reliable power supply, good road networks, and efficient communication systems, will be crucial. These are the backbones of any successful business operation and can significantly enhance investor confidence. Tax incentives and financial support must be prioritised.
Of course, the tax incentives are there, but they are weak. While existing tax incentives are countered by a high tax regime, the government must offer more robust incentives. This could include tax breaks, subsidies, and other financial incentives to attract multinational corporations. A well-structured incentive programme can provide the necessary initial boost to attract multinational corporations.
Lastly, the government must make sure there is political stability, and the rule of law is observed. However, political uncertainty continues to hamper economic prospects, and the government has shown little commitment to the rule of law, as evidenced by recent massive corruption allegations.
Until these issues are addressed, companies will remain cautious about investing in Zimbabwe. Investors need to know that their investments are secure and that any disputes will be resolved fairly and promptly when they arise. This year has already seen a record number of investors leaving the country, which sends a bad signal.
By effectively implementing these strategies, Zimbabwe can transform itself into a beacon for international investment. Creating an environment that is welcoming and supportive of business ventures can attract the capital needed to spur economic growth and development.