HomeNewsEffective marketing, perception management needed for FDI

Effective marketing, perception management needed for FDI

-

THE much-needed foreign direct Investment (FDI) required to revive the country’s ailing industry can best be attracted through effective marketing and perception management, an official with the Zimbabwe National Chamber of Commerce (ZNCC) has said.

KUDZAI CHIMHANGWA
BUSINESS REPORTER

The international investment community has continued to withhold direct capital inflows primarily citing lack of policy clarity.

This scenario has partly led to a nationwide scaling down and, in many cases, shutting down of industries compounded by an acute liquidity crunch.

ZNCC vice-president David Norupiri yesterday said agro-based linkages need to be revived for downstream industries to benefit as Zimbabwe is an agro-based economy.

“We are an agro-based economy. There has been no support from the banking sector as far as agriculture is concerned as compared to previous farmers who had access to loans,” he said.

He said should Zimbabwe choose to go the path of export-led growth and industrialisation, the positive ripple effects would also lead to a stemming down of finished imports, which have affected local manufacturers.

“The protection of industry would also need to be complemented by initiatives that are in line with regional countries. Non-tariff barriers such as new standards of import quality and issues to do with licensing would also be helpful to protect local industry,” he said, adding that government had already done enough in as far as coming up with direct tariffs.

A recently published United Nations Conference on Trade and Development (UNCTAD) World Investment Report for 2014 shows that FDI inflows stagnated at $400 million last year.

This is in comparison to the $1,8 billion in FDI inflows for Zambia, Mozambique with $5,9 billion and South Africa with $8,1 billion out of $13,1 billion that flowed into the Sadc region.

In a September trade brief for South African-based Trade Law Centre authored by Brian Mureverwi, it is argued that export-driven industrialisation is typically designed to ensure that returns on exports are no less attractive than returns on domestic sales.

“The policy mix requires that where possible inputs are provided at world prices, and exports of the final product are subsidised to compensate for more costly inputs of domestic provenance. At the same time, the domestic market is not strongly protected from competing imports,” he said.

The document states that industrial policy should be dynamic and government departments must have the ability as well as motivation to constantly adapt to the changing needs of the industrial sector.

Another possible route would be import substitution industrialisation (ISI) where domestic businesses receive duty-free imported inputs and protected from finished imports.

“For ISI to yield positive results for development, it should provide limited, time-bound protection. Industries that fail to become competitive should not be protected indefinitely,” said Mureverwi.

Recent Posts

Stories you will enjoy

Recommended reading