We want to make burden much less for investors : ZIDA CEO

The CEO of the Zimbabwe Investment Development Agency, Tafadzwa Chinamo (T.C), says the organization seeks to significantly reduce the burden for investors.

He informed our journalist, Mona-Lisa Dube (M.D.), that investors have a plethora of opportunities to choose from. He covered many other topics, including the difficulties ZIDA is facing.

Below are excerpts  of the interview:

M.D You’ve been the CEO of ZIDA for a little more than a year. How has that experience been?

T.C Exciting and challenging as well, but I love challenges like that, but it’s been great overall.

M.D But you’re not new in the business world?

T.C: Yes, I think it sort of dovetails with what I’ve been doing in the past. It is investments, it’s just that the focus is slightly different. We are marketing a whole country now, and trying to draw as much investment into the economy as possible.

Not just foreign investment, but locals as well. And what this job also entails is that in order to do that, you have to set the right environment for investors, or businesses rather, to operate in. So it requires a lot of advocacy and collaboration and cooperation with a lot of government agencies and departments.

M.D: Could you please provide us with further details regarding ZIDA’s mandate?

T.C: Yes, so in our language, we speak of what they call investment promotion agencies. So you can liken that to the marketing department of a country, specifically to attract investment into the country. So the mandate, I guess, is just around that. In the case of ZIDA, specifically, is to create an enabling environment for business. In the past, they used to have this thing about ease of doing business and, you know, World Bank rankings and so forth. So I guess it starts there.

Just  how conducive is this as an investment environment or a destination for investment. Once you’ve done that, then the mandate also requires us to identify these investment opportunities where they are, you know, and articulate them to an investor.

So part of the job here is to just look and scan the entire economy, identify these opportunities. I think when people speak of Zimbabwe or investment opportunities in Zimbabwe, I think the resources dominate and rightly so. I mean, we’ve got the minerals out here. Agriculture is also quite key.

The wildlife is also great here. So essentially is to look at all that and then say to ourselves that, how do we package these for an investor? Obviously, the government has priorities in certain sectors. The President speaks, you know, consistently about leaving no one behind, which means that the distribution of where this investment is in these channels, so it’s channeled, covers all the sectors and all the provinces as well. So I think it’s putting that all together and doing it in a way,bearing in mind that we are not just doing this, you know, in isolation. There is serious competition.

When you speak of the things that I speak about, you know, many other countries have the same thing. The wildlife, the climate, the agriculture. You’re also talking of even the minerals. I mean, a lot of other countries have the same minerals.ZIDA is to ensure that our case or the business case or the investment case is clearly understood and is put forward to investors in a way that stands us apart from our competition.

M.D:  So you speak of competition. So why should investors come to Zimbabwe? What is your selling point?

T.C:  I think this country has  a lot to offer. So like minerals. A lot of other countries have the same minerals. I think here is the type of mineral that we have, and the quality of it. And then also I think for us the potential to do that mining or the extraction of those minerals or the agriculture in a way that is supported by industries that are important for that.

We’ve also got the skills, in all those sectors. So if I look immediately at our competition here in Africa, we hear all the time that when you set up a mine in Zimbabwe, for example, you put an advert in the paper here, you fill up every position that you want with locals. So I think that’s a big plus.The infrastructure here also, I think by our African standards, yes, it might be creaking here and there, but I still believe that we’re not starting from scratch.

Obviously we need to direct investment to support that infrastructure. So that would a  proposition for any investor to come into Zimbabwe,

So I think it’s realizing that the potential is here. And I guess we have not been up until now more deliberate in the way that we go out and market the opportunities in this country.

M.D:  You mentioned earlier that one of your responsibilities is to ensure that the investment climate in Zimbabwe is favorable.How favorable is the investment climate in Zimbabwe?

T.C:  I think if you go to any country, business will always be lamenting or complaining about how  things can be better. But if  you look at the level of investment taking place, I think that shows you the attractiveness. Obviously it’s not perfect because   of issues as well. But if I look at it from a ZIDA point of view,  the engagements that we have had with investors, we engaged over 3,000 investors. The licenses that we’ve issued are over 300 licenses this year. So that tells you that there is indeed interest for people to come and invest here. When they do invest, like in any country, even if you go to the first world, it takes you years sometimes to just get a building permit in some cities. Understandably so because these things impact the environment, they affect the surroundings and so forth. But what we’ve tried to do with ZIDA here is that with our one-stop services investment center, is that we want to make the burden much, much less for an investor. That they don’t have to go to too many places.

So I think that starts to speak of the conduciveness of the environment. Also, I think when investors do encounter obstacles, it’s also how quickly those can be understood and something done about them. So part of our work here is to advocate for a better environment for those investors. So we are always in touch with these investors.

M.D: So what are some of the sticking points when you speak about the issues that you have to address when it comes to maybe policies, investments, when you’re interacting with investors? What are some of their concerns?

TC: So the thing that we encounter a lot obviously is that investors, once a businessman has an idea, they want to set up something. They don’t want too much paperwork in their way. So obviously that normally puts off a lot of people. So we’ve cut down a lot of that. So here at ZIDA, if a foreigner wants to come to invest in this country, we can literally give them the establishing documents.

So they  register their company, the ZIDA license, tax registration, bank account in less than two days. We can do that here.

But then some of the obstacles that they find might be industry specific. So there are some industries where the permitting, which is also another issue of concern to a lot of investors, that they just don’t want too many forms to be filled in. So we’ve also reduced that in a lot of ways. How we’ve done that is that with the MOUs we’ve signed, with key agencies or ministries of government, where a lot of investment is going. So we do have within ZIDA, here at ZIDA, officers say from the Ministry of Mines because there’s a lot of mining permits that have to be given and so forth, Exchange Control Reserve Bank, we’ve got someone here. Those are some of the issues that they also speak about. And investors have this perception that if I put my money into Zimbabwe,I can’t take it out.

M.D: Is that a false perception?

T.C: Look, I think cases differ. I mean, there are cases or instances where if an investor is generating their revenue here in local currency, obviously they have to go through the auction system, and there’s always a lag there. But it’s not that they can’t take it out.

Maybe the time that it takes is frustrating. But we know for a fact that the investors who are generating, who are exporting, or maybe transacting locally here in foreign currency, they don’t have that problem. There’s also a perception, you know,we are always asked, is my investment safe in Zimbabwe? So part of the setting up of ZIDA was to address that.  It’s a commitment by the government that we want to secure your investment. And we’ve not had a case here ever since ZIDA was established where an investor actually lost the business, like it was appropriated, so to speak. So it’s something that we also, I think, have to work on. Other things speak to the infrastructure. We’re obviously targeting investments, so electricity will be obviously a concern to any intensive use of electricity.

M.D: But is that within your control?  Issues to do with electricity, infrastructure, obviously they fall under different ministries within the government. Is there something ZIDA can do about it?

T.C: Yeah, so this is where now we must be proactive because of  the environment that we want to create,. So if electricity is a challenge,it becomes for us something that we must do  about in the sense that we have to attract or draw investment to close that gap.  So obviously part of the sectors that we are focusing on in terms of investment is electricity, is energy. So we are doing a lot to attract investment into solar, into hydro, and even into coal. The infrastructure itself, the roads, that’s another thing If you’re talking about bulk goods.

Ideally you want to move this by rail.  Our rail infrastructure is in a state that needs a lot of investment and upgrade and new equipment and so forth. So those are the things that we also work on. So while we are not the direct authority, we work very closely in identifying the opportunities. And by identifying the opportunities, it’s one thing to say that we need more rail, more goods to be moved by rail. But where is the investment opportunity? So our job is to unpack that.

Others, obviously, like the tax regime and monetary policy or exchange control, our job there  because of the direct contact that we have or interaction that we have with the responsible authorities in that, is to advocate for a better environment. We do understand, obviously, that the policies are there for a reason. So our job is to go beyond that, to even research and find out, and offer better solutions as well.

M.D: Would you say your advocacy or the solutions that you recommend is it actually being considered by the government?

T.C: Certainly, I think it would be a headache. But I would like to look into the future. We have learned a lot on that. Being reactive is never good.  Because also, when you are reacting, it means that whatever policy or position has been taken is problems or challenges. Once you start implementing it.

So what we are advocating for, and the centrality of us within government means that we have access, I guess, to all the ministries and all the agencies,is that we want a situation, and this is something that we’re seriously advocating for, that before laws are passed,I think let’s have that considered view. And in depth, just look into that. If we’re to take this position, what are the implications? I think what frustrates a lot of investors is that they are not forewarned, or they can’t really anticipate what’s going to happen next. And for any business person,I can understand their frustration that when those things happen, you now have, you have taken a certain position and then things change, and you now have to react to that. But if there’s consultation..

M.D : What were your goals for the year 2023, and how much of them did you actually achieve?

T.C : In light of our goals, I’d say we’ve done very well. So ultimately, I think our success is measured by how much investments we attract into the economy, domestic and foreign. Obviously, we had never really set a figure in the past. So in 2023, our target was four billion, split obviously between the foreign direct investment, domestic investment, and reinvestments by investors already established here.

We are only accounting for investors that come through here and are issued with a ZIDA license.  So I know people would say you’re talking about US$4bn, but we are not seeing it, where is that money?

So at the time that an investor engages ZIDA, it’s a commitment, or they’ve done some preliminary assessment to say that if I’m going to set up this operation in Zimbabwe, I am committing to invest, say, US$50m. So that is what we record.

So the US$4bn we hit that, I think, sometime in August and  we went past that. I’ll safely say that we’ll end the year above US$8bn in committed investments. Obviously, like I said, you know, it might be meaningless to say US$8bn, where is it in Zimbabwe?

M.D: Actually, I was going to ask that next.  

T.C: So here’s the process that investors go through, once you’re issued with a ZIDA license and you’ve accessed all our facilities and established, you’re getting all the right permits and so forth. So once you’ve gotten that ZIDA license, you are obliged also to report to us annually and renew that other license. So in that process, that’s where we then really assess how much money the investment have brought in. So if you’ve gone through our quarterly reports, we speak of renewals and actual money that has been invested. But renewals, you see, fall on the anniversary of your investment license. But also bear in mind that these investments take some of them years to establish. If it’s a mine to be fully operational, it might take you seven years.

M.D: As we come to an end of our discussion, could you briefly outline your plans for 2024?  

T.C: Yeah, so I think in a nutshell,I would say that 2024 really is to just build upon what we’ve started in 2023. So 2023, I would say that it was really setting up house, restructuring internally, the departments that we now have, deploying the system that we have, and just getting our game plan, in order. So we’re talking here of ensuring that the processes are flawless and we can really now do those efficiently.

But 2024, because of the growth in output from the mines,which I believe will continue, agriculture, if we have a decent enough rainy season,output there again should grow. So we will encourage investment into that, obviously. But the manufacturing for me,I think the value addition of that output is a key focus area for us.

But the issues that we hear,going back to what you said, with the enabling environment, is it a conducive environment? It’s infrastructure that supports business. So business will obviously speak up about the lack of power. And then the transportation systems.

And then obviously to just make everything much, much better, obviously, is the legislative environment of it. So we are on an exercise now to just really start from scratch, as if to start from scratch, to say that what is it that business is complaining the most about? And what can we do to even fix that? So fixing the environment for us is going to be very, very key.

 

 

Related