The Sunday News
Ngonidzashe Chiutsi and Nqobizitha Dhlamini
THE international business community is slowly gaining confidence in Zimbabwe as a viable investment destination.International delegations continue to visit the country evaluating the situation for possible investment and partnerships. A delegation from the European Investment Bank and European Union Ambassadors visited Bulawayo early this month with the objective of assessing the situation for possible investment.
A representative of the EIB, Mr Jim Hoddes said his team was conducting a follow-up visit on the progress made after the EU secured €7 million to assist Government in implementing the Economic Partnership Agreement signed in 2012.
“There are certain issues that we raised the last time we were in the country on individual projects and Government corporations that have potential to attract investment hence we intended to evaluate the progress and current situation in the country,” he said.
Mr Hoddes said although the mission was purely fact finding, there were possibilities of partnership and investment in the country.
“If we are to invest in the country it will not be our first time and definitely it won’t be our last time.
We have worked well together in the past and we intend to maintain our business ties with the country,” he said.
An economist, Mr David Ruva, said it was important for the international business community to have confidence in the country as a potential investment destination.
“We have come a long way as a country and economy hence international attention means we are heading towards the right direction,” he said.
Mr Ruva said the manufacturing sector needed special attention and foreign investment would give it the jumpstart that it needs.
“Our economy has a lot of potential considering the resources that we have therefore we ought to make the most of the opportunities that are presented to us.
Bulawayo was once the hub of manufacturing hence it would benefit everyone if the industry is revitalised,” he said.
Meanwhile, EU ambassador to Zimbabwe Mr Phillippe Van Damme, has challenged Zimbabwe to expeditiously work on improving its competitiveness on the world market in order to attract investment and enhance economic growth.
In an interview, Mr Van Damme said Zimbabwe needed to open up its economy and improve its competitiveness and attract Foreign Direct Investments (FDI).
“Zimbabwe is an over protected economy and it is one of the countries with high tariffs, it has been found clearly that the over protection contributes to the loss of competitiveness,” he said.
He said Zimbabwe needed to remove the high tariffs that were inhibiting economic growth.
“The gradual removal of tariffs enforces the obligation of becoming more competitive and at the same time by lowering tariffs (it) ensures that people will not circumvent paying taxes at the border. High taxes lead to a lot of smuggling and people circumventing the law,” said Mr Van Damme.
According to the latest global competitive report released by the World Economic Forum in 2014, Zimbabwe is ranked 124 out of the 144 economies. In 2013, Zimbabwe was ranked at 123.
Mr Van Damme said the EPA signed in 2012 was aimed at removing barriers to trade and enhancing co-operation in all areas related to trade.
“The most important advantage of the EPA agreement is that it allows Zimbabwe duty free and quota free to the EU market. These agreements cannot be changed unilaterally and offer a security to the EU market. Zimbabwe will have to gradually liberalise its economy and not totally,” he said.
EU is a traditional importer of minerals, agricultural products and other raw materials that are produced by Zimbabwe and EPAs are aimed at stimulating exports by making use of the duty free-quota free access to the EU.
The agreement is a framework towards the completion of a comprehensive EPA and already gives Zimbabwe 100 percent duty free-quota free access into the EU market with a transition period for rice and sugar.
On its part, Zimbabwe will liberalise 80 percent of its imports from the EU by 2022.
In the EPA agreement the EU bloc cannot expect 20 percent of sensitive products of infant industries.
These products include those of animal origin, cereals, beverages, paper, plastics and rubber, textiles and clothing, footwear, glass and ceramics, electronics and vehicles.
Minister of Industry and Commerce Cde Mike Bimha said the Government was working to improve the industry’s competitiveness.
“I have presented the principles of the amendment of the National Incomes and Pricing Commission Act which we are rebranding to become a National Competitiveness Commission and those principles sailed through Cabinet and were approved and which means we start in earnest the process of making these amendments and bring it to Parliament,” he said.
“However, we won’t wait for the commission to be in place but we will continue to have a representative from the private sector and the Government to work on some of these issues. We also have a Cabinet standing committee on competitiveness to deliberate on these issues,” said Cde Bimha.
The EU is Zimbabwe’s second largest trading partner (after South Africa). EU-Zimbabwe trade balance is in favour of Zimbabwe.
In 2012, total trade between the EU member states and Zimbabwe reportedly amounted to €609 million, with the African country enjoying a positive trade balance of €132 million.
Zimbabwe’s exports to the EU amounted to €370,85 million.
Historically, Zimbabwean exports to the EU have been mostly tobacco, iron and steel, cotton, meat products, horticultural produce, precious stones, sugar and confectioneries.
