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BY KUDZAI CHIMHANGWA
THE Indian business delegation that visited the country last week expressed interest in investing in Zimbabwe’s key sectors, but urged the government to create a suitable business environment.
First Secretary at the Indian Embassy in Harare, Mukesh Kumar, said that Zimbabwe needs to urgently address the negative perception that still exists about the country in the international community.
“Zimbabwe has to shake-off its poor status tag and really show the rest of the world its true potential as reflected by its resource endowments,” he said.
Kumar said it would be important for Zimbabwe to clearly indicate its foreign investment requirements in order to properly guide Indian business people who intend to make long-term investments in the country.
He also indicated that Zimbabwe has not reacted quickly to protect vulnerable industries such as textiles and leather from destructive external competition as evidenced by the influx of cheaper goods, presumably under the auspices of the “Look East” policy enunciated by government.
“The country needs to address issues of bureaucracy to allow for hassle-free and easy access into the country by investors from Zimbabwe’s major source markets,” he said.
His comments come soon after a recent Zimbabwe-India investment conference held in Harare last week following a visit by a high-level business delegation from the Chamber of India Industry (CII). The delegation included the Minister of Industry, Commerce and Textiles, Anand Sharma.
The Indian delegation comprised 25 large companies involved in the pharmaceutical, energy, manufacturing and textiles, infrastructure development and engineering, as well as energy and water projects among others.
A number of business delegations including German and British firms have entered the country to explore investment opportunities ever since the inception of the multi-currency regime in 2009, but have continued to express reservations about the local business climate.
Government plans to achieve an economic growth rate of 9,4% this year, with foreign exchange reserves of at least three months import cover by 2015, double digit savings and investment ratios of around 20% of GDP by 2015.
The government, under the Medium-Term Plan, also intends to intensify the investment drive to attain at least 25% of Gross Domestic Product by 2015.
The delegation observed that while this growth potential exists, there are challenges hindering the country from taking an economic leap forward in spite of its natural and human resource endowment.
Kumar said the Indian government’s commitment to issuing visas to Zimbabweans expeditiously was not being reciprocated by Zimbabwean authorities.
Last year in September, another business delegation from India, led by Minister of State for Commerce and Industry, Jyotiraditya Scindia, toured the country and held a joint Zimbabwe-India investment conference.
During the conference, the Indian business delegation also expressed interest in venturing into mining, diamond cutting and polishing; supplying of agriculture-related equipment and machinery, as well as social services in the health and education sectors.
Permanent Secretary in the Ministry of Economic Planning and Investment Promotion, Desire Sibanda said Special Economic Zones would soon be introduced, resulting in the setting up of industrial parks and clusters that are favoured by most Asian countries as viable development models.
It was noted during the session that both countries have complementary needs where India requires raw materials to set up its industries while Zimbabwe, needs technical and financial assistance to exploit its natural resources.
Indian ambassador to Zimbabwe Jietendar Kumar Tripathi told Standardbusiness that the Indian government was committed to increasing trade relations with the country.
“We have no problem at all with the indigenisation policy, as we recognise that it is important for the indigenous people to have a stake in their economy,” he said, adding that suitable arrangements in that regard could be made to forge partnerships.
Zim stands to benefit if indian firms invest: robertson
Economist John Robertson said the country stands to benefit greatly, should the Indian investments be forthcoming as skills and technology transfer would pass on to the economy.
“Most Indian companies are very big and successful, but they need to take advice from the problems surrounding the Essar deal, where the investors are having difficulty persuading government to stick to the original terms of the agreement,” he cautioned.
Government has promised to put in place reforms to attract Foreign Direct Investment (FDI) and get a bigger chunk in terms of global FDI inflows.
Last year, it signed Bilateral Investment Promotion and Protection Agreements with India, an assurance to Indian investors that its investments would be safe in Zimbabwe.
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