Investing in Zimbabwe

With formation of the new power sharing government have come a range of business and investment opportunities in Zimbabwe, both in the public-private sector, private sector and on the stock exchange. We are ideally placed to advise on and facilitate investment in Zimbabwe.

It is significant to note that the barriers to entry in Zimbabwe are very low; there are no minimum threshold investment levels unlike elsewhere in Africa, and there are enormous tax incentives provided you have structured your investment correctly. It is likely that there will be further investment incentives offered in the next few years to attract foreign investment. The ICT sector is currently being de-regulated, and there are sector specific incentives for different investment spheres.

The following incentives are on offer for an investor in the tourism sector for example:

Duty exemption on specified capital goods imported for use in Tourism Development Zones (TDZ’s)

Taxable income of an operator is as follows:

- First 5 years of operation 0%
- Second 5 years of operation 15%
- Third 5 years of operation 20%

Thereafter normal rates of corporate tax apply

Please ask us for the sector specific incentives in your area of interest. At present we have clients in the mining, transport, service provision, engineering, motor, manufacturing and retail sectors who are looking for investors to purchase or invest in current and operational businesses. We can therefore provide links with existing businesses and industry and provide for the specific needs of the investor.

We offer company and trust formation in Zimbabwe for those looking to invest in businesses. As a spin off we can file tax returns and open bank accounts for our clients, and we have a partner law firm who can handle all legal and regulatory compliance issues.

Examples of strategic relationships that have emerged recently are Pick n Pay and MTN. Pick n Pay are utilizing their stake in the TM Supermarket chain to increase their product sales volumes. MTN are seeking a majority stake in the run down mobile phone network Telecel, preferring a take over of an existing and licensed operator with extensive infrastructure, to the exorbitant start up costs of establishing a new network

Contact us to discuss potential opportunities for investment. We can arrange for one of our consultants to meet you and discuss the opportunities on offer and provide some advice on the structure thereof.

INVESTMENT OPPORTUNITIES IN ZIMBABWE

(An excerpt from Hon E Mangoma)

The Inclusive Government is determined to ensure that Zimbabwe starts working again by engendering reforms from both the political and economic arenas- to ensure that there is a restoration of economic stability and growth amongst other things.

Investment Promotion and Protection Agreements

The Inclusive Government is committed to adherence to Bilateral Investment Promotion and Protection Agreements. The BIPPA between South Africa and Zimbabwe was negotiated and is now awaiting signing by the two parties. The preparedness of Zimbabwe to quickly sign this BIPPA is an indication of its readiness to welcome South African investors into Zimbabwe

Multi- currency and Rand Reference Currency

Multiple foreign currencies such as the South African Rand, United States Dollar, Botswana Pula, Euro, Pound Sterling, among others, are now being used as ordinary currency in Zimbabwe. No licenses will be required to trade in foreign currencies.

Taxation

Personal income taxes have been reduced. The maximum duty rate has been reduced to 40%. As mentioned above there are huge benefits to those wishing to enter as foreign investors.

Exchange Controls

In order to remove restrictions on business transactions, Government deregulated restrictive Exchange Controls, and delegated export administration and payment authority to banks.

INVESTMENT OPPORTUNITIES

The Government recognises the need to stimulate investment. Therefore, it is the intended objective of increasing investment capacity from 4% of GDP to over 25% of GDP. Increased investment is meant to underpin sustainable economic growth and development…..

Zimbabwe’s overall investment environment offers a market driven economy with the following attributes:

• Abundant natural resources;
• Well developed infrastructure which only needs some maintenance;
• Access to world and regional markets;
• Educated, easily trainable labour force with at least four years of secondary education, and
• Liberal labour regulations based on collective bargaining.

The specific opportunities that exist in the various sectors are as follows:

Manufacturing

• Industrial intermediate and capital goods, consumer goods and value addition of primary produce (manufacture of fertilisers, textiles and clothing, minerals)
• This sector is currently operating at under 10% capacity

Energy

• Energy opportunities include, Hwange and Gokwe Thermal Power projects; Kariba Hydro extension, Lupane Methane gas drilling and bio-diesel production among others.

Tourism

• Tourism infrastructure such as hotels, refurbishment of airport infrastructure in resort towns such as Victoria Falls and Kariba.
• Readiness for the 2010 World Cup.

Mining

• Resuscitation of existing mines especially gold mines, establishing new mines, cutting and polishing of precious stones, production of jewelry from gold, silver, diamonds, platinum and other minerals.

Agro-industries

• Farming operations including tobacco, cotton, food crops and horticulture. Zimbabwe has one of the best combinations of good soils and climate.
• Manufacturing of agricultural implements and machinery, canning of fruits, vegetables, meat products and fruit juices among others.

Infrastructure

• Infrastructure development will be privatised through Public and Private sector Partnerships. These include dualisation of the Harare –Beitbridge and Harare to Bulawayo roads, upgrading of Kariba and Victoria Falls airports, construction of Kunzwi Dam, completion of Tokwe Mukorsi and Gwayi-Shangani Dams, construction Mtshabezi water pipeline, Zambezi-Bulawayo pipeline The national railway line, Harare-Chitungwiza railway line are some of the significant infrastructural projects were investment is called for.

CONCLUSION

Zimbabwe is ready to accept investors and is working tirelessly to create a conducive investment climate and we encourage South African investors to take advantage of the existing investment opportunities in Zimbabwe as well as advancing lines of credit. There is a strategic window of investment wide open in Zimbabwe at the moment. There is a strategic window for the donor community to strengthen democracy in Zimbabwe and Africa at the moment. Let’s seize the moment before this window shuts.