China now Zim’s biggest source of FDI
The People’s Republic of China has made huge inroads into the Zimbabwean economy and more investments are expected to pour in following the Zimtrade organised Zimbabwe-China Business Forum underway in Beijing China.
The Asian giant, the second biggest economy in the world, now claims the number one spot in terms of investment into Zimbabwe, according to Zimbabwe Investment Development Agency (ZIDA) chief investment officer Silibaziso Chizwina.
In her presentation at the official opening of the highly subscribed Business Forum, Chizwina revealed that Zimbabwe has 427 licensed Chinese companies in various sectors of the economy, making it the biggest source of foreign direct investment in the country.
“Of those, 228 are in the mining sector, 95 in manufacturing, 57 in the services sector while construction has 15 with the rest shared between, transport, energy, agriculture and tourism,” Chizwina said.
She revealed that 72 of those licences were issued in the last three months and that shows “how much potential there is in our country.”
The huge appetite by Chinese investors is in line with Zimbabwe’s engagement and re-engagement drive and also dovetails with the Zimbabwe is Open for Business mantra.
Continued growth in investments will help the country attain it’s quest to be an upper middle income economy by 2030.
Zimbabwe’s cooperation with China ranges from infrastructure construction and mineral cooperation to investment and trade, and more is expected after this week’s Business Forum.
Chinese giants, Sinomine Resource Group, Zhejiang Huayou Cobalt and Chengxin Lithium Group, have since 2022 acquired lithium mines and projects worth a combined US$678 million in Zimbabwe and are at various stages of developing the mines. The two latter companies are also developing processing plants.
Another Chinese firm, steel giant, Tsingshan Holding Group, through its subsidiary, Dinson Iron and Steel, Tsingshan is building a US$1 billion steel-manufacturing plant that could turn Zimbabwe into one of Africa’s largest producers of iron and steel products. The plant, which will be ready later this year, will initially produce 600,000 tonnes of steel a year and that production could double when it is running at full throttle.
Chizwina said in 2023, US$295 million has come from Chinese investors.
“China remains our highest investment partner in the country for the last three years, they have taken poll position number 1. In 2022 alone, we calculated US$1,3 billion worth of investments came from China alone.
“Our highest investor to date is a US$900 million iron and steel plant which is currently under establishment and estimated to produce 500,000 tonnes of steel by November 2023,” Chizwina said.
Despite these huge investments, Chizwina said Zimbabwe has capacity to absorb more in all sectors of the economy.
Some of the investment opportunities are in the energy sector where there is a deficit of 1,500MW according to Chizwina.
This, she said requires investments in transmission infrastructure, financing of independent power producers and financing investment into renewable energy production through hydro power and solar power.
“These are all areas Government is currently pushing to have many more investors to come on board.
“In addition, our agro-production has a shortfall of about 55 percent which we are slowly covering. The irrigation schemes that we are talking about which the government has been working aggressively to establish through the development of large water facilities like Tokwe Mukosi Dam which is ready for investors to come on board and establish irrigation facilities which the local communities can then anchor on, ” said Chizwina.
Other areas were investors can tap into are in fertiliser, dairy farm and horticulture production.
The cotton to clothing value chain is also another area that offers investment opportunities according to Chizwina.
Housing, infrastructure, roads and rail also offer massive investment opportunities according to Chizwina.
“Our health services have been estimated to require about US$3 bln in investment over the next 5 to 10 years in order to bring in the level of medical facilities to a level which allows our people to be treated within first world facilities,” she said.
Zimbabwe has a deficit of 2,000 hotel rooms, which is another area that offers investment opportunities.
The Zimbabwe-Business Forum, which started on May 30 and ends on June 1, 2023, was organised by national trade development and promotion agency, ZimTrade, to improve the visibility of Zimbabwean products in the Asian market
The Business Forum is not only focusing on trade but investment and tourism as well, according to Zimtrade chief executive officer Allan Majuru.
This is in line with the economic diplomacy being championed by His Excellency President E.D. Mnangagwa whose mantra has always been to open the country for doing business.
-ebusinessweekly
