Zimbabwe targets processing FDI approvals in hours

The establishment of the Zimbabwe Investment and Development Agency (ZIDA) will capacitate the country to process foreign direct investment (FDI) approvals within a day, Finance and Economic Development Minister Professor Mthuli Ncube has said.

Zimbabwe is working on a plethora of measures to improve the doing of business climate to attract increased levels of FDI in line with the goals of achieving a middle-class economy by 2030.

Updating the nation on progress made in respect of measures being implemented to enhance the country’s economic performance, Minister Ncube said ZIDA should be operational in the next few months.

“We are accelerating and deepening the ease and cost of doing business reforms to improve competitiveness,” he said. 

“This includes the establishment of a one-stop shop investment centre, and legislation to establish a specific and dedicated institution – the Zimbabwe Investment and Development Agency (ZIDA) — is now before Parliament.

“ZIDA is set to be fully operational in the coming months, and will enable the processing of investment approvals within a day, significantly improving the investment climate.” 

Prof Ncube called for patience as economic reform and restructuring are process-oriented.

“I am aware that there are those who are disappointed by the pace of change, and who expected progress to be faster,” he said. “Unfortunately, this was never going to be the case. Reforming, restructuring and rebuilding our economy was always going to take time, and attempts to prematurely accelerate the process are liable to cause greater upheaval and suffering. A sober, strategic and step-by-step process remains the best way to achieve our goal.” 

Zimbabwe’s current reforms are guided by the Transitional Stabilisation Programme (TSP), which was launched in October last year, with the main goals of stabilising the economy, attract FDI and set the foundation for shared and sustained growth.

The country has made significant progress over the past few months in combating the budget deficit on the one hand, and boosting revenues on the other, said Prof Ncube.

“The monthly budget deficit declined from US$242 million in November to a surplus of US$733 million in December, and a provisional surplus of $113m for January, an impressive turnaround in such a short time,” he said.

“Over the past four months, we have made significant cuts to expenditure in five main areas: First, we have ended the unsustainable practice of issuing Treasury Bills to finance the deficit, forcing us to spend within our means and within the  budget.

“Second, we have reduced the public wage bill by cutting salaries of senior government officials by five percent across the board, retiring over 3 000 youth officers, and establishing a more modest bonus system for civil servants that saved over US$75 million in 2018 alone.

“Third, we have diverted our resources to pressing areas by freezing the hiring of non-critical staff, while hiring 3 000 additional staff in the education sector and almost 2 000 in the health sector. Finally, we have cut unnecessary expenditure and ‘perks’ for ministers and MPs, most notably by suspending the procurement of vehicles.

“These measures have been complemented by a concerted effort to widen our revenue base. One prominent example, the 2 percent tax on electronic transactions, was hotly disputed when it was announced, but its impact has been significant. US$166 million was raised in the last two months of 2018, and almost US$100 million was raised in January alone. We project that over US$600 million will be raised during 2019.”

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