This presentation explores possible ways in which Zimbabwe can promote and facilitate Foreign Direct Investment (FDI).

1. Zimbabwe
Attracting Foreign Direct Investment

2. Current Economic Situation of Zimbabwe
 Zimbabwe has several incentives designed to attract FDI, including tax breaks for
new investment by foreign and domestic companies and allowing capital
expenditures on new factories, machinery, and improvements to be fully tax
deductible. The government also waives import taxes and surtaxes on capital
equipment.
 These incentives, however, have not been successful in securing FDI and Zimbabwe
has experienced an economic decline that has resulted in hyper-inflation of 231
million percent and an unemployment rate of over 90 percent.
 The economic decline of Zimbabwe has mainly been caused by poor monetary
policies, failure of fiscal policies to control the budget deficit and corruption.
 As such, Zimbabwe continues to under-perform with the country recording an
almost 23 percent decline in FDI in-flows received in 2015.

3. Current Constraints to FDI
 The Zimbabwean Government states
that it encourages public-private
partnerships and is attempting to
create a stable environment to
improve the investment climate,
however, statements and actions of
many senior government officials,
are inconsistent with the desire to
attract FDI.
 Policies are generally viewed by
potential investors as unpredictable
and there is a general lax in
implementation.
 In the past three years, the
Zimbabwean government has not
conducted an investment policy
review through the Organization for
Economic Cooperation and
Development (OECD), the World
Trade Organization (WTO) or the
United Nations Conference on Trade
and Development (UNCTAD).
 This signals to potential investors
that the country is not serious about
FDI.
Sentiment towards FDI Investment Policy Reviews

4. Current Constraints to FDI
 The Indigenization and Economic
Empowerment Act requires that
"indigenous Zimbabweans" (black
Zimbabweans) own at least 51
percent of all enterprises valued over
$500,000. In certain sectors, such as
primary agriculture, transport
services, and retail and wholesale
trade including distribution, foreign
investors may not own more than 35
percent equity.
 Application of the Indigenization Act
is inconsistent with the need for FDI,
resulting in many questions regarding
compliance with the Act.
 Zimbabwe does not have an online
registration process. The country
encourages companies to register
with ZIA and the process currently
takes as long as 90 days.
FDI Laws Business Registration

5. Current Constraints to FDI
 A foreign investor wishing to
establish a business in Zimbabwe
requires an investment license issued
by the Zimbabwe Investment
Authority (ZIA) as defined by the ZIA
Act and must obtain operating
permits from relevant government
agencies.
 As government revenue declined,
court resources have dwindled and
dockets have become backlogged.
Local courts lack funding and other
resources necessary to hear cases in
a timely manner and therefore most
international investment disputes
take years to resolve.
FDI Screening Legal System and Foreign Courts

6. Current Constraints to FDI
 A foreign investor wishing to
establish a business in Zimbabwe
requires an investment license issued
by the Zimbabwe Investment
Authority (ZIA) as defined by the ZIA
Act and must obtain operating
permits from relevant government
agencies.
 As government revenue declined,
court resources have dwindled and
dockets have become backlogged.
Local courts lack funding and other
resources necessary to hear cases in
a timely manner and therefore most
international investment disputes
take years to resolve.
FDI Screening Legal System and Foreign Courts

7. Potential FDI Solutions
 Focus on creating a more stable economic and political environment. This will
reduce the risk associated with investing in Zimbabwe currently.
 Develop an Investment promotion and facilitation strategy for the country.
Investment promotion, attraction and facilitation can be defined as sourcing,
promoting, communicating with, and attracting potential investors in an attempt
to influence them towards investing in your location, and to facilitate and
maintain new and existing investor relations to influence the establishment of new
investment and the retention and expansion of existing business. This will help in
focussing all investment related agencies towards encouraging FDI.
 A significant focus of the Investment Promotion and Facilitation Strategy, should
be the implementation of a One-Stop Investment Shop (OSS).
A few general solutions towards attracting FDI

8. One Stop Shop
 A OSS provides a single point of contact for potential investors.
 The main purpose of a OSS is to simplify and shorten administrative procedures
and guidelines for issuance of business approvals, permits and licences, thereby
removing bottlenecks in establishing and running businesses in your location.
 All services provided by the physical OSS in Zimbabwe should also be available
virtually via a web portal to ensure that all potential investors have access to
application documents and information about the economic sectors within
Zimbabwe. This will save investors time and money and will also cut out the
frustrations involved with regards to paperwork and red tape surrounding foreign
investments.
 One-stop-shops are overall directed towards creating an enabling environment for
investors. The extent and range of services offered by one-stop-shops vary from
country to country.

9. One Stop Shop
 One-stop-shops often brings together and hosts investment-related agencies and
regulatory bodies under one roof. Dependent on the One-Stop-Model used, it may
or may not require co-operation between investment-related agencies and other
external (national, federal) ministries.
 The one-stop-shop attempt to reduce red tape, fast tracks and simplifies
processes involved with the starting up of businesses.
 One-stop-shops can assist with procedural processes as well as hands on consulting
services.
 IT interfaces may include public website IT interface e-services enables investors
to access services from anywhere in the world, “in house” services for investors as
well as IT systems that link one-stop-shop to decentralised agencies for processing
of documents.
 Time frames are delegated to the different services provided as well as processing
of applications.
 Successful OSSs: Gauteng Investment Centre, Nigeria, Rwanda, Egypt, Singapore,
Thailand, Malaysia, Mauritius, Canada
Key Attributes:

10. Services to be offered by Zimbabwe’s
OSS:
- Marketing
- Advertising
- Support Services,
Information
Packaging and
Updating
- Image Building
- Land and Project
Packaging
- Networking and
Building
Relationships
- Ensuring a
Favorable
Investment Climate
- Influencing
Investor Decision-
Making
- Facilitating
Stakeholder
Engagements
- Problem Solving
- Information
Provision
- Support Services
Arranging Site
Visits
- Monitoring and
Evaluation
- Business Support
Services
- Export/ Trade
Promotion
- Business
Retention and
Expansion
- Ongoing
Information
Provision
- Strengthening
Relations
- Customer Care
Investment
Promotion
Investment
Facilitation
Investor
Aftercare

11. References:
 Munangagwa, Chidochase L. (2009) “The Economic Decline of Zimbabwe”
Gettysburg Economic Review: Vol 3, Article 9
 Foreign Direct Investment for Development: Maximising Benefits, Minimising Costs,
OECD. 2002. OECD Publications Service: France in KZN Provincial Investment
Strategy.
 Bureau of Economic and Business Affairs. (2016) “2016 Investment Climate
Statements: Zimbabwe” Available at:
https://www.state.gov/e/eb/rls/othr/ics/2016/af/254261.htm
 Urban-Econ. (2016) “Investor One-Stop Shop Case Studies”