Afrexim Bank urges busi­ness re­forms

Chronicle (Zimbabwe) - - Business - Busi­ness Edi­tor

THE African Ex­port and Im­port Bank (Afrexim Bank) has urged Zim­babwe to ex­pe­dite do­ing busi­ness re­forms to at­tract in­creased for­eign di­rect in­vest­ment (FDI).

De­spite hav­ing vast nat­u­ral re­sources, the coun­try has not at­tracted sig­nif­i­cant FDI in the past few years when com­pared to its re­gional coun­ter­parts, an Afrexim Bank of­fi­cial, Mr Gift Simwaka, said.

“We need to fix our in­vest­ment cli­mate as a coun­try. Zim­babwe has not been get­ting enough FDI, hov­er­ing around $400 mil­lion, when others are get­ting up to $2 bil­lion,” said Mr Simwaka while con­tribut­ing dur­ing a Con­fed­er­a­tion of Zim­babwe In­dus­tries congress in Bu­l­awayo last week.

“We need to know that busi­nesses do not go to a coun­try to as­sist its growth but to de­velop own re­sources.”

He, how­ever, said Zim­babwe still has a good in­fra­struc­ture, adding: “I see no rea­son why we can’t change the sta­tus quo.

“We need to work on ar­eas where we have a com­pet­i­tive edge. We need to clear our ar­rears to re­duce coun­try risk”.

Coun­try risk is a sub­jec­tive yet crit­i­cal fac­tor in at­tract­ing FDI for a coun­try as it af­fects in­vestor con­fi­dence and in­forms the level of in­ter­est rates charged by fi­nan­cial in­sti­tu­tions.

Re­serve Bank of Zim­babwe Gov­er­nor Dr John Man­gudya, who at­tended the meet­ing, con­curred that clear­ance of ex­ter­nal and in­ter­nal debt was a pri­or­ity so as to at­tract fresh lines of credit for in­dus­try.

He said the coun­try was tar­get­ing set­tling its ex­ter­nal debts at least be­fore Oc­to­ber while work­ing on a vi­able pro­posal on eco­nomic re­cov­ery. Dr Man­gudya said clear­ing for­eign debt would clean the coun­try’s image.

Zim­babwe is al­ready pur­su­ing a ro­bust busi­ness re­form process led by the Of­fice of the Pres­i­dent and Cab­i­net aimed at im­prov­ing the ease of do­ing busi­ness to at­tract FDI, which the coun­try needs to pro­mote eco­nomic growth and re­cov­ery.

This in­cludes cut­ting the time it takes to open a busi­ness in Zim­babwe and a num­ber of le­gal hur­dles that crip­ple eco­nomic growth.

At the mo­ment, Zim­babwe’s FDIs av­er­age $400 mil­lion per year, a fig­ure that falls be­low re­gional economies that are at­tract­ing ex­ter­nal in­vest­ments at a value of above $2 bil­lion per an­num. The lo­cal busi­ness com­mu­nity has also been urged to col­lab­o­rate with the Gov­ern­ment in dis­pelling neg­a­tive per­cep­tions about the coun­try in the in­ter­na­tional com­mu­nity so as to im­prove in­vestor con­fi­dence and at­tract more for­eign di­rect in­vest­ment (FDI). —

Newspapers in English

Newspapers from Zimbabwe

© PressReader. All rights reserved.