Zimbabwe’s three (3) main entry points for foreign investment are; the Zimbabwe Investment Authority (ZIA), Zimbabwe Stock Exchange (ZSE) and the Reserve Bank of Zimbabwe (RBZ).
Guidelines for Establishing Greenfield Investments
The Zimbabwe Investment Authority (ZIA) is the country’s investment promotion body set up to promote and facilitate both foreign direct investment and local investment. It is the prime investment promotion body that deals with “Greenfield Projects,” that is, investments into new projects.
The investor has a variety of options to set-up operations in the country. The most form of limited liability company is private company limited by shares. The Companies Act [Chapter 24:03] administers various companiesand Cooperatives Societies Act [Chapter 24:05] governs cooperatives in Zimbabwe.
Business Registration Process
Zimbabwe introduced several reforms that resulted in streamlining business start-up process. The following are the registration procedures;
Table 3: Business Registration Process
| Step | Turnaround Time | |
| 1. | Company registrationFile MOU and Articles of Association with the Registrar of Companies, CR6 & CR14 Form. Online name search. | 2 days |
| 2. | Zimbabwe Investment Authority Licencing· Lodge application through ZIA 1 Form which can be downloaded on ZIA website.
· Attach primary company registration documents, brief business plan, CVs for Directors/ shareholders. |
2 days |
| 3. | Immigration Control Department· Application for investor and temporary employment permits | 5 days |
| 4. | Registration with Zimbabwe Revenue Authority for Tax Purposes· Registration for PAYE, Income Tax, VAT, Customs Duty
|
3 days |
| 5. | Environment Management Agency· Only for projects which requires Environment Impact Assessment Licence e.g. mining, manufacturing and infrastructure development.
NB. Provisional approval is granted upon submission of application |
Guidelines for investing into Existing (Brownfield) Investments
The RBZ through its Exchange Control Division, administers and facilitates foreign investments into existing entities and operations, also known as Brownfield investments. Such investments, largely take the form of dilutions, mergers and acquisitions, rights issues, cross-border investments and restructuring. All these investments require specific Exchange Control approval.
Foreign investors may invest up to 100% in unlisted companies for existing projects and Exchange Control permission is granted for such investments. These applications are in respect of foreigners investing into existing local enterprises not listed on the Zimbabwe Stock Exchange (ZSE).
Applications for Exchange Control approval of Brownfield investments are submitted through Authorised Dealers (banks) for onward submission to the Reserve Bank.The turnaround period for approving such investment proposals is 2 days.
Guidelines for investing in the Money Market
Foreign investors may subscribe for up to 100% of primary issues of bonds provided the purchase is financed by inward transfer of foreign currency through normal banking channels.
There is no limit on the level of participation by each investor, who are free to dispose of their investments in the secondary market. The foreign investors are also free to buy and sell bonds in the secondary market.
However, the Reserve Bank requires that investors provide proof of transfer of funds through normal banking channels. Disinvestment proceeds are freely remittable without prior seeking Reserve Bank approval.
Foreign investors are free to purchase any other money market instrument offered by banks without seeking prior Reserve Bank approval.
Guidelines for Investing on the Zimbabwe Stock Exchange
The Zimbabwe Stock Exchange (ZSE) provides an alternative avenue for Foreign Portfolio Investment (FPI) injection into the local economy through the stock market. There are various active counters listed on the ZSE from various sectors of the economy including mining, agriculture, tourism, services and manufacturing.
Such a wide range of share offerings provides foreign investors with a choice of sectors to invest in. Some counters on the ZSE have dual listings, which entitles them to listing on other foreign Stock Exchange markets. Foreigninvestors willing to participate on the ZSE are required to observe the regulations regarding purchase and sale of securities.
Guidelines for Investing in Special Economic Zones
The Government is in the process of implementing Special Economic Zones (SEZs) which were ushered in by the promulgation of the Special Economic Zones Act [Chapter 14:34] in October 2016. The country’s SEZs are focussed towards value addition and exports generation and the prioritised sectors include agriculture, manufacturing, mining, tourism, services and information communication technology (ICT).
All investment proposals into the SEZs are considered by the Special Economic Zones Authority.
Guidelines for Provision of External Loans
The country seeks to access external loans at sustainable prices to support the productive sectors of the economy. Foreign investors wishing to lend funds to local borrowers are free to do so in line with existing Exchange Control Guidelines on External Borrowing (ECGEB).
The country’s external borrowing guidelines seeks to promote the provision of long term financing by external lenders as the pricing of the external loans rewards lenders providing long term financing to the country as follows:
Table 4: Pricing of External Loans
|
||||||||||||||||||||||||||||||||||||||||||
Tobacco financing, shareholder loans and notional vendor finance have a different pricing model which is as follows:
Table 5: Pricing of External Loans for Tobacco Financing, Shareholder Loans & Vendor Financing
| (All charges per annum except L/C Confirmation fees) | Tobacco Pre/Post Export Finance |
|
|
| Margin Above Reference Rate of up to (p.a) | 5.00% | 5.00% | |
| Commitment Fees (Only for committed lines) | 0.50% | 0.50% | |
| TOTAL MARGIN | 5.50% | 5.50% | |
| L/C Confirmation Fees (per quarter) | 1.50% | 1.50% | |
| TOTAL FOR FLAT FEES | 4.00% | 4.00% |
For ease of administration and to enable timeous drawdowns by borrowers, all external loans of up to USD20 million are processed at bank level and those above USD20 million are approved by the Reserve Bank in line with the external borrowing guidelines.
In order to provide comfort to the external lender, the Reserve Bank allows borrowers to securitise their external borrowings with immovable property, securities, minerals and plant and equipment. However, such securitisation arrangements would require prior Reserve Bank approval.
Priority Areas of Investment
Zimbabwe’s remarkable resource and diversified economy makes it an attractive destination for investment. The priority areas of investment include mining, manufacturing, agriculture, tourism, ICT and infrastructure development.
Mining Sector
Mining is the major attraction of the country with over 60 international tradable minerals. Zimbabwe has the second highest deposits of platinum in the world. Major mineral belts include: The Great Dyke belt (PGMs, chrome, gold etc.), Coal fields include Beitbridge–Gokwe-Hwange belt and Marange diamond fields.
The following Table presents the top 9 minerals in the country and their estimated resources;
Table 6: Top 9 Minerals in Zimbabwe
| Mineral | Estimated Resource | |
| 1. | Gold | 13 million tonnes |
| 2. | Platinum | 2.8 billion tonnes |
| 3. | Chromite | 930 million tonnes |
| 4. | Coal | 26 billion tonnes |
| 5. | Nickel | 4.5 million tonnes |
| 6. | Diamonds | 16.5 million tonnes |
| 7. | Iron Ore | 30 billion tonnes |
| 8. | Copper | 5.2 million tonnes |
| 9. | Coal Bed Methane | Largest known reserves in Southern Africa, exploration work ongoing. |
Source: Ministry of Mines and Mining Development
Foreign investorsare free to invest in the mining value chain which include provision of finance and technical services, exploration, extraction, logistics, beneficiation and value addition.
Foreign investors are allowed to own 100% shareholding for mining operations in all other minerals except for platinum and diamonds which the foreign investor is expected to jointly own with the Government on a 49/51% basis in favour of the Government.
Manufacturing Sector
The sector is well diversified and possesses strong linkages with other productive sectors of the economy. Opportunities for investment in the manufacturing sector presents themselves in form of joint ventures and/or strategic partnerships in companies under Industrial Development Corporation and other private sector companies. The diversified industrial base provides potential investors with a number of investment opportunities, some of which are;
Table 7: Investment Opportunities in the Manufacturing Sector
| Sub-Sector | Description |
| Textile industry | Zimbabwe produces one of the best cotton in the world and great opportunities exist for value addition. |
| Meat Processing | Canning of beef and poultry represents a major investment area, the country has lucrative export markets in the region, Europe and the Far East. |
| Canning of vegetables and fruits | Canning of vegetables and fruits creates backward linkages with agriculture. Currently exports are unprocessed and great opportunities exist for value addition and processing. |
| Motor Vehicle Assembling & Manufacturing | Joint venture investment opportunities exist such as the manufacture of buses, fuel-efficient vehicles and manufacture of spare parts locally. |
| Chemical Manufacturing | There is potential for investment in the manufacture of chemicals, both Basic and Speciality chemicals, Pharmaceuticals and Health Care Products most of which are currently imported using the scarce foreign currency reserves. |
There is excess capacity in the industry, thereby presenting immense opportunities for investors to establish new and resuscitating existing operations.
The Government is eager to dispose of part of its shareholding which it holds through Industrial Development Corporation of Zimbabwe (IDCZ). Some of the specific investments that the Government has prioritised for partnerships are as follows;
Table 8: Specific Manufacturing Projects Ready for Investments
Source:Ministry of Industry, Commerce and Enterprise Development
Agriculture Sector
Agriculture is the mainstay of the economy and it provides vertical and horizontal linkages to other economic sectors. It is also a source of the much needed agro-based raw materials.This sector is strongly linked with other major sectors of the economy, as it provides the much needed agro-based raw materials.
Foreign investors are free to invest in the sector through contract farming arrangements. Opportunities include provision of financial and technical services, greenhouse production of vegetables and flowers, fruits production, livestock production, dairy farming, tobacco farming, soya beans production and many others.
Table 9: Investment Opportunities in the Agriculture Sector
| Sub-Sector | Description |
| Tobacco | Is among the country’s major foreign currency earners, accounting for about 15% of the total exports earnings. Given the high quality that the country is renowned for tobacco processing presents another potential investment area. |
| Cotton | Opportunities for value addition and beneficiation in this sector exist. This is in view of the fact that the country exports 70% of its cotton output as cotton lint, which can be further processed before being exported. |
| Timber | Extraction and processing also presents investment opportunities for furniture manufacturing. |
| Sugar milling | There is potential in the by-products of sugar milling e.g. electricity generation, ethanol for blending petrol and molasses for stock feeds. |
Source:Ministry of Finance & Economic Planning
Tourism Sector
Zimbabwe has vast tourist attractions ranging from natural to man-made historical sites. These includes Victoria Falls, Lake Kariba, The Great Zimbabwe National Monument, Scenic Beauty Eastern Highlands, Matopo Hills and Wildlife. Opportunities for investment in this sector exist in the following areas:
- Hotel and Catering Industry
- Safari and tour operations
- Gaming
- Construction of international convention centres
- Production of animal documentaries
Infrastructure Development
The provision for good infrastructure is a pre-requisite for achieving economic growth and development and also for enabling other sectors of the economy to function smoothly.
Investment potential exists in the expansion and modernisation of existing infrastructure as well as the construction of new infrastructure such as modern highways and associated tollgates linking key cities, power generation, dam construction, water reticulation, budget hotel chains in the tourism industry etc.
Opportunities in infrastructure development exists in the public sector. Some of the projects include;
Table 10: National Power Generation Projects Ready for Investors
| PROJECT TITLE | PROJECT DESCRIPTION |
| ENERGY | |
| Gokwe North Thermal Power Station (Sengwa) | Construction of a 1400 MW Thermal power station at the Sengwa coal field.Gokwe North Transmission and Distribution Network |
| Gwayi Thermal Power Station | Development of an integrated 2.4 million tonne/year coal mine and 600MW thermal power station in Gwayi. |
| Western Area Power Plant | Construction of a 1200MW Thermal Power Station including Transmission works. |
| Lupane Coal Bed Methane | Construction of 2 Gas Turbine units of 150 MW each |
| Mini Hydro Power Stations | Construction of Gairezi (30MW) mini hydro power station. |
| Construction of Mutirikwi (5MW) mini hydro power station. | |
| Construction of Manyuchi (1.4MW) mini hydro power station. | |
| Construction of Osborne (5MW) mini hydro power station. | |
| Construction of Duru (2.3MW) mini hydro power station. | |
| Small Thermal Power Stations | Upgrading of Harare, Bulawayo and Munyati thermal power station-replacement of industrial coal fed boilers with those that use other types of coal. |
| Transmission & Distribution Networks | Rehabilitation and upgrading of transmission &distribution networks. |
| Solar Energy | Construction of a 100MW solar plant in Gwanda |
Source: Ministry of Finance and Economic Planning
Dam Construction
Foreign investors are welcome to enter into Public Private Partnerships (PPPs) such as Build Operate & Transfer (BOT) and Build Own Operate & Transfer (BOOT) in the construction of the following dams;
Table 11: Investment Opportunities in Dam Construction
| Province | Project (Dams) | |
| 1. | Mashonaland Central | · Semwa, Bindura, Nyatana, Mazowe-Nyagui and Dande |
| 2. | Mashonaland East | · Chipara, Chivhu, Muda, Kunzvi and Musami |
| 3. | Matabeleland South | · Tuli-Manyange |
| 4. | Midlands | · Connemara, Shavi, Lubongo and Kudu |
| 5. | Manicaland | · Chitowe, Conde and Aberfoley |
| 6. | Masvingo | · Runde-Tende |
| 7. | Matabeleland North | · Ziminya |
Source: Ministry of Finance and Economic Planning
