POLICYMAKERS should address investors’ jitters relating to policy inconsistency and clarity, a leading research firm has said as foreign direct investment (FDI)continues giving Zimbabwe a wide berth. CHIEF BUSINESS REPORTER
In a latest research note, MMC Capital said the allocation to Zimbabwe of sub-Saharan Africa FDI remained very low.
According latest data from the World Bank, of the $ 31,9 billion FDI that came to sub-Saharan Africa, Zimbabwe’s share was a paltry 1,5%.
“Our view is that there is an urgent need for policymakers to address investors’ jitters relating to policy inconsistency and clarity in a bid to attract FDI,” MMC said.
“Treasury recently hinted that it is in the process of reviewing the regulative legislation such as the Securities Act, as well as synchronising investor policies in a move to restore investor confidence in Zimbabwe.”
MMC said FDI not only added to investable resources and capital formation, but was also a means of transferring production technology, skills, innovative capacity, organisational and managerial practices between locations, as well as of accessing international marketing networks.
MMC said Zimbabwe had to turn to FDI as organic growth was proving to be a mammoth task considering the low rate of savings. It said FDI has become an important source of private external finance for developing countries as compared to portfolio investments.
“It is different from other major types of external private capital flows in that it is motivated largely by the investors’ long-term prospects for making profits in production activities that they directly control,” MMC said.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
Zimbabwe is in desperate need of FDI to help rebuild the economy devastated by a decade of contraction.
Estimates say the country needs in excess of $16 billion for infrastructure. The money is not available locally as revenue from taxes is around $4 billion. The country cannot access lines of credit from multilateral financial institutions beset by the over$6 billion external debt.
