Foreign investor applications down 70pc

FOREIGN investor applications dropped by average 70 percent in the first quarter this year compared to the same period last year due to negative international perception, an official has said.

Much of the negative perception has been triggered by threats early this year to expropriate private businesses under the indigenisation regulations and fears over the introduction of bond notes, Zimbabwe Investment Authority (ZIA) chairperson, Dr Nigel Chanakira, said.

Investors had expressed reservations regarding the country’s indigenisation and economic empowerment law until President Mugabe moved in to clarify its provisions in April.

Dr Chanakira told Business Chronicle that although they had done a lot of work, more still needs to be done to clear the scepticism that shrouds the investment environment.

“Between January and April there was a marked decrease, from $909 million to $266 million, which is a 71 percent decline,” he said.

“From our view, this is largely as a result of the uncertainty around indigenisation issues. It is also as a result of what the implications of the bond notes would be.”

The proposed $200 million Afrexim Bank backed bond notes strategy will be introduced into the economy by October this year as part of measures to incentivise exports, boost domestic production and curb externalisation, which critics blame for fuelling cash shortages in the country.

Dr Chanakira, however, said occurrences like the recent stay-aways and demonstrations make investors wary of investing as these tend to give an impression of a hostile environment for FDI.

He said these events negated the ease of doing business reforms that the country had embarked on.

The country has in recent months been implementing a raft of doing business reforms led by the Office of the President and Cabinet.

These are meant to improve the business climate and attract more FDI into the country. — @BiancaMlilo.