THE United States government has found that policy inconsistency, corruption, administrative delays and costs hinder business facilitation in Zimbabwe.
Despite the Zimbabwe Investment and Development Agency (Zida) issuing hundreds of licences, investment levels remain below those of some regional peers, largely due to these persistent issues.
“Policy inconsistency, administrative delays and costs, and corruption hinder business facilitation. Zimbabwe does not have a fully online business registration process, though one can begin the process and conduct a name search online via the ZimConnect web portal,” the US State Department Bureau of Economic and Business Affairs said, in its new 2024 Zimbabwe Investment Climate report.
“The government created the Zimbabwe Investment Development Agency (which replaced the Zimbabwe Investment Authority), the Special Economic Zones Authority, and the Joint Venture Unit to oversee the licencing and implementation of investment projects in the country.”
According to the bureau, the business registration process currently takes 27 days. However, Zida claims that investors can reduce this period to two days if they go through the agency.
“Although Zimbabwe is a participant to the WTO (World Trade Organisation) Investment Facilitation for Development, it has not yet signed the agreement,” the bureau said.
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Zida established a one-stop investment services centre, which houses several agencies that play a role in the licencing, establishment, and implementation of investment projects.
These agencies include the Zimbabwe Revenue Authority, Environmental Management Agency, Reserve Bank of Zimbabwe, National Social Security Authority, Zimbabwe Energy Regulatory Authority, Zimbabwe Tourism Authority, the State Enterprises Restructuring Agency, and specialised investment units within relevant line ministries.
However, the bureau noted that the country did not support any outward investment which many investors had raised concerns about as they have found it difficult to repatriate funds to their home countries.
“Zimbabwe does not promote or incentivise outward investment due to the country’s tight foreign exchange reserves,” the bureau said.
“Although the government does not restrict domestic investors from investing abroad, any outward investment requires approval by the Reserve Bank of Zimbabwe’s Exchange Control Department.
“Firms interested in outward investment would face difficulty accessing the limited foreign currency at the more favourable official exchange rate.”
According to the bureau, Zimbabwe has negotiated investment treaties with 32 countries, but has only ratified 17 including those with the Netherlands, Kuwait, Denmark, China, Germany, Russia, South Africa, and Switzerland.
“Despite these agreements, the government has failed to protect investments undertaken by nationals from these countries, particularly regarding land,” the bureau said.