Zim FDI jumps 49pc, tops sub-Saharan Africa growth

Zimbabwe recorded significant growth in foreign direct investment (FDI) in 2023 at a time most regions in Africa recorded declines, it has been learnt.

According to the 2024 World Investment Report by the United Nations Trade and Development (UNCTAD), Zimbabwe recorded a 49 percent growth in foreign direct investment (FDI) at a time the Southern Africa region recorded a 22 percent growth.

The Southern African region was the only one to record growth as FDI in central Africa slumped by 17 percent, while north Africa dropped by 12 percent. FDI in Africa as a whole was, however, down by 3 percent.

Global foreign direct investment (FDI) fell by 2 percent to US$1,3 trillion in 2023 as trade and geopolitical tensions mainly (Russian and Ukraine conflict) weighed on a slowing global economy.

The World Investment Report 2024 underscores that the headline figure exceeds -10 percent when excluding a few European conduit economies that registered large swings in investment flows.

FDI flows to developing countries dropped 7 percent to US$867 billion, but the decrease varied significantly across regions.

Despite the global slump in FDI, Zimbabwe’s US$588 million worth of FDI during the period under review was the highest in five years despite the fact that the country is under economic sanctions that create bottlenecks for businesses wishing to invest in Zimbabwe.

Nonetheless, the investment in Zimbabwe was still higher than what neighbouring Zambia got (US$108 million), Malawi (US$208 million) and Botswana (US$198 million).

Mozambique and South Africa, however, fared better with total FDI of US$2,5 billion and US$5,2 billion respectively.

Investor interest in Zimbabwe has been growing in the last couple of years and according to the UNCTAD report the country received US$194 million in 2020, US$250 million in 2021 and then US$395 million in 2022 before the 49 percent jump to US$588 million in 2023.

The country’s investment and development agency (ZIDA), also report good numbers with total projected investment value in 2023 amounting to US$9,6 billion from 615 licences issued.

In its 2023 annual report, ZIDA reported actual investment value at US$1,2 billion from 415 licence renewals.

ZIDA said most of these investments were coming from China valued at US$3,9 billion followed by South Africa, valued at US$1,7 billion.

Commenting on the growth trajectory, ZIDA chairman, Busisa Moyo, said the country’s economy is trending in the right direction in terms of both local direct investment and foreign direct investment. He said the country’s FDI growth rate of 49 percent is significant and well ahead of Sub Saharan Africa (SSA) which is at 22 percent.

Moyo, however, said it must be borne in mind that the amount recorded by UNCTAD “is only monetary FDI which excludes machinery, plant and equipment as well as raw material inputs”.

“ZIDA has been working actively to streamline processes to make entry and establishment of investment easier and seamless since inception in 2020 after being the successor to Zimbabwe Investment Authority (ZIA) and Zimbabwe Special Economic Zones Authority (ZIMSEZA). Mining, manufacturing and horticulture remain ‘hot’ sectors for investment,” Moyo said.

Financial economist, Malone Gwadu, said the jump in FDI is a reflection of the positive strides the country is achieving in terms of being competitive in the global investments destinations considerations space.

The country is riding on President Mnangagwa’s mantras — “Zimbabwe is Open for Business” and that “Zimbabwe is friend to all and enemy to none”.-beusinessweekly