THE investment values of projects licensed in the third quarter of the year were down 66% to US$1,17 billion from the comparable period last year, the Zimbabwe Investment and Development Agency (Zida) has said.
The drop in the investment values comes on the back of a decrease in the issuance of investment licences to 168 in the period under review from 180 in the same period last year amid a deteriorating economic environment.
Such a decrease reflects a slowdown in investor confidence, economic conditions, or changes in the investment landscape in Zimbabwe.
During the third quarter, the Zimbabwe Gold currency took its biggest single day drop, depreciating by 43% on September 27 since its introduction in April, raising fresh macroeconomic instability fears.
The government also announced in the quarter of plans to increase taxes, fees and levies while also indicating that the ZiG could replace the multicurrency regime.
“There was an increase of 9% in the number of licences issued in the third quarter of 2024 compared to second quarter of 2024 and a 7% decrease in the licences issued in the same quarter in 2023,” Zida said in its new third quarter update for the year.
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“The increase in the number of licences issued is linked to the improvement in the licencing process, confirming that investors have embraced using the online DIY [Do-It-Yourself] Licensing Portal.
“However, during this period, the agency recorded a 66% decrease in the projected investment values, when compared to the same period in 2023.”
During the third quarter, 168 investment licences were issued with a value of US$1,17 billion.
Over the same timeframe last year, 180 investment licences were issued with a value of US$3,4 billion.
In a quarter-to-quarter analysis, 2024’s second quarter saw 154 investment licences issued worth US$1,8 billion.
This shows a general decline in the value of investments being recorded.
“The mining sector had the highest projected investment value which accounted for 50% of the aggregate investment value, followed by the energy sector with 22%,” Zida said.
It also reported a 56% decline in the number of licences renewed in the period under review in comparison to the same period in 2023.
The agency added that globally, for the period 2023 to the end of period under review, there was a 100% timeous renewal rate.
“This shows that most investors licensed from 2022 are now renewing their licences upon expiry,” Zida said.
“In a bid to encourage all licensed investors with overdue licences and those due for renewal to renew their licences, the agency activated a campaign advising and reminding investors of the expectation for them to do so and avoid penalties.”
It added: “Out of the 266 projects newly licensed in 2022, 72 were identified as operational by the end of September 2024, based on the licence renewal applications processed.”
Zida said the total actual investment reported upon the renewal of these licences amounted to US$137,29 million, primarily attributed to capital equipment imported into the country by foreign shareholders.
“This shows that 27% of the projects licensed in 2022, were operational in 2024 . . . The majority of projects licensed in 2023 still have valid licences with only three renewal submissions made to date,” Zida said in its report for the quarter.
“Actual investments for these 2023 licensed projects will be reported in the fourth quarter of 2024, coinciding with the agency’s comprehensive rollout of the DIY Portal.”
Zida is now working on an investor sentiment survey, the results of which will be consolidated into a survey report.
“The Investor Sentiment Survey, launched in Q2 in collaboration with the International Finance Corporation (IFC), was closed on September 10, 2024,” Zida said.
“The IFC has commenced the validation and analysis of the responses gathered from the survey’s participants, which will be consolidated into the final survey report.”
The projected value of projects processed through the business development by the end of the third quarter was estimated at US$14,9 billion, after further screening of the projects against a target of US$11,25 billion.