Zimbabwe fails to attract FDI inflows

Zimbabwe fails to attract FDI inflows
Published: 21 March 2012 (3890 Views)
ZIMBABWE continues to wobble in attracting Foreign Direct Investment, drawing in a mere US$250 million against US$55 billion that went into African economies last year, according to a research report.

The report by Invictus Securities says that Zimbabwe performed worse than previously smaller economies such as Zambia and Mozambique.

"Zimbabwe received derisory US$250 million (0,46 percent), which was (however) above the US$105 million secured in 2010," said Invictus.

"In comparison, Zambia and Mozambique each received over US$1 billion in FDI inflows last year, reflecting investor confidence in the region."

The report attributed the dismal performance in terms of attracting foreign investment to indigenisation coupled with increased perceived country risk profile.

It said a clear, consistent and transparent policy taking into account the fragility of the economy was critical, as concerns on the policy warped the confidence brought by the inclusive Government in 2009.

However, the report pointed out that there has not been any expropriation of foreign assets as investors feared, under the guise of indigenisation.

Invictus said 2011 was characterised by policy uncertainty dominated by the Indigenisation and Economic Empower Act, which compels foreign-owned firms to sell, at fair value, at least 51 percent equity to locals.

"This, unsurprisingly inhibited investor confidence at a time the economy was, and continues to be, in dire need of foreign capital. It is worth noting that policymakers could not agree on the implementation (modalities) of the policy, causing jitters in the market," the report said. Indigenisation and economic empowerment is meant to bring previously marginalised blacks into mainstream economic activities of the country.

But despite investor scepticism of the economy, which suffered almost 50 percent decline in GDP in the decade to 2008, has grown for three consecutive years.

The economy grew by 4,5 percent in 2009, 8,1 percent in 2010, 9,3 percent in 2011 while Finance Minister Tendai Biti forecast 9,4 percent expansion this year.

Growth is seen anchored by increased output in agriculture (tobacco, cotton, sugar and soyabeans) mineral exports, mainly constituted by diamonds, gold and platinum, driven by high prices on global markets.

However, the International Monetary Fund sees lower growth this year and has put the economic growth rate at 3 percent saying FDI remains subdued.

The IMF cited significant structural impediments, the accelerated indigenisation in mining and uncertainties about ownership in the sector.

The multilateral lender also cited political disturbances, export price declines, higher than anticipated fuel prices, reversal of capital flows and bank instabilities. After a decade of instability, Zimbabwe possesses unlimited investment potential in various sectors including manufacturing mining, agriculture, tourism, mining, infrastructure, ICT and transport.

- zimpapers

Tags: FDI, Attract, Fail,
 0

You May Like These Videos

Comments

There are no comments.

Latest stories

Mnangagwa embraces Chamisa as he fears army plots

by Mandla Ndlovu | 24 April 2019 | 66 Views

Let's discuss no insults please

by Mbonisi Solomon Gumbo | 24 April 2019 | 37 Views

Dabengwa in India for medical attention

by Iphithule Maphosa | 24 April 2019 | 36 Views

MDC Alliance splashes $3m on congress

by Staff reporter | 24 April 2019 | 60 Views

Zesa to install cameras on transformers

by Staff reporter | 24 April 2019 | 38 Views

Dembare is sinking and very fast

by Memory Mucherahowa | 24 April 2019 | 43 Views

Man fatally stabs father

by Staff reporter | 24 April 2019 | 50 Views

58 people killed over Independence and Easter holidays

by Staff reporter | 24 April 2019 | 42 Views

Jilted man strangles ex-lover to death

by Staff reporter | 24 April 2019 | 47 Views

Mum flushes baby down the toilet

by Staff reporter | 24 April 2019 | 42 Views

19 injured in Luveve Road pile-up

by Staff reporter | 24 April 2019 | 33 Views

Greyhound bus burns. . .34 passengers, crew escape unharmed

by Staff reporter | 24 April 2019 | 43 Views

Ndiraya takes over at Dembare

by Staff reporter | 24 April 2019 | 47 Views

Zimbabweans find it hard to survive in the English culture

by Dr Masimba Mavaza | 24 April 2019 | 31 Views

Highlander's worst start

by Staff reporter | 24 April 2019 | 36 Views

Two war veterans die

by Staff reporter | 24 April 2019 | 51 Views

Zanu-PF gold baron, 9 others up for public violence

by Staff reporter | 24 April 2019 | 47 Views

Villagers forced to fund Uhuru festivities

by Staff reporter | 24 April 2019 | 38 Views

Zimbabwe @39: A return to the source

by Takura Zhangazha | 24 April 2019 | 34 Views

MPs' office broken into

by Staff reporter | 24 April 2019 | 46 Views

Security guard axes colleague, flees

by Staff reporter | 24 April 2019 | 42 Views

Madinda blames pre-season strike

by Staff reporter | 24 April 2019 | 34 Views

ZBCtv to screen Bulawayo full council meetings

by Staff reporter | 24 April 2019 | 36 Views

Drama as apostolic sect members seize injured driver from hospital

by Staff reporter | 24 April 2019 | 51 Views

Fuel supplies improve for ZITF

by Staff reporter | 24 April 2019 | 31 Views

Serial rapist in court over 5 counts of rape, robbery

by Staff reporter | 24 April 2019 | 17 Views

Mnangagwa takes turnaround agenda to ZITF

by Staff reporter | 24 April 2019 | 19 Views

Soldier bites father-in-law

by Staff reporter | 24 April 2019 | 28 Views

China takes over Chimanimani roads rehab

by Staff reporter | 24 April 2019 | 23 Views

When things fall apart

by Fr Oskar Wermter sj | 24 April 2019 | 33 Views

Chiredzi folk fail ZNA intake

by Staff reporter | 24 April 2019 | 25 Views

PHOTO: Dabengwa wheeled to plane in wheelchair

by ZimLive | 24 April 2019 | 59 Views

Fuel prices up again

by Staff reporter | 24 April 2019 | 41 Views

'Crooks surround Mnangagwa must go,' says Chamisa

by Staff reporter | 24 April 2019 | 26 Views

Mnangagwa, Chamisa to meet face-to-face

by Staff reporter | 24 April 2019 | 31 Views