Why Invest In Zimbabwe?

The Republic of Zimbabwe, situated in Southern Africa, presents itself as a compelling investment destination owing to its abundant resources and skilled workforce. With a diversified economy, Zimbabwe offers a wide array of opportunities for growth across various sectors, including tourism, mining, agriculture, education, transportation, infrastructure development, manufacturing, and information and communication technology. Under the leadership of His Excellency Dr. E.D. Mnangagwa, President of Zimbabwe, the country has adopted the mantra of being "Open for Business," signalling a welcoming environment for genuine and capable investors from around the globe. This commitment has led to fruitful business ventures within Zimbabwe and collaborations with international partners, resulting in significant inflows of Foreign Direct Investment (FDI). Since 2017, the government has undertaken a series of reforms under the New Dispensation, culminating in a comprehensive two-year Transitional Stabilization Programme (TSP) from 2018 to 2020. Additionally, two successive five-year economic blueprints, known as the National Development Strategy (NDS1 and NDS2), have been introduced to guide the country's development efforts from 2021 to 2030. These reforms have reshaped Zimbabwe's economic trajectory and narrative, focusing on transparency, accountability, and efficiency across various sectors. Key areas of reform include engagement with the international community, fiscal and monetary reforms, legislative reforms, corporate governance, zero tolerance for corruption, and investment reforms. These measures aim to foster sustainable growth and development by creating an enabling environment for businesses to thrive. To improve the ease of doing business, the Zimbabwean government established the Zimbabwe Investment and Development Agency (ZIDA) in 2020, serving as a one-stop-shop to promote and facilitate both domestic and foreign investment. Incentives to attract FDI include tax breaks for new investments by foreign and domestic companies, along with tax deductions for capital expenditures on new factories, machinery, and improvements. Zimbabwe offers investment opportunities across various sectors:
Zimbabwe presents a potentially rewarding investment climate, with various sectors such as agriculture, mining, energy, and tourism attracting significant investor interest. The Government of Zimbabwe (GOZ) adopted an "open for business" policy in 2018, aiming to encourage more foreign direct investment (FDI). For instance, the GOZ set an ambitious $12 billion target for the mining sector by the end of 2023 and has called for increased investment in renewable energy.
To facilitate investment, the government established the Zimbabwe Investment and Development Agency (ZIDA) in 2020, serving as a one-stop-shop to promote and facilitate both domestic and foreign investment. Incentives to attract FDI include tax breaks for new investment by foreign and domestic companies, along with tax deductions for capital expenditures on new factories, machinery, and improvements. Import taxes and surtaxes on capital equipment have been waived, further incentivizing investment. The 2020 Finance Act (No 2) amended the Indigenization Act to remove language designating diamonds and platinum as the only minerals subject to indigenization, ending indigenization requirements in all sectors. This move provides clarity and reassurance to investors, eliminating barriers to investment across various industries. The government has also taken steps to improve the ease of doing business by reducing regulatory costs. However, challenges such as policy inconsistency and weak institutions persist, frustrating businesses. Nonetheless, the government's commitment to creating a more investor-friendly environment is evident through initiatives like ZIDA and the amendment of the Indigenization Act.
Despite concerns about corruption and property rights protection, the government has made gradual progress in improving the business environment. Additionally, the reduction in the proportion of foreign exchange surrender requirements and statements reassuring investors regarding indigenization policies demonstrate a proactive approach to addressing investor concerns.
It's important to note that while the United States has imposed financial sanctions on certain individuals and entities from Zimbabwe, U.S. companies can still do business with Zimbabwean individuals and companies not on the specially designated nationals (SDN) list. This provides opportunities for legitimate business transactions and collaborations between U.S. and Zimbabwean entities.