Over US$450m ZIDA projects implemented

Nearly 30 percent of the projects licenced by the Zimbabwe Investment and Development Agency (ZIDA) in 2022 are now operational, with the actual investments totalling US$450,3 million, latest data from the agency shows.

Of the 266 projects licenced in 2022, 78 were operational as of June 30, 2024, based on renewal assessments.

The ventures had projected investment of US$2,4 billion. This represents 29 percent of licenced projects operational and 19 percent of projected investment realised.

“Of note is the fact that most of the actual investment made was in the form of capital equipment being contributed by the foreign shareholders,” says ZIDA chief executive officer, Mr Tafadzwa Chinamo, in the agency’s 2024 second-quarter report.

“The foreign currency cash injection of US$85,3 million was through transfers made through the official banking system as well as through Zimra form 47 declarations submitted by the foreign shareholders.”

Implementation rates by sector indicate 50 percent for energy and tourism, 45 percent for services, 42 percent for manufacturing and 20 percent for mining.

Investment realisation follows a similar trend, with 35 percent for services, 20 percent for both services and manufacturing and only 5 percent for mining.

It is, however, important to note that mining projects typically have longer gestation periods, affecting investment timelines compared to other sectors.

The number of licences issued in the second quarter of 2024 increased by 8 percent to 154 compared to 143 issued in the first quarter, and decreased by 10 percent compared to the same quarter last year.

The high number of licences issued follows the improvement in the licencing process as investors have embraced the online Do It Yourself (DIY) licencing portal, which now accounts for 28 percent of all applications submitted since the launch of the portal.

ZIDA recorded a 68 percent increase in the projected investment value to US$1,8 billion during the period under review compared to roughly US$1 billion in the same period in 2023.

However, there was a notable jump in proposed investment values from US$622 million recorded during the first quarter of 2024.

“The provincial distribution of investments mirrors the sectors attracting the most investor interest: mining, manufacturing and services.

Harare Province continued to be the leading province with its well-developed ecosystems for both manufacturing and services, being the attraction for most investors,” said Mr Chinamo.

“However, in terms of investment values, Mashonaland West Province had the highest investment projections constituting 40 percent, closely followed by Midlands Province, which accounted for 33 percent.”

Of the 154 new licences issued with a projected value of US$1,8 billion in the second quarter of 2024, the manufacturing sector had the highest projected investment value which accounted for 41 percent of the aggregate investment value, followed by the energy sector with 35 percent and the mining sector which accounted for 21 percent.

Licence renewals declined by 75 percent compared to the same period in 2023, due to fewer licences eligible for renewal and decreased investor compliance.

Only three licences were renewed on time, representing a 16,6 percent renewal rate for the period. Overall, the renewal rate from the first quarter 2023 to second of 2024 is 14 percent, indicating low investor compliance.

To address this, the agency is launching a campaign to remind investors of the requirement to renew licences at least three months before or after expiry. This is expected to improve on-time renewal rates.-herald