BusinessSectorsA Zimbabwean ultimatum to root out skeptical investors


Posted on Wednesday, 10 October 2012 13:22

A Zimbabwean ultimatum to root out skeptical investors

Zimbabwe has given foreign investors a six months ultimatum to implement their projects approved by the investment authority or risk losing them.

The Economic Planning and Investment Promotion ministry has mandated the Zimbabwe Investment Authority (ZIA) to carry out regular reviews of investment projects following concerns that most investors were not serious.

In the first quarter of 2012, ZIA approved projects worth $152, 7 million, up four percent compared to the same period last year. 

However, concerns have been raised that many of the projects do not see the light of day, as investors remained skeptical of the economy's future due to a volatile political environment.

ZIA chief executive officer, Richard Mubayiwa says "defaulting investors' must act fast on their pledges. 

"We are not happy with what is happening and in terms of the review, we want investors to fulfil their promises. We are giving them just six months to act," he said.

Although Mubaiwa says it takes time for investors to go back to their shareholders to mobilise capital and resources to implement their projects, he said patience was running out, hence the six month ultimatum.

Before the six month deadline, a minimum of two year grace period was given to investors to start their projects.

 The ultimatum followed ZIA's assessment of approved investments showed that 40 percent of projects authorised since 2009 had failed to come to fruition.

Statistics from ZIA indicate that $6,6 billion worth of Foreign Direct Investment (FDI) projects were approved in 2011, representing a 1 200 percent rise from $520 million in 2010.

China and India, the world's fastest growing economies, together with Mauritius, which had of late attracted the interest of global funds due to a relaxed investment climate and political stability, led investor interest into Zimbabwe in 2011.

In December of that year $3,5 billion worth of FDI  was approved with the mining sector topping the list of areas of attraction after registering projects worth $3 billion.

Economic analysts say although Zimbabwe attracted FDI, a high country risk profile - worsened partnered by fissures with the fractious inclusive government, had failed to stimulate investors into implementing their projects.

Talks of pending elections next March, which many fear could turn violent, has also subdued foreign investor interest on the country.

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