By
Bernard Bwoni
Here
is a country on the verge of an extraordinary economic reconstruction contrary to
the preordained prospects and ululations from some small corners of cynicism.
The silently unfolding economic genesis is not by default but the design of the
locally-embraced potent policies of economic empowerment. This is a country that
has prevailed over induced adversity and internally-crafted chaos from
starry-eyed opposition politics. The Rozvi-engineered Great Zimbabwe pillars have
remained solidly intact under the opposition-inspired socio-political and economic
disruption. The country has been slowly but surely working hard to steer the
country away from the opposition-procured poverty, mire and mud towards the
revered and foretold economically empowered journey-end. And here is why this
economic miracle is inevitable.
Zimbabwe
is uniquely enriched with ample agricultural resources, mineral resources,
human resources and though in need of revamping, a sound infrastructure which
creates unlimited opportunities for the growth of resource-based industrial
undertakings. With vast amounts of fertile agricultural land, large varieties
of commercially exploitable mineral deposits, a highly educated and skilled
workforce the potential for growth has no bounds.
The
Zimbabwe Law recognises the issue of property rights and this is enshrined into
the new constitution. It guarantees the right to private ownership and Clause
4.28 of the new Constitution addresses the overall issue of property rights
fairly and again in line with international law. The rights are extended to all
people and the rights to compensation are recognised. Part 2, Section
4.29 and Chapter 6 of the Constitution points out that access to
agricultural land is seen as a “fundamental right” and that “every citizen of
Zimbabwe has a right to acquire, hold, occupy, use, transfer, hypothecate,
lease or dispose of agricultural land regardless of his or her race or
colour’’. The rights are extended to all people and the rights to compensation
are recognised. However the issue of property of agricultural land needed to be
and was addressed in line with the need to “redress the unjust and unfair
pattern of land ownership that was brought about by colonialism”.
In Zimbabwe
foreign investment is valued and the priority sectors for investment include
manufacturing, mining and infrastructure development. The country encourages
joint ventures with local investors and has one of the most diversified
economies in Africa with principle key sectors such as manufacturing, mining,
agriculture, services and tourism standing out. It has one of the most
developed infrastructures in Sub-Saharan Africa comprising road and rail
networks, power generation, telecommunications and distribution networks.
Although there is an urgent need to restore and modernise plant and equipment
to restore capacity Zimbabwe does possess a solid and complex base which just
requires an injection of capital and will see the country take off. The economy
has been widely liberalised which allows market forces to operate freely in
virtually all sectors. Zimbabwe has signed the interim Economic Partnership
Agreement with the EU which gives the country duty-free access to the vast EU
market and the EU will in turn also have an 80% duty-free quota access to the Zimbabwe market for their
manufactured products gradually implemented with full implementation in 2022.
The
country presents so many opportunities for the discerning investor in all
sectors of the economy. There are opportunities in the priority sectors for
investment highlighted above and also in reserved sectors where foreign
investors wishing to participate can do so by entering into joint ventures with
local partners. There are potentially profitable opportunities in the country’s
manufacturing sector where capacity utilisation currently stands at around 44%.
The Government’s Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZIMASSET)
has put focus on value addition and benefician and thus opportunities are rife
in those sectors for value addition of primary products.
Zimbabwe
has significantly reduced personal and corporate tax rates which is ideal for
any investor. The government has also drastically reduced or in some instances
eliminated completely import duties on raw materials and other essential
industrial inputs to stimulate the economy. The corporate tax currently stands
at 25% which compares favourably against other African countries for example Angola
35%, Cameroon 38%, Nigeria 35%, Tanzania 30%, Tunisia 30%, Zambia 35%, Morocco
30%, Kenya 37% and South Africa 28%. The government is currently looking at
further tax incentives and creating more conducive environment for investors. They
recently agreed to offer tax incentives to foreign investors intending on
investing in companies requiring huge capital injection. It is a bold move by
the government of Zimbabwe and with a conducive and investor-friendly
environment and favourable tax regime the country is bound to attract corporate
head offices for global corporations seeking to invest on the continent. The
country has also been looking at special economic zones and such process would require
an attractive policy in the form of tax exemptions, tariff reductions and
subsidies for companies operating in the specific zones. Such provisions are
most likely to encourage potential investors into the country.
The
country has made access to prospecting and mining claims readily available either
by pegging or registration of claims and a remittability of 100% of after tax
profits, secure mining title, the immediate write-off of all capital
expenditure, operating losses can be carried forward indefinitely. The country
also has an active stock market with over 75 publicly-listed companies and
favourable geographical environment (Zimbabwe Business Law Handbook).
Zimbabwe
has one of the most elaborate financial and banking systems by regional
standards with an array of commercial banks, merchant banks, building
societies, asset management companies, finance houses and insurance companies.
The investment process in Zimbabwe is also made quite fluid by the highly
effective Zimbabwe Investment Authority (ZIA). The Zimbabwe Investment
Authority is the first port of call for all investors and their website www.investzim.com is vibrant and provides
up to date investment information and processes. All investment information,
facilitation, procedures and documentation to be completed and submitted are
clearly explained. ZIA is there to assist investors and potential investors
with obtaining all necessary permits, licences and all authorisations to fully
set their business in Zimbabwe. The registration process is simple and straightforward.
The potential investor would be required to comply with company registration,
ZIA Licensing which takes 5 working days, residence and work permits and
operational permits which are sector specific. The investor also need to
familiarise themselves with the country’s indigenisation legislation which is
also sector based. Foreign investment in existing companies will require RBZ
approval via the Exchange Control Authority.
Zimbabwe
is a country on the mend and the only way is up. Negative
speculation is contagious and when it prevails any progressive processes are
handicapped. Embracing optimism is a mindset that can be turned into a habit.
When addressing the challenges of today it is important to focus on the endless
possibilities of tomorrow and Zimbabwe is full of boundless prospects. Cynicism
is crippling, pessimism prohibits power and it is the optimistic outlook that
permits power. Positivity keeps the mind in a state of balance and more often
than not opens doors and pathways to resolutions. It is that confidence that
can only cure the country’s current economic impairment. The foreign investor
is a very delicate dealer and the country’s tone could ideally shift to a more
investor-friendly and conciliatory one to expedite the economic revival.
Bernard Bwoni can be contacted at bernardbwn@aol.com/
bernardbwoni.blogspot.com
No comments:
Post a Comment