Mugabe Forced To Engage West To Attract Investors

Mugabe Forced To Engage West To Attract Investors
Published: 2016 July 05 02:35:27 (2005 Views)
President Robert Mugabe's government has been recommended to re-engage the international community so as to attract investment that will aid the ailing economy, the International Monetary Fund has said.

IMF Resident Representative in Zimbabwe, Christian Beddies told the Zimbabwe National Chamber of Commerce Annual Congress in Victoria Falls last week that the country needs to address the existing structural impediments in-order to attract investment.

“Bold policy action combined with fast-tracking re-engagement with the international community, and the finalisation of the economic transformation programme, including an ambitious macro-economic programme for the next three years will assist in addressing the structural impediments,” said Beddies.

He said Zimbabwe’s competitive advantages include its human resources, location, excellent weather, abundant natural resources, and economic diversity.

Beddies said constraints to Zimbabwe’s competitiveness include inadequate infrastructure, business environment, hiring people, getting permits and conducting business operations, access and cost of finance.

He however said Zimbabwe’s ranking on the World Economic Forum Global Competitiveness has been marginally improving.

On the index, Zimbabwe is faring better than Malawi, and Mozambique but lagging behind Rwanda, South Africa and Zambia.

Beddies said a survey was done to effectively reflect investors’ views about Zimbabwe.

He said a questionnaire was sent to investors in Zimbabwe, representatives of investors in Zimbabwe and global investing firms. From the survey, 56 percent of those interviewed were interested in the non-resources sector, 22 percent in the resources sector and 22 percent in the reserved sectors. Of those interested in the non-resources sector, 33 percent indicated they would invest in the manufacturing sector, 27 percent in the agricultural sector, 20 percent in the financial sector, and 20 percent in the agricultural sector.

He said from the results of the survey, investor concerns included policy consistency and transparency and they also stressed the need for a clear, consistent, and transparent economic, investment, and taxation policies.

Zimbabwe has so far met its commitments under the Staff Monitored Program driven by the IMF and is now on course to receive funding in support of its development agenda.

The SMP was focusing on putting public finances on a sustainable course, while protecting investment and priority social spending, strengthening public finances on a sustainable course, increasing diamond revenue transparency, and reducing financial sector vulnerabilities and restructuring the central bank.

Zimbabwe made considerable progress in stabilizing the economy since the end of the hyperinflation period in 2009.

However, policies deteriorated in 2011 and early-2012, with large wage increases crowding out priority infrastructure and social spending.

This, combined with significantly lower than expected diamond revenue in 2012, resulted in fiscal stress, including accumulation of domestic arrears.

In addition, rapid credit growth combined with slow implementation of financial sector reforms, has exacerbated financial sector vulnerabilities.





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