Confederation of Zimbabwe Industries (CZI) president Busisa Moyo says policy inconsistencies and failure by the government to address investor concerns on its local ownership policy are major stumbling blocks to attracting foreign direct investment.
“Investors are saying they are waiting for government to review the indigenisation policy. This should be expedited because we are not the only investment destination,” said Moyo at the CZI annual congress which opened in Gweru on Wednesday.
“We need to beautify our investment destination.”
Zimbabwe’s Indigenisation Act, which was enacted in 2008, requires foreign owned companies valued at over $500 000 to cede 51 percent to black locals, which analysts say is not ideal for an economy battling to recover from a decade-long recession.
Last year, Zimbabwe’s foreign direct investment edged up to $545 million — less than 5 percent of the country’s GDP — from $400 million in the previous year, driven by interest in mining, infrastructure and services but still lags regional rivals.
Also, a total of 67 projects mainly in mining and energy worth $971 million were approved in the first six months of this year compared to 76 projects valued at $555 during the same period last year.
But the country fares terribly in the World Bank’s 2015 ease of doing business survey, which puts the country at 171 out of the 189 ranked countries, from 172 in 2014.
It is also ranked 180 out of 189 in terms of the ease of starting a business.
“It’s these small issues that make a difference to the growth of our businesses,” said Moyo.
The AGM is running under the theme ‘Unlocking Manufacturing Competitiveness.’
Moyo urged the government to reengage the International Monetary Fund (IMF) to unlock funding.
“We want to be in good books with IMF . We might not like them but they are the door to investment,” he said.
“If IMF is not in the picture we will always be at the back door.”
Moyo also said high rates charged by utility companies were a major concern to business.
“As industry we are facing high utility charges which range from 30 to 50 percent more than our regional counterparts. This has really impacted on our competitiveness,” Moyo said.
Industry and Commerce minister, Mike Bimha told the congress that the government had set up a National Standards Committee to control the quality of imported products and stamp out smuggling.
The committee will work with Bureau Veritas, the French firm contracted by Zimbabwe to enforce import standards to curb the flow of substandard products into the country.
“Government has set up the national quality standards committee that will regulate the standards of products coming into the country,” Bimha said.
“That regulating authority has been given the power to place an embargo on certain products.”- The Source