THE Zimbabwe Investment and Development Agency (Zida) says there has been significant improvement in foreign direct investment (FDI) into the country, which is largely being driven by ‘the Zimbabwe is open for business’ approach as spearheaded by the government. The Zimbabwe Independent senior business reporter Mthandazo Nyoni (MN) interviewed Zida acting chief executive officer Duduzile Shinya (DS, pictured) over a number of issues, including investment opportunities in the country and special economic zones. Below are excerpts of the interview.

MN: Tell us about the Rwanda case study. What are we seeking to achieve?

DS: It is interesting to note that the Rwanda Development Board (RDB) has been around for 14 years.  Similar to Zida, they were formed out of an amalgamation of agencies.  For RDB, it was from eight agencies, whereas Zida was from three, these being the Zimbabwe Investment Authority (ZIA), Zimbabwe Special Economic Zones Authority (ZimSEZA) as well as the Joint Ventures Department of the Ministry of Finance and Economic Development.

The RDB has been instrumental in growing investment awareness in Rwanda, creating a conducive environment for doing business in Rwanda, attracting FDI as well as DDI, growing new export markets and expanding tourism in Rwanda.

From the last World Bank ratings on the Ease of Doing Business rankings, Rwanda was ranked number two of the African countries, so when they say they can register a company within six hours, we as a country have to aim to achieve and surpass that benchmark.  This is just one example of how we can learn from RDB, but the key is for RDB and Zida to work collaboratively and closer together for the mutual benefit and improvement of both our countries and operating processes.

MN: I am sure you also keep track of Zimbabwe outward investment. What are the trends?

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DS: We are currently awaiting this information from the Reserve Bank of Zimbabwe (RBZ).

MN: Ever since Zida was formed, have you started seeing some improvement in terms of foreign direct investment into the country?

DS: Definitely, there has been significant improvement in FDI into the country, which is largely being driven by the Zimbabwe, is open for business approach as spearheaded by His Excellency the President of the Republic of Zimbabwe ED (Emmerson Dambudzo) Mnangagwa. The development is also attributable to the improving Ease of Doing Business environment, which is favourable to investors and is a product of various Government initiatives on the economic front. We are receiving a significant number of enquiries by potential investors in the differing sectors of the economy, such as agriculture, energy, infrastructure development and mining.

Fact file: Duduzile Shinya
  •  Is a Chartered Accountant by profession;
  •  Started her career as an auditor or articled clerk at PricewaterhouseCoopers over 25 years ago and has branched into the sphere of corporate finance;
  •  Has experience in financial services, manufacturing (mainly in the Fast-moving consumer goods (FMCG) space) as well as the medical industry, all in the private sector, and gaining experience in the public sector while leading investment promotion and facilitation.
  •  Is the immediate past president of the Institute of Chartered Accountants Zimbabwe (ICAZ).
  •  Sits on the Innscor Africa Limited, Hippo Valley Limited and the Zimbabwe International Trade Fair Company boards.
  •  Also sits on Public Accountants & Auditors Board, Insurance and Pensions Commission and Medicines Control Authority of Zimbabwe board committees.

MN: May you, briefly, highlight some investment opportunities found in Zimbabwe?

DS: In general, there are opportunities in infrastructural development, as well as all commercial and industrial sectors. The main focus is around agriculture, mining, tourism and manufacturing.

Zimbabwe is blessed with a very diverse agricultural environment, which allows us to grow multiple crops all year-round. We have five regions and different soil types in each region. As a country, we boast of a mostly warm and wet climate as well. Major areas of opportunity include maize, cotton, wheat, soya, sugar, livestock, dairy and fisheries.  Agro-processing is an area that is very exciting as it opens up new markets for processed agricultural products.

Zimbabwe has over 60 commercially viable minerals. The Great Dyke (where the majority of minerals are found) is a linear geological feature that trends nearly north-south through the centre of Zimbabwe passing just to the west of the capital, Harare. The Dyke has been commercially viable in mostly the platinum group of metals. Other minerals in abundance in Zimbabwe include gold, nickel, coal, copper, chrome, iron ore, diamonds and lithium, all of these providing opportunities for extraction and value addition thereafter.

Zimbabwe is the only country to be named after a world heritage site and is home to the Great Zimbabwe ruins. It also hosts one of the Seven Wonders of the World, the mighty Victoria Falls. Other destinations to note include the Kariba Dam, Hwange Safari, the eastern highlands mountains, Mana Pools and Matopos to name a few. There are opportunities to develop facilities in these areas and develop new facilities, with particular reference to the Binga-Kanyemba corridor which has not seen significant development covering another beautiful area in our country.

The manufacturing sector is an industry that was destroyed during the early hyperinflationary days. Zimbabwe could not get adequate funding to replace obsolete machinery due to lack of funding through sanctions and a rapidly devaluing currency. The tide has since changed and we have seen large companies (especially exporters) being able to retool and some partnering with external companies to bring in new machinery and equipment

We cannot talk about manufacturing without mentioning the potential in value addition and value chain development and expansion.  As Zida we are working together with the Ministry of Industry and Commerce to rebuild important value chains in the country, such as cotton to clothing, iron ore to steel production, and leather processing to consumer products. These are the key focus areas for 2022.

Zimbabwe has joined the world in driving green energy and hosts one of the region’s major hydro power stations in Kariba. The country is working on a major upgrade to the plant and is planning to include other hydro stations in the multiple gorges along the Zambezi River. There are multiple solar projects being commissioned, but given the level of growth we envisage as a country there is still need for additional expansion.

MN: How long does it take to register a company in Zimbabwe? Can I register my company online?

DS: It takes 48 hours to register a company through Zida working with the Registrar of Companies in Zimbabwe.  Currently, applications are still being processed manually, but an online system is being developed.

MN: How many projects did ZIDA approve last year and what was their value?

DS: A total of 126 new investment projects were approved in 2021 with a combined investment value of US$557,777,155.  Please note, these are new investments excluding projects that were applying for renewals.

MN: Compared to the same period in 2020, how have these figures fared?

DS: There was an encouraging improvement in the number of projects approved between 2020 and 2021 where 76 and 126 projects were approved respectively, representing an increase of 165%. The increase in the number of projects approved did not reflect in the value of the proposed projects, however, where US$557,7 million was invested in 2021 against just over US$1,5 billion in 2020.  The significant difference is attributable to two outlier investments of over a billion worth of proposed FDI in 2020 from two projects in the agriculture and energy sectors with each contributing over US$650 million and US$360 million respectively.

MN: Were all these projects implemented? If so, what was their value?

DS: The value of approved projects in each year shows the commitment by investors.  These commitments can span over a period of one year to a maximum of five years for each project. The role of Zida is to facilitate investments, as such, there is an intensive after care service to monitor and evaluate if the approved projects are being implemented according to plan.  Visits to the approved project sites were severely limited in the years under consideration due to the Covid-19 pandemic, nevertheless many of the projects were verified as being implemented and were operational.

MN: How do we compare with the region?

DS: FDI into Africa fell by 16% in 2020 to US$40 billion from US$47 billion in 2019, according to the United Nations Conference on Trade and Development (UNCTAD)’s World Investment Report 2021. In 2020, Zida managed to approve projects worth US$1,5 billion, which amounts to 3,75% of project proposals for the whole of Africa. There is definitely an opportunity for us to attract more capital and hence the creation of Zida and our drive to improve the investment climate in Zimbabwe.

MN: What factors are driving growth or decline in FDI?

DS: FDI into Zimbabwe is growing on the back of a recovery in the mining, agricultural and the manufacturing sectors. Zimbabwe has also embarked on an extensive infrastructure retooling programme, which has seen the majority of work being done by locals. These include road rehabilitation, multiple new dams and new power generation plants.  Therefore, we need to now start tracking both FDI and DDI to establish whether there is indeed net growth in investments.

MN: May you kindly give us an update on the Special Economic Zones (SEZs). There is a general feeling that Zida has taken a long time to implement them. Why?

DS: Currently there are five municipal areas with gazetted public sector SEZs — these are Masue SEZ in the Victoria Falls area, Umvumila SEZ in Bulawayo, the Belmont Industrial, Kelvin Industria, Donnington Industrial and Westondale SEZ in Bulawayo, Fernhill SEZ in Mutare, Beitbridge SEZ in Beitbridge and the Sunway City SEZ in Ruwa.

With the exception of Sunway City — all the other zones are at early planning stages and require appointment of developers to provide the relevant on and off-site infrastructure, and this can take anywhere from 36 months to 60 months to plan for. The current regulations and processes of development of an SEZ also require the appointment of a developer to undertake this work and provide the necessary documentation in line with an approved Environmental Impact Assessment (EIA) and a solid business case, which clearly speaks to the expected outcomes of an SEZ — whose main focus should be on the manufacture and exporting of goods and or rendering services and trading of goods.

In the present scenario provided for by the SEZ regulations, the process of establishing these SEZs should ideally be led by the licenced land owner and or land authority. Zida is the regulator of the processes and licenses of developers, operators and all investors and will provide the ultimate One Stop Shop Investment Services Centre within the zones — as provided for in the Regulations.

In addition, Zida can work with the land owner and authorities to develop the Zones — through an approved Special Purpose Vehicle (SPV). The current perceived delay in development is anchored around the fact that a large component of the stakeholders involved in the SEZ development process are on a learning curve — with all of them never having established an SEZ. Zida is facilitating training of these stakeholders while processing applications and proposals for the SEZs. In addition, the model to be applied to some of the zones — especially the brownfield zones in Bulawayo requires a new strategy, as the regulations need to be aligned to these already existing sites. The Regulations currently only account for new greenfield projects. Zida has also started the process of aligning the current Regulations with the new Zida Act — in order to ensure that the process of SEZ development is done in line with best practice frameworks but using each Zones competitive and comparative advantages. It is expected that the refined regulations will be gazetted in mid May 2022 after all consultations have been done. Development of SEZs is a long-term process which has been proven to work in a number of countries — only when thorough planning is done.
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