ZIMBABWE must prioritise regulatory transparency and sustained investor engagement if it hopes to compete as a premier investment destination, the Southern African Research and Documentation Centre (Sardc) has warned.
In an interview with businessdigest on the sidelines of a roundtable discussion on strengthening Zimbabwe-China business cooperation held in Harare recently, Sardc executive director Munetsi Madakufamba said Zimbabwe risked losing foreign investors to more business-friendly countries if it failed to address persistent regulatory shortcomings.
“Creating a business-friendly environment that addresses these factors is essential for fostering sustainable development and mutual benefit,” Madakufamba said.
“So, there are genuine concerns that are raised by Chinese businesses in Zimbabwe in terms of the investment climate and the regulatory framework in the country.
“There are concerns to do with lack of clarity in terms of what are the laws in Zimbabwe as far as the regulation of investment is concerned.”
Chinese investors have cited policy inconsistencies and infrastructure bottlenecks as key impediments to doing business in Zimbabwe.
“Now, some of these concerns are as a result of lack of information. This is why we have decided to bring together the Chinese business community and some of the relevant government agencies in Zimbabwe so that there can be a platform for dialogue to iron out some of these concerns,” he said.
“So, that information is provided to the business community and they also have an opportunity to ask specific questions based on their experiences out there around the country in the various sectors that they are invested in.”
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Madakufamba noted that a conducive investment climate is shaped by a range of factors, including regulatory transparency, efficiency of public institutions, and the quality of both hard infrastructure, such as roads, energy, and water, and soft infrastructure such as licensing procedures and immigration systems.
“The interplay between the investment climate and regulatory framework is crucial, as is the relationship between investment attractiveness and infrastructure quality – that is, both hard infrastructure, such as transport and energy, and soft infrastructure, such as licensing procedures,” he said.
“These challenges highlight the need for structural changes and policy reform to improve the ease of doing business.”
While broader policy reforms are the responsibility of central government and lawmakers, Madakufamba highlighted the critical role of frontline agencies such as the Zimbabwe Investment and Development Agency (Zida), the immigration department, and the police in fostering a stable and investor-friendly environment.
“Openness and consistency in interactions with investors, both new and existing, can significantly alleviate concerns and build trust,” he said.
“This alone would be a significant step forward in attracting and retaining foreign investment.”
Madakufamba highlighted that if the country’s regulatory framework and business regulations were not conducive enough, this would affect investment as many investors would leave for more favourable jurisdictions.
“We are not the only country that can be considered as an investment destination,” he said.
“We are in competition with other countries. So, if our environment is not conducive because of the migratory nature of capital, investment capital can choose to go elsewhere.
“It is as simple as that. Now, capital is timid in the sense that investors are always averse to risks of any kind of nature.”
Chinese Exchange Centre to Zimbabwe chairperson Steve Zhao said the discussion was important as it unpacked some of the issues affecting investment between the two countries.
“The resolution is actually that Zimbabwe needs Chinese investment into the country, and we do need to work with the Zimbabwean government,” he said.
“There is also a need for knowledge transfer from both sides. So, the programme is helpful, and we will do more of these engagements in different sectors.”
Zimbabwe Republic Police commissioner Abigail Moyo emphasised the importance of law enforcement’s role in ensuring that investment was well protected by the country’s laws.
She urged investors to respect the country’s laws.
Evidence Ruziwa, head of public relations and protocol at Zimbabwe's immigration department, urged investors to make use of their online portal.
“We believe that it is going to bring in a lot of efficiencies and transparency,” she said.
“It is also doing away with human interfacing, which we believe is also becoming a problem in our systems because where there is too much human interference, at times our processes do not really go well.
“So, I believe that the coming of the online border management system will go a long way in bringing about the necessary efficiencies in our payment processing.”
According to Zida, Chinese companies invested over US$300 million in Zimbabwe in 2023, with the capital flowing into key sectors such as mining, infrastructure, and manufacturing, bringing notable economic benefits.
