For­eign in­vestor applications down 70pc

Chronicle (Zimbabwe) - - Business Chronicle - Bianca Mlilo

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.

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