Time to redesign our investment systems

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FOREIGN Direct Investment (FDI) levels in the country have not grown to desired levels as some processes to enable one to do business locally are putting off investors.
Last year, according to Zimbabwe Investment Authority (ZIA), the country attracted US$400 million, a figure not so impressive compared to FDIs elsewhere in the region.
Countries like South Africa received the highest FDI attracting US$8,1 billion out of the US$13,1 billion that flowed into the Southern African Development Community (SADC) followed by Mozambique with US$5,9 billion according to the United Nations Conference on Trade and Investment (UNCTAD) World Report 2014.
The US$400 million figure is not the lowest in the region, but pales in significance when juxtaposed against that of neighbouring countries.
Finance Minister Patrick Chinamasa is on record saying the country is open to FDI from anywhere in the world.
The FDIs are expected to jolt the country battered by more than a decade of Western embargoes that crippled industry.
Fresh capital and new technologies are desperately needed to revamp the economy.
However, illegal sanctions imposed by the West continue to play a significant role in deterring potential investors especially European investors and those from the US.
Zimbabwe attracted less than one percent of FDI towards Africa despite being the most suitable destination considering that the country has a highly educated population, good basic infrastructure and vast natural resources.
Sadly failure to attract FDI cannot only be attributed to reasons stated above, but local ones such as the cumbersome processes involved to set up a business in the country.
Foreign investors have been put off by the processes involved in setting up shop in the country.
Investors have labelled the process as an uphill task.
The One-Stop-Shop (OSS) has not had the intended results mostly because it is manned by junior officers that are not in a position to expeditiously make decisions.
Economists observed that delays by Government ministries to approve foreign investments were hindering developmental projects in the country.
In an interview with The Patriot, Zimbabwe Youths Development Trust president, Aaron Mupandawana, said Government should speed up authorisation of foreign investment projects and remove the red tape stalling implementation.
“Some of the business entities are not seeking funds from Government, but just approval to implement various life-transforming projects,” he said.
“We are disappointed by the amount of time being taken to make decisions (with regards to projects) by all sectors of the Government, a behaviour that is discouraging some investors coming to Zimbabwe.
“It has now become a norm that Government takes its time to make decisions towards certain ventures.
“We appeal to Government to do away with these delays.”
Mupandawana said some foreign investors wanted to fund developmental projects, but became skeptical after ‘unrealistic’ delays.
He said the delays in approving projects prejudiced communities that stood to benefit from the various initiatives yet to be implemented.
“We are not looking for funds from the Government as we understand that our national coffers are not adequate to finance our projects,” he said.
“We have managed to attract a lot of investors outside the country in different sectors of the economy; we are only waiting for the Government to grant us authority to execute proposed projects.
“It is not supposed to be difficult to receive support from Government to carry out developmental projects.”
The country’s investment figures doubled between 2010 and 2011 when ZIA’s OSS was opened in 2010, but now the figures have only grown marginally.
The OSS greatly reduced time taken for approvals from around 49 days to five.
However, the system is not fully operational as Government departments have seconded officers to the OSS who do not have decision-making powers especially the authority to issue licences, but only facilitate the process.
The ZIA said it is set to launch the digital OSS in a bid to increase efficiency on investors’ application process and communication with other Government departments.
The chief executive officer of ZIA, Richard Mbaiwa said the digitalisation of the investment centre would ease delays between investors and other Government departments in seeking approval of projects.
Meanwhile, the ZYDT is still waiting for approval to construct the Harare-Chitungwiza railway line.
Mupandawana said the organisation had found a Chinese investor who was willing to finance the project.
“We have managed to source an investor for our railway project and the Chinese partner is ready to start infrastructural development for the route,” he said.
“The only delaying factor is approval from the Ministry of Transport and Infrastructure Development.”
Mupandawana said if implemented, the railway line project will give life to the Zimbabwe Youth Development Bank that failed to take off last year after its proposed capitalisation deal with Zimbabwe Mining Development Corporation collapsed.
The bank was meant to provide microfinance solutions to youth-led start-ups and existing businesses countrywide.
“The Chinese investor has also shown interest in the establishment of the bank,” he said.
“Our plan is to capitalise the bank through proceeds from the railway operations, hence the project will create more funding for other youth projects through the bank.”

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