Right at the end of last year, on December 17 to be precise, President Mnangagwa performed the final rite that completed the setting up of a fully-fledged Zimbabwe Investment and Development Agency (ZIDA).
He officially launched the agency in the presence of his two Vice Presidents Constantino Chiwenga and Kembo Mohadi and several Government and ZIDA officials.
It was a grand finale following months of several other steps in the build-up.
ZIDA effectively creates a One-Stop Investment Service Centre for investors, raising hope that those with capital will soon find it much easier to bring it for investment in Zimbabwe.
The beauty of this agency is that it will cut the process of having potential investors move from one office to another in search of the right papers to start their business.
This cumbersome process entailed that the investor would end up spending more time waiting to access the right papers, instead of planning and implementing their projects.
ZIDA repealed the Zimbabwe Investment Authority Act, the Special Economic Zones Act and the Joint Ventures Act, all which were dealing with investors separately.
These institutions often carried their work at variance with each other, pronouncing contradictory policies, rules and regulations that ended up annoying some investors.
It is envisaged under ZIDA that within a day, the investor will be able to register a company, obtain a tax certificate number, an environmental impact assessment certificate, a NSSA number and many other necessary documents.
It all started when President Mnangagwa visited Rwanda for the African Union Extraordinary Session of the Assembly of Heads of State and Government in early 2018.
While there, he took the opportunity to visit the Rwanda Development Board, where he was impressed by how the board managed to help that country turn into a darling for investors.
The President asked his Rwandan counterpart, President Paul Kagame, to allow the board’s chief executive officer, Ms Clare Akamanzi, to come to Zimbabwe to interact with his officials.
Ms Akamanzi then visited Zimbabwe for a series of workshops with Government officials on how effectively they could set up ZIDA.
I remember sitting down with Ms Akamanzi for a one-on-one interview in which she explored the benefits the Rwanda Development Board brought to her country and what the envisaged ZIDA could do for Zimbabwe.
Ms Akamanzi made it clear in that interview published under the headline “If Rwanda could do it, Zim can do it” that the Rwanda Development Board was created as a single-point organisation for investors.
She said its creation was a signal in a very practical way to investors that Rwanda was taking facilitation of investment seriously and the country was dedicating an organisation to focus on the key components that investors needed.
One of the insights of the interview was when Ms Akamanzi revealed that before the board was set up, investors would deal with many institutions, making the process of starting a business too long.
Before the board was formed, it would take about 12 procedures, resulting in more than three weeks of waiting, costing US$450 on average to just register a business.
Today, revealed Ms Akamanzi, all of that is done online at the Rwanda Development Board and it’s free of charge, making it much easier for businesses to operate.
This has resulted in an investor being able to set up a company within six hours.
Soon after the visit by Ms Akamanzi, attention shifted to the Zimbabwe Investment and Development Bill, which was passed by Parliament at the end of 2019.
The passing of the Bill and its eventual signing into law by President Mnangagwa clearly indicated how the New Dispensation emphasised on investment as playing a big part in its developmental trajectory.
After he signed the ZIDA law, President Mnangagwa then appointed United Refineries chief executive Mr Busisa Moyo as the board chair, while top private sector investment executive Mr Douglas Tawanda Munatsi came in as the chief executive officer.
Other members of the ZIDA board are Dr Tobias Takavarasha, Mr Kenneth Richard Rupert Schofield, Dr Sylvia Janet Utete-Masango, Mrs Sithandile Ngwenya, Mrs Tariro Ndebele, Engineer Michael James Tumbare, Mrs Nancy Samuriwo and Mr Moosa Hanif Allana.
After completion of these processes, ZIDA should now turn to the real work as mandated under the attendant law.
The agency is expected to carry out deliberate efforts through various means to promote, plan and implement investment promotion strategies for the purpose of encouraging investment by both domestic and foreign investors.
ZIDA is mandated with delivering investor aftercare services, including, but not limited to post-establishment facilitation services that support investment retention and expansion.
The new agency will have to maintain records related to investment certificates, work permits, visas and any other documents pertaining to the licensed investor.
It is expected that ZIDA will accord foreign investors and their investments the same treatment with local investors under the same circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of their investments.
Another milestone being brought by ZIDA that will safeguard investors’ interests is that no investments will be nationalised or expropriated.
The investors will operate freely without being compelled to cede any investment to another person, either directly or indirectly through measures having an effect equivalent to nationalisation or expropriation.
Incentives are one of the most important considerations by investors since they determine if it is worthwhile to commit their capital to a particular destination.
In fact, one of the most debated areas when it comes to attracting foreign direct investment has been around incentives.
Before ZIDA, there were too many organisations dealing with investors to such an extent that the offering of incentives was not properly coordinated.
But proper guidelines on incentives, which will be published by the Minister responsible for Finance, will be set under ZIDA.
These guidelines include (a) general incentives that may be applicable to licensed investors, whether foreign or domestic
(b) special incentives that may be applicable to specific categories of licensed investors such as primary producers, exporters, and investors involved in value-addition and import-substitution projects, whether foreign or domestic; and
(c) any other incentives and conditions that may be applicable to investors, whether foreign or domestic; and in so doing, ZIDA may specify different incentives for domestic and foreign licensed investors.
ZIDA will also take care of the Special Economic Zones, being empowered to declare any area or premises as a Special Economic Zone.
When dealing with an application for an investment licence in the Special Economic Zone, the investment agency will consider the degree of export orientation or import substitution of the project and the extent to which the proposed investment will promote industrialisation of the domestic economy.
ZIDA will also consider the extent to which skills and technology will be transferred for the benefit of Zimbabwe and its people.
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and the extent to which the proposed investment will lead to the creation of employment opportunities and the development of human resources.
Another important mandate for ZIDA is the issuance of operating licences to investors, while handling public-private partnerships.
It is envisaged that ZIDA will eventually decentralise its operations to provinces to help attract investment for local communities in line with the devolution policy.
According to the World Investment Report, Foreign Direct Investment (FDI) was stagnant at US$400 million between 2010 and 2013.
In 2018, the country recorded foreign direct investment inflows of US$745 million, up from US$349 million in 2017.
FDI inflows went down to US$280 million in 2019, but it is expected to have drastically picked in 2020 following massive investments, especially in mining.