THE Zimbabwe Investment Authority (ZIA) has approved investment projects worth $184 million for the half year ending June 30 2013 compared to $247 million realised in the same period last year as investors continue to be averse due to the country’s policy inconsistency and uncertainty.
Report by Tarisai Mandizha
According to the latest statistics from ZIA, 80 projects were approved, creating employment for 4 118 people in the period under review as compared to 89 projects in 2012.
The manufacturing sector received investments worth $90 million for 32 projects, followed by mining with $81,4 million for 34 projects and the services sector got $9,3 million for 12 projects.
Only two projects were approved for the tourism sector with a value of $3,4 million, while for agriculture, construction and the transport sector, there were no investments during the period.
According to the Mid-Term Fiscal Policy statement announced last month, outgoing Finance minister Tendai Biti revised the year-end economic growth rate to 3,4% from the projected 5% due to political uncertainty after the polls.
Biti said the projected economic growth decline was also reflected by a slowdown in growth of aggregate demand, which is now projected to grow at 7% in 2013, down from the original forecast of 12%.
“The 7% growth in aggregate demand will be supported by rising final consumption, notwithstanding marginal growth in disposable income due to the liquidity crunch money supply,” Biti said.
“While domestic investment was primarily limited by the liquidity challenges prevailing in the economy, foreign direct investment was mainly constrained by perceived risks associated with the elections as well as the indigenisation and economic empowerment regulations of all of which have seen investors adopting a cautionary, wait and see attitude.”
Biti said the private sector investment was projected to be at 6,3% of Gross Domestic Product (GDP) in 2013.
He said the public investments original target of 4,4% remained low and unachievable due to overcrowding from unsustainably high recurrent expenditures of 32,6% of GDP.