Zimbabwe miss out on FDI

THE World Bank has painted a gloomy picture of Zimbabwe’s economic prospects this year saying the country is not likely to benefit from the rebound forecast for other sub Saharan African countries.

Report by Victoria Mtomba

Speaking at the Mandel Gibs Economic Outlook Symposium yesterday, World Bank senior economist Nadia Piffaretti said African economies were expected to grow at an average of 5% this year.

Foreign direct investment inflows (FDI) into the sub Saharan  Africa region are expected to reach $91 billion.

“Zimbabwe is getting peanuts out of it,” she said.

The country’s FDI in 2011 stood at close to $400 million, but for countries such as Angola, South Africa and Zambia it was above
$1 billion.

Pifarretti said Zimbabwe was not taking advantage of the global boom in mining as the sector was still recovering.

“The mining sector is still recovering. The country was not able to take full advantage of the global boom in mining prices,” she said.
“In the baseline scenario, we project maximum $5 billion investment by 2018. Most production volume would expand in gold and coal with 5 000 new jobs created. In the active policy scenario, investment could reach $15 billion, with 30 000 jobs created.

“Gold, coal and chrome have high potential of absorbing new investment.”

Piffareti said lower growth rates exacerbated vulnerability to internal and external shocks.

However, Economic Planning and Investment Promotion minister Tapiwa Mashakada, who spoke at the same symposium, had a different view about Zimbabwe’s economic growth prospects for this year.

“I am seeing 2013 as a watershed year, as a game changer,” he said.
“This year, even beyond 2013, I can assure you that the use of multi-currency should continue.”

Mashakada said there had been positive changes in the country after International Monetary Fund released to Zimbabwe technical assistance that had been suspended for a long time.

“Very soon, the European Union will be reviewing sanctions for Zimbabwe,” he said. “We expect a positive review of sanctions by the EU.”

Zimbabwe registered the lowest growth rate of 4,4% in 2012 compared to the previous three years after the country adopted the multi-currency system.

The growth rates for for 2009, 2010 and 2011 were 5,4%, 9,6% and 10,6% respectively.

“(The year) 2012 was the climax of the rebound. We started to see serious problems with our growth. The agricultural sector did not do well and there was moderate growth in mining sector,” Mashakada said.
Mandel Training centre together with Gordon Institute of Business Science (Gibs) in Pretoria has been running the symposium since 2010.

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6 Comments

  1. Yes we might say that Bk but you need to take into account the following;
    1. Zim has failed to get international support of its rightful territorial integrity of Land. much criticsm has been labelled to Zim for a taking a step in controlling its resources
    2. Zim had to stand firm on the diamonds issue in order to gain control and to sell them, internationally after serious attempts to block her
    3. Zim has witnessed other fellow Africans who are used by non-Africans to try and oppose any policy brought up
    4. Zim has some leaders and general populace who think that without whites we can do nothing
    5. We still have others who wish to be under Boss and Mistress. The Empowerment Act seeks to empower us Zimbos while taking into account of foreigners, but among us, some think its meant to punish whites. If some one come into your home and claims to rule everything will you accept???
    6. The World Bank claims to be assisting in providing this information but they are part of those who fuel divisions in member states.

    Whilst i do not rule out the fact that we need to reform as Zimbabweans, i feel that we should be supported in our policies…We do not operate in a closed Economy hence we need also to take full recognition of the World needs.

    I don’t intend to cause a stir but just trying to bring out what others do not see. Remember we need to use an eagle’s eye view when we look at Government policy. You would not want to be like a chongololo which will turn when it colides…

  2. Nice post. I used to be checking constantly this blog and I am inspired! Extremely useful info specially the ultimate part 🙂 I care for such information much. I used to be seeking this certain information for a long time time}. Thanks and good luck.

  3. The yave been saying this even as Zimbabwe was recording 9.8% economic growth. Noone will take them seriously anymore.

  4. Zimbabwe urgently need a legitimate gvt freely elected that will begin to craft legislation beneficial to the country as well as those who are willing to take a risk and open businesse in Zim.the current regime is detrimental to the nation no gvt can rule by creating chaos ,for zim to attracrt meaningful FDI it needs to start by looking at the basics such as provision of economic enablers such as provision of water & energy ,transport and the strong judicial sytem,the renco mine saga does not bode well for the image of the country.

    1. Its not about chaos, but it all depends on who is talking. The strikes going on in South Africa, how are those being portrayed around the world. The Marikana murders, how did they affect the image of democratic South Africa and the judiciary. This notion of FDI having to come from the West is just wrong and ill conceived, because the West are borrowing from China and everyone else should borrow from the West, which is bankrupt as you know it. The Quantitative Easing has printed over £350 Billion by Central Bank Of England, rather Bank Of England, and their credit rating, inflation and value of their currency not affected, how is that possible. Forget about justice being independent, just look at the case of the Ex CIA Member John Kiriakou, who spoke against torture, where are the human right groups now.

  5. I thot the sanctions mashakada is talking about were on mugabe and his cronies.its confirmed the mdc made the economy scream thru sanctions the past 12 years,shame

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