The implementation rate of approved investment projects in the country has doubled, according to the Zimbabwe Investment Authority (ZIA), as appetite to invest in the economy gathers pace on the back of Government’s reforms to improve the business environment.
ZIA chief executive Richard Mbaiwa told Business Weekly in an interview this week that most of the approved projects were being actualised, with the average implementation rate now between 50 and 55 percent.
This is up from 25 percent during the last few years.
“We have done some follow ups and what we have realised is that the implementation rate has gone up,” said Mbaiwa.
“It is a confidence issue built around some reforms being implemented by the Government.”
Internationally, an implementation rate of at least 25 percent of approved projects is acceptable.
ZIA generally gives investors two years to implement their projects, failure of which they should advise the Authority on the reasons for the delay and their implementation plan. Most of the projects are in the mining, manufacturing and services sectors.
“You can see how FDI increased last year and part of the investments are those we approved,” he said.
Zimbabwe recorded Foreign Direct Investment (FDI) inflows of US$745 million in 2018, up from US$349 million the previous year, according to figures from the United Nations Conference on Trade and Development (UNCTAD) World Investment Report.
Some economic analysts attributed the improvement in the FDI flows into the country last year to the “Zimbabwe is open for business” policy; an aggressive investment drive that has been prioritised by the new dispensation. Some of the milestones achieved by the Government in its economic policy reform agenda include the scraping of the indigenisation and empowerment policy criticised for impeding FDI.
Doing business in Zimbabwe also became easier over the past year as the country advanced 15 places to 140th out of 190 countries in the World Bank’s Doing Business 2020 rankings, riding high on the government’s flagship “Open for Business” mantra and the Rapid Results Initiative programme that is meant to attract investment.
President Mnangagwa has emphasised the ease of doing business reforms, which his administration has pursued since his coming into power in November 2018.
To date, the Office of the President and Cabinet has been on the fore front of implementing the reforms under the Rapid Results Initiative and the results are beginning to show with the World Bank’s latest recognition.
According to the Doing Business 2020 report, Zimbabwe implemented five new business reforms over the past year and had a score of 54,5 above the Sub-Saharan Africa average score of 51,8.
The rankings, which demonstrate tangible progress that has been made, should also come as a positive indicator to investors that Zimbabwe is committed to reforms.
“There was so much hope that was brought in by the new Government and this certainly improved appetite to implement.
“However, this is likely to slow down given uncertainties that have been triggered by economic challenges.
“This relates to unstable exchange rate, poor service delivery by utilities, and inflation among others.
“It is important that the Government create an enabling environment that should investment otherwise we may see a big drop going forward,” economist Kurai Nhare said.