As ZIDA gets orders, real work should now begin
PRESIDENT Mnangagwa on Monday gave the newly appointed Zimbabwe Investment and Development Agency (ZIDA) executives their orders, a befitting send-off for them to start their work.
The most important message to come out of the meeting was that from now on, ZIDA becomes the leading agency in pushing for the attainment of Vision 2030. Vision 2030 entails Zimbabwe becoming an upper middle income economy by that time.
This vision refers to the transformation of the Zimbabwean economy in all facets, and especially becoming competitive, not only regionally, but internationally as well.
ZIDA is a crucial part of the reform process which the New Dispensation under President Mnangagwa has embarked upon to help elevate the country to desirable levels.
Achieving this vision requires that the necessary institutions are put in place, and ZIDA is one such an important piece in the whole equation.
In fact, both foreign direct investment (FDI) and domestic investment, which ZIDA is meant to promote, have the potential to totally change the status of the economy if handled well.
What should be a matter of priority for Mr Busisa Moyo, who chairs the ZIDA board, and his fellow executives, is to always bear in mind the President’s rallying call, and strive to put that into action.
President Mnangagwa told ZIDA executives that the newly-established institution will anchor economic revival and raise the country’s global business competitiveness.
This places a huge responsibility on ZIDA, whose work is already cut out.
Although the job ahead appears mammoth, there is exuding confidence that ZIDA will come up with rules and regulations derived from the attendant law to excite investors.
While FDI is important, the ZIDA board should also strive to put in place policies that attract local investors.
In fact, both types of investments play a crucial role in economic revival, especially with the promotion of win-win partnerships. A number of developing countries, especially in Asia, have done well economically on the back of attracting investments in various sectors.
In such countries, FDI and other investments have resulted in the creation of jobs and enhancing local human resources skills.
It has also facilitated the movement of new technologies from developed countries to developing ones, resulting in the ease of doing business. Several countries are now able to value add and beneficiate their products mainly because of the adoption of these new technologies.
The main aim of ZIDA should be to go for quality investments that add value to the economic recovery efforts.
If handled well, both FDI and local investments can result in the enhancement of an export-oriented economy. Such an economy encourages exports, as compared to imports which gobble a lot of foreign currency resources.
An export-oriented economy is likely to speed up the industrialisation process, as the country exports goods and services that are on high demand elsewhere.
This policy is mainly credited for the rise of China, Hong Kong, South Korea, Taiwan and Singapore.
The attraction of FDI can result in the boosting of competitiveness of companies, a move that will result in them being able to produce quality goods that can attract takers in other markets.
The ZIDA executives should then strive to perfect local investment policies to ensure that foreign firms can bring their capital without any hindrances.
An important aspect of such policies should be an openness about the incentives and benefits accruing to the investors.
There should be an assurance on the protection on investments, including respect of the rights of investors as provided for in the ZIDA Act.
The first step which ZIDA has taken in this direction is the improvement of the ease of doing business as set in the provisions of the one-stop shop investment centre under the organisation.
This one-stop shop will help assure investors on the first interaction that their concerns are taken care of. The centre makes it possible for the investor to obtain all the required documents and register a company within a short time.
This departure from the old order where the investor would move from office to office in search of the right documents is a vast improvement in attracting investors.
Making Zimbabwe an attractive destination for the investors should be a priority by ZIDA.
This includes coming up with an aggressive publicity strategy that can reach all parts of the world to ensure a new perception about the country’s investment climate.
The desired investment climate does not occur on its own, it is created, and this includes changing the perception of investors on Zimbabwe as a destination.
Lessons should be learnt from other countries that successfully attracted investors in areas like Special Economic Zones.
A look at some of the special economic zones in Zimbabwe shows that there is a lot of work that needs to be done.
Of course, there are some private sector designated special economic zones that are already doing well, and these mainly include firms that have been awarded such status.
But geographical special economic zones still need a lot to be done for them to start attracting firms to set up shop.
In other countries like China, factory shells, roads and access to electricity, water and other services are put in place in such zones well before anyone expresses interest.
Companies will only have to bring in their machinery, install them and start production, but this not yet the case in Zimbabwe.
In terms of production, Zimbabwe is decorated with various raw materials that can easily attract industries to such industrial zones.
What is important is to build on these advantages, and aggressively market them to potential source markets for investments.
The ZIDA board should take a look at the existing environment to ensure that it clears all impediments to the general business environment.
There should be harmonisation of policies that deal with all issues related to both FDI and domestic investments.
Consistency should be the order of the day to give potential investors confidence that they can come and do business to their satisfaction.
For example, the national Budget statement pronouncement of issues related to taxes, excise duty and many other provisions should be in tandem with provisions of the ZIDA Act.
Once investors realise some inconstancies they are likely to lose interest in a destination because the environment will cease to be predictable.
This means transparency and accountability should be the watch words for ZIDA, including the detestation of corruption by its officers.
In the past, some investors have complained of too much bureaucracy which in some cases resulted in them abandoning their pursuits out of frustration.
But it is important that the ZIDA Act and Mr Moyo’s board are creating a new mindset in the approach to handling investments, minimising the risks and increasing opportunities.
Although theories of investment have proved that capital tends to flow from regions where it is concentrated to those with lesser capital, it is also equally true that it flies to destinations where it feels safe.
This is why Government should be complimented for its efforts in creating an environment that is becoming a good haven for both domestic and foreign investment.
And there is confidence that Mr Moyo and ZIDA chief executive Mr Douglas Munatsi are capable of changing the status quo and help make Zimbabwe a favourite destination for capital.
Other members of the recently appointed ZIDA board Dr Tobias Takavarasha, Mr Kenneth Richard Rupert Schofield, Dr Sylvia Janet Utete-Masango, Mrs Sithandile Ngwenya, Mrs Tariro Ndebele, Engineer Michael James Tumbare, Mrs Nancy Samuriwo and Mr Moosa Hanif Allana.
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