eBusiness Weekly
Business Writer
Zimbabwe saw a significant jump in investments in the second quarter of the year with the mining sector attracting most of the investments.
According to the second quarter (Q2 2023) report released this morning by Zimbabwe Investment Development Agency (ZIDA),the period under review saw US$445,70 million worth of investments being recorded.
The Q2 2023 performance, was 189 percent higher than the US$154 million recorded in the first quarter of the year and also higher than the US$337,5 million recorded prior year comparative. This brings the total actual investments in the first half of the year to US$600,19 million.
The mining sector attracted the most investments, with 62 new licenses issued with projected investment value of US$202.7 million. The construction sector was the second-largest recipient of investment, with 6 new licenses issued with a projected investment value of US$59.78 million.
The services sector saw a significant increase in investment as well, with 43 new licenses issued and a projected investment value of US$41,94 million.
Commenting on the outturn, ZIDA said FDI inflows into Zimbabwe remain relatively low due to a number of factors, including the perceived ease of doing business in the country.
The investment promotion agency said feedback from engagements with potential investors within the quarter highlights the need to continue promoting the simplification of the investor onboarding process, improving the investment climate and providing incentives for foreign investors as anchors in driving investment into the country.
“The Agency has been working towards addressing these bottlenecks and continues to make progress through the implementation of various local and foreign initiatives,” ZIDA said.
Further, the Agency has started to initiate domestic direct investment activities through engaging local companies, asset management firms, commercial farmer Unions to deliver the ZIDA role, value proposition and present investment opportunities available for them to partake.
ZIDA chief executive officer, Tafadzwa Chinamo, is on record saying some local investments are not recorded by the Agency as the law does not compel local businesses to be licenced or go through ZIDA.
During the period under review, ZIDA received 157 licence applications and issued 171.
A total 66 of these licences were in the mining sector, 48 in services and 29 in manufacturing. However, in terms of projected value of the investments, the Energy sector had the highest of US$723,91 million. Mining had US$208,9 million.
The highest projection for investment was from Zhongjin Heli Energy (Pvt) which proposed to bring US$400 million towards coal mining and thermal power generation in the Matabeleland North province.
“This is expected to eventually lead to increased power generation and reduction of the power supply deficit should all the projects be implemented as planned,” reads part of the ZIDA report.
The projected value of these investments amounted to US$1,1 million. Project Investment Value is the total amount that is committed by investors for the investment project on the application.
The bulk of the project investment value U$541,263,244 is expected to come in form capital equipment from abroad, US$274,9 million (equity) and US$214,8 million (loans).
