Zimbabwe: Investor interest versus actual investment

In an article he wrote for the Sunday Mail, presidential spokesman George Charamba suggested Xiang’s power plant ambitions had been frustrated by the previous administration: “But he (Xiang) has been knocking on Government offices for the past three years, to no avail. Still, he didn’t give up on us.

“In that 30-minute meeting (with Mnangagwa), the investor was able to walk away with concrete commitments on all his requirements, opening the way for an early start to the project.”

Another Chinese billionaire Zhang Li, who is considering investing over $1 billion in the Zimbabwe Iron and Steel Company, also returned, having first come to Zimbabwe in October, 2017, when he was hosted by former President Robert Mugabe.

ZIA statistics of licenced projects, juxtaposed with data from the United Nations Conference on Trade and Development (UNCTAD), reveal a significant variance between FDI approvals and actual investment.

The UNCTAD publishes an annual report on global investment, which provides details of FDI trends at the national, regional and global level. The UNCTAD’s World Investment Report is a widely used resource for FDI data.

While ZIA has approved projects worth an average $1 billion annually over the past few years, Zimbabwe’s FDI has averaged $400 million since 2013.

While ZIA data shows an increase in investor interest in Zimbabwe, with $950 million worth of approved projects comparing favourably with the annual average value of approvals in previous years, there is no evidence to back up Mnangagwa’s February claim, made at a Guruve rally, that the country secured more than US$3 billion in FDI in seven weeks as reported by The Herald.

In subsequent pronouncements, Mnangagwa appears to be cautious as he talks about FDI commitments, not secured investment.

As the ZIA and UNCTAD statistics show, approved projects and actual FDI investments vary significantly. As such, commitments to invest demonstrate interest but do not paint the whole picture.

By Nelson Banya fort ZimFact

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