Are the new investment policies under the new dispensation enough to lure the mystical investor?

Investor optimism following the 2017 fall of former President Robert Mugabe has dissipated as the new dispensation has been slow to follow through on its promises to reform and improve the business environment. The economy has suffered hyperinflation and contracted sharply in 2019 worsened by the climatic shocks that crippled agriculture and electricity generation. Unsustainable monetary policy has led to a protracted currency crisis which continues to strain the economy. The Zimbabwean dollar introduced in February 2019 has already lost approximately 98 percent of its value on the black market. Failure to implement finance ministry efforts to rein in the budget deficit undermined public confidence in the financial sector. The government adopted a stabilization and reform agenda supported by IMF Staff-Monitored Program but by February 2020 the IMF reported the SMP had gone off track due to government failures to fully implement reforms. Zimbabwe remains in arrears to the World Bank and other multilateral and bilateral institutions restraining many forms of multilateral assistance.

By Netsai Muchemwa

Although the government has repeatedly affirmed its commitment to improve transparency, streamline business regulations and address corruption, the last two years have brought limited progress. Zimbabwe has attracted less than USD 600 million a year on average in foreign direct investment over the past decade. Zimbabwe’s incentives to attract foreign direct investment include tax breaks for new investment by foreign and domestic companies and making capital expenditures on new factories, machinery, and improvements fully tax-deductible. The government waives important taxes and surtaxes on capital equipment. The government has made slow progress at improving the business environment by reducing regulatory costs but policy inconsistency, weak institutions and lack of fiscal discipline have continued to frustrate business and investment.

Corruption remains rife and there is little protection of property rights, particularly with respect to agricultural land. In 2016, the government introduced a surrogate currency called the bond note officially pegged at USD only for domestic transactions. Money printing caused the currency to lose value and in February 2019 the Reserve Bank of Zimbabwe de-linked the local currency from the USD and has not yet implemented a market-clearing exchange rate regime. As a result, it remains difficult to access dollars at the official exchange rate and this has given much opportunity to the black market which has a higher rate. The government banned the use of foreign currencies for domestic transactions in 2019 further complicating the business environment but introduced some exceptions for investors and further relaxed the rules in March 2020 amidst the Covid-19 pandemic. Inflation has jumped from 10.6% in 2018 to 676% in March 2020 reflecting monetary expansion, currency depreciation, and removal of subsidies on fuel and electricity. The sectors that attract the most investor interest are tobacco, mining, energy, and tourism. Zimbabwe has a well-earned reputation for the high education levels of its workers. In order to attract investment and encourage competitiveness, the government has encouraged public-private partnerships and emphasized the need to improve the investment climate by lowering the cost of doing business and restoring the rule of law and sanctity of contracts.

Zimbabwe Indigenization and Economic Empowerment Law limits the number of shares owned by foreigners in the diamonds and platinum sectors to 49% with specific indigenous organizations owning the remaining 51%. The government has signaled its intends to remove these restrictions. The Zimbabwe Investment Authority (ZIA) promotes and facilitates both foreign direct investment and local investment. ZIA also facilitates and processes investment applications for approval. While the government has committed to prioritizing investor retention, there are still no mechanisms or formal structures to maintain an ongoing dialogue with the investors. While there is a right for foreign and domestic private entities to establish and own business enterprises and engage in all forms of remunerative activities, foreign ownership of businesses remains 49/51%.

Foreign investment is free to invest in the vast majority of non-resource sectors without any restrictions as the government aims to bring new technologies, generate employment, and value-added manufacturing.  The government reserves certain sectors for Zimbabweans such as car hire, taxis, employment agencies, grain milling, passenger buses, bakeries, advertising, estate agencies, and dairy processing. According to the country, U.S. investors are not especially disadvantaged or singled out by any of the ownership or control mechanisms relative to other foreign investors. That being said, it is quite apparent that the new investment policies under the new dispensation are not enough to lure the mystical investor.

Written by Netsai Muchemwa, a Student at the University of Zimbabwe. For comments contact


Since the coming in of the second republic in 2017, the mantra Zimbabwe is open for business has become part of the country’s foreign policy. Due to the volatile currency, lack of clear institutional governance frameworks, slow pace in domesticating international trade or investment treaties, the role of the government in the economy and national politics, there has been no meaningful investment in Zimbabwe. This article highlights the major challenges facing Zimbabwe is open for business mantra to underscore in its objectives and achievements.

By Ray Masuku

Firstly, the relationship between international trade law and domestic law is guided by two theories namely, the monist and dualist theories. The theories explain how international law is domesticated into national law. In this section, the theory of dualism in international trade law states that international agreements should be incorporated and domesticated into domestic or municipal law through legislative procedures. Domestication of international trade agreements in Zimbabwe is guided by sections 34, 326, and 327 of the 2013 constitution of Zimbabwe (as amended). The legislature as an arm of the government has an important role to play in the domestication of international treaties to promote economic prosperity in accordance with section 12 of the Constitution of Zimbabwe on the principles of foreign policy. Zimbabwe has not yet incorporated the World Trade Organization agreement into domestic law as well as a number of treaties. Zimbabwe is not using the Economic Partnership Agreement between the Eastern and Southern African countries (EPA-ESA). The Economic Partnership Agreement can go a long way in addressing Zimbabwe’s Sanitary and Phytosanitary issues through article 35 of the EPA. Zimbabwe has been slow in joining some international initiatives to foster international trade and investment as Zimbabwe has not joined the Extractive Industry Transparency Initiative. This is against the principles of good governance especially those related to transparency. Zimbabwe has to improve its domestication process to encourage investments to foster economic development.

Isolation from the international community has been Zimbabwe’s policy for the past two decades. The second republic has proclaimed that Zimbabwe is a friend to all and an enemy to none. One of the major issues of concern is the number of Bilateral Investment Treaties and Bilateral Investment Promotion and Protection Agreements which are in force in a scenario where the government says Zimbabwe is a friend to all and an enemy to none. Zimbabwe has 10 BITs that are in force and those BITs came into force in the 1990s. The global economy is changing as a number of events have taken place and new economic ideas are being implemented. Zimbabwe, therefore, needs to up its game by renegotiating and negotiating new BITs to be in touch with the current global economic events for economic prosperity through investment.

As we live in a global village where technology is advancing, there is no clear online institutional governance framework in Zimbabwe. The institutional governance framework must be accessible under government or institutions’ websites. It is unfortunate that Zimbabwe is Open for business mantra faces challenges when it comes to the accessibility of online information. Online websites do not have enough or detailed information for investors to access all investment-related information. Some of the government’s websites do not open hence, investors cannot access much-needed information from these sites. The governance frameworks should speak to section 3(2) of the constitution which speaks to justice, transparency, and responsiveness as factors of good governance. The environment for investment has become opaque as Zimbabwe is ranked low in the ease of doing business due to more time spent on office-to-office documents. In this 21st century where technology is advancing, Zimbabwe has to retool its investment environment by revisiting government websites for accessibility to give investors information from wherever they are.

The global economy through liberalism has pushed developing or less developed countries to the economics of survival as there has been a rise in volatile currency in developing and less developed countries. Volatile currency is another factor that is affecting Zimbabwe is open for business mantra. It is as a result of policy inconsistency in Zimbabwe as the government through the Ministry of Finance and the Reserve Bank of Zimbabwe have been changing policies in a short period of time. The shift from the multi-currency regime to the Zimbabwean dollar (ZWD) has affected a number of investors which has also made investors shun Zimbabwe because of uncertainty in projection of investment using the Zimbabwean dollar. The role of the government in controlling the exchange rate affects investors as their production is now determined by black market dealings. According to the World Trade report (2020), there is no transparency in the auction system which makes it hard for investors to choose Zimbabwe as an investment destination where foreign currency is controlled by the government.

According to Keynesian economics, the government’s role should be of providing a wide range of public goods while the institutionalists highlight that the focus should be on the real world rather than the abstract models of a free market. In Zimbabwe, policymakers deal with abstract and perception rather than reality. There is a need for Zimbabwe to implement the gold standard or adopt the 21st-century digital currency rather than using fiat currency which has failed the global economy since the abandonment of the gold standard. Poor salaries in the security services have led to the rise in armed robberies who are targeting business people. Recently, the minister of Home Affairs told the Zimbabwe Republic Police senior officials that the rise in cases of armed robberies was scaring away foreign investors in Zimbabwe. The role of the government, in this case, must be of providing basic goods and stable salaries to all the working people to reduce the levels of armed robberies. Adam Smith in his book “Wealth of Nations”, states that the government must create an enabling environment to make sure that the market strives. Therefore, the government of Zimbabwe must retreat and create a conducive environment for investment.

The link between politics and the economics of the day cannot be ignored in international relations. The politics of Zimbabwe is affecting the economy as investors remain insecure about political events in Zimbabwe. Political persecutions and political statements by government officials attacking potential countries who have the capabilities to invest in Zimbabwe are of great concern. Constructivists state that values, identity, and history play a major role in international relations. It is in this case that Zimbabwe needs the United Kingdom to revitalize industries as Zimbabwe’s closed industrial tools are of the United Kingdom model. Political unrests noticed in 2018 and 2019 is a clear example of the challenge faced by investors as political demonstrations affected investors through the looting of goods in their shops.  The demonstrations were due to the effects of liberal economics which affect ordinary people. The sanctions debate is a result of the national politics and international politics in Zimbabwe as we are living in the world of dependency and interdependency for economic growth.

From the Havana Charter to the World Trade Organization, property-related aspects in investments remain a major concern. Property rights in investments must be protected by domestic laws. According to Hume, the government has the obligation or duty to protect property. Farm evictions have continued even during the second republic’s tenure as farmers are being evicted by powerful political elites. In a globalized international system, evicted farmers’ news has made headlines to the outside world sending a clear message to the mythic investors that property rights are not guaranteed in Zimbabwe. The comments from members of the WTO for Zimbabwe’s trade policy report review indicated the dissatisfaction by western countries on property rights. This area needs attention by allowing investors to enjoy their property rights for economic prosperity. Zimbabwe must be clear on property rights and follow the rule of law as stated in the constitution of Zimbabwe.

However, there are some successes of the policy that may not be ignored. The private and public partnership in doing some investments as well as infrastructure development is complimented. Local investors and those in the diaspora have heard the call of the President “Nyika inovakwa nevene vayo”. A number of developmental projects and investments are taking place throughout the country. These include the building of schools, electrification, the building of clinics, and engaging in the business sector by also contributing to the economy through remittances. Moreover, the programs carried by the government as efforts to address the challenges can be commendable. The Emergency Road Rehabilitation Programme is one of the programs that can benefit Zimbabwe in terms of investment. Road rehabilitation and upgrades can help Zimbabwe to lay a strong foundation for economic growth given that road and air transport plays a major role in connecting trading countries. In line with the regional economic integration through the Africa Continental Free Trade Area, road rehabilitations can be key to unlocking trade routes and linking with other states in the region.

Tax holidays are important in investments for developing countries, as Zimbabwe has implemented it. Tax holidays are governed by tax law and are fiscal measures that are used to attract local and foreign investors. The government of Zimbabwe has given tax holidays to investors in different spheres of the economy especially in the mining sector. Great Dyke Investment was given a five-year tax break as Zimbabwe Investment Development Agency has a role to play in crafting the best tax holidays to attract investors as mandated by the attendant Act. The issue of tax holidays needs to be implemented in a transparent manner so that the citizens know-how and who is granted tax holidays as well as how do they benefit them. Zimbabwe has been moving in the right direction in granting tax holidays, however, the government has to be transparent and critically evaluate the performance of those who require tax holidays.

In conclusion, As the policy is getting attention, a number of issues still need to be addressed for it to successfully achieve its objectives. Zimbabwe should adopt a digital currency or join the Rand Union for investment and trade to thrive in this liberal international politics. There is a need to adopt current technological advancements and upgrade the government websites for investors to get more information online in order to reduce office to office delays. Zimbabwe should also reform the way it does its politics as the national politics of the day have been influential to the international politics for Zimbabwe leading to investment uncertainty. There is also a need to negotiate new Bilateral Investment Promotion and Protection Agreements (BIPPAS) and Bilateral Investment Treaties (BITs) to be in touch with both the current global economic needs. In addition, Zimbabwe has to join some international initiatives that promote economic growth through trade and investments.  The World Trade Report comments for Zimbabwe should be taken into consideration as it sends a clear picture of Zimbabwe’s business environment. The implementation of the above issues may help Zimbabwe to witness the fruits of Zimbabwe is open for business mantra for Vision 2030 to be a reality.

This paper is an opinion piece written by  By Ray Masuku. A holder of a B.Sc. Hons degree in Political Science and is currently studying MSc. International Trade and Diplomacy at the University of Zimbabwe. He can be contacted via his email

Transport operators extorting commuters

Citizen Journalist 

The festive season in Zimbabwe has always been associated with high traffic movement as most holiday makers seek to reach their various destinations to be in the company of their loved ones for the celebration of Christmas. Notwithstanding the debilitating effects the Covid-19 pandemic has had on the economy and the entire social fabric, this years’ festive mood has not been entirely blighted as witnessed by high numbers of commuters at major pick up and drop off points here in Buhera district, Manicaland Province.

Illegal transport operators are however taking advantage of the shortage of authorized public commuter vehicles in the form of ZUPCO buses as they have doubled fares much to the agony of the impoverished rural folk. For example, a short distance from Masasa to Murambinda is normally charged between US$2 and US$3, but the pirate operators plying the route better known as Mushikashika have raised fares to as much as US$5.

The government has a duty to provide adequate alternative transport especially to protect the vulnerable rural commuters who during this time of the year always find themselves at the mercy of illegal transport operators. Opportunities for private operators should be opened so that they augment the efforts of the government in the quest to provide safe and dependable public transport service.

Women doing wonders to avert poverty

Some of the products from the craftswomen

Citizen Journalist

BUHERA- Women in Buhera South have taken it upon themselves to generate meaningful income through self help projects like weaving and basketry. Just at a time when most people are complaining for lack of employment opportunities, rural women in this part of Manicaland are doing wonders by producing products that can really be competitive even at the export market. Just from palm leaves, grass and raw fiber, the craftswomen are making beautiful products like baskets, flower pots, floor mats and many other assorted home decorative items.

If these skills are imparted to the young generation, many will help themselves escape the jaws of poverty especially during these times when unemployment levels are high. Women and youths will not suffer from any want as they can be capable of generating themselves surplus income to meet all their requirements and even support others.

Parents move to address accommodation crisis at rural school

House built by the parents nearing completion

Citizen Journalist

Parents from Ward 24 of Buhera South, have pooled together their meagre resources to construct an accommodation house at Mukodza Secondary school. The rural parents have taken it upon themselves to address the problem of accommodation at the learning institution with the view that this may add up to the success of their children if the teachers are well taken care of.

Parents and teachers’ convergence for quality education

Leonard Mabasa

Citizen Journalist

Rural teachers at Kandenga Primary and Secondary Schools are meeting with the parents to discuss pertinent issues, critically affecting the inclusive access to education in Buhera district. Community elders always speak frankly on ways of how to improve quality education in the area.

Livestock theft cases rising in Buhera

Citizen Journalist

BUHERA- Stock theft cases are on the increase especially this festive season. Attributed to high unemployment, many desperate young people are unfortunately resorting to stealing in order to get something for the holidays. In Buhera South, thieves are targeting poultry (huku nematoki) especially during heavy downpours when owners will be silently resting in the inner rooms. Avoid buying chickens from mobile sellers, chances are high they may not be bona fide dealers.

Demo at Hon Farai Musikavanhu’s residence.

Demonstrators at Farai Musikavanhu’s residence

Citizen Journalist

Chiredzi residents are accusing their member of parliament Hon Farai Musikavanhu of converting government agriculture inputs to his personal use. A demonstration was held at his house by concerned citizens who wanted to register their disapproval.

More details to follow.

Unfair Distribution of Pfumvudza Inputs in Karoi

Citizen Journalist

The distribution of inputs in Karoi urban, Hurungwe district, Mashonaland West, has exposed a lot of corruption and partisan conduct by those in charge of the presidential agricultural scheme. Many people did not benefit from the scheme as it was highly politicized. Those who mainly benefited were Zanu pf supporters.

Pfumvudza was officially announced to residents by Honerable Mary Mliswa but was already distributed to 7 of the 10 urban wards. Speaking to the residents and officials from Agriculture Extension (AREX) Hon Mliswa implored the AREX officials to perform their job properly without favor. She also recommended Councilors to do likewise. This came at a time when some of Councilors have been arrested on charges of corruption and theft among other violations.

Town Chairman Abel Matsika shocked everyone when he publicly revealed that  there are three Wards that have been left out because the area is a known MDC territory. This did not go down well with people who in return voiced insults to him. The people are being asked to form groups of 40 and each member required to pay US$1 towards transport. Nevertheless, very few people have received the inputs and are wondering what it means despite the fact that they lost their hard earned cash.

Not only that, the inputs are being distributed by Fortune Madamombe a former Councilor. He is been referred to as the shadow councilor. This has annoyed many who now view this move as a purely party program not for all and sundry. The residents rather want the Councilors in office to superintend the job.

Equip the Police to effectively fight crime

PAZ Information Desk

The police force needs to be fully resourced to effectively and efficiently carry out it’s constitutional mandate of preventing crime. As Passengers Association of Zimbabwe, we encourage people not to fight back to robbers but just to give in. It’s better to lose property than to end up losing your life. Insurance covers the injuries and the loss suffered by the passengers. Cross border buses are obliged to write names of all passengers before embarking on their journey in case of any emergencies.