Government crafting new investment laws

Business
BY NDAMU SANDU GOVERNMENT is working on investment promotion and protection legislation as part of reforms to lure foreign investors to help rebuild the economy.

The reforms, which include the conclusion as well as negotiating for new Bilateral Investment Promotion and Protection Agreements (Bippas) are designed to provide a favourable environment for investors and get a bigger chunk in terms of the global Foreign Direct Investment (FDI) inflows.

 

This follows revelations that FDI into the country was stagnant last year on the 2009 figure of US$105 million. Government has identified FDI as one of the engines of economic growth under the Medium Term Plan (MTP).

Tapiwa Mashakada, the Economic Planning and Investment Promotion minister on Tuesday said the reform agenda was crucial for government to “improve the ease of doing business in the country in order to enhance competitiveness.”

The bill has to be in place by December and Mashakada said as long as Parliament was still sitting, the deadline would be met because it was not controversial. The Investment Promotion and Protection Bill is currently at the drafting stage in the Attorney General’s Office after it was approved by cabinet.

The Bill says all investments should be handled by Zimbabwe Investment Centre (ZIA). Under the current dispensation, investment proposals are processed by sector regulators.

Mashakada said the Bill would reform the ZIA board and rename it the Board of Investments so that it dedicates its efforts to issues of investment promotion. The economy is expected to achieve growth for the third successive year in 2011 after a decade of recession. Investment has been identified as an engine to drive the growth targets.

According to the Medium Term Plan unveiled two weeks ago, government wants investment to contribute 20% of the Gross Domestic Product (GDP) in 2015 from the current 4%.

Mashakada said government would set up a National Investment Council by December this year. He said conclusions of bilateral investment agreements would be expedited while new ones would be negotiated.

But he said government was not singing from the same hymn-book with regards to agreements that cover the land issue.

“Outside the land we agreed that we need to observe and protect bilateral investments from other countries. We haven’t had a case whereby a private company had been seized or assets expropriated,” he said.

Mashakada said government had provided the environment for investment but was weighed down by the sovereign risk of the country due to political uncertainties. “In terms of doing business, we have tried our best and what has remained is the sovereign risk of the country.

“The issue of GPA (Global Political Agreement), quarrels, political bickering, it affects the sovereign risk of the country and that is affecting investment.”