HARARE – Zimbabwe experienced remarkable growth in foreign direct investment (FDI) in 2023, setting itself apart from most regions in Africa that saw declines.
According to the 2024 World Investment Report by the United Nations Conference on Trade and Development (UNCTAD), Zimbabwe’s FDI surged by 49%, while the Southern African region as a whole recorded a 22% increase.
The Southern African region was the only part of the continent to see growth in FDI. In contrast, Central Africa experienced a 17% decline, and North Africa saw a 12% drop. Overall, FDI in Africa fell by 3%.
Globally, FDI decreased by 2% to $1.3 trillion in 2023, largely due to trade and geopolitical tensions, particularly the conflict between Russia and Ukraine, which impacted the slowing global economy. The World Investment Report 2024 noted that the headline figure for global FDI drops to over -10% when excluding a few European conduit economies that saw large fluctuations in investment flows.
FDI flows to developing countries fell by 7% to $867 billion, with significant regional variations. Despite the global downturn, Zimbabwe attracted $588 million in FDI, the highest in five years, even as the country remains under economic sanctions that pose challenges for business investments.
Zimbabwe’s FDI in 2023 surpassed that of neighboring Zambia ($108 million), Malawi ($208 million), and Botswana ($198 million). However, Mozambique and South Africa received higher total FDI, with $2.5 billion and $5.2 billion, respectively.
Investor interest in Zimbabwe has been growing in recent years. The UNCTAD report shows that the country received $194 million in FDI in 2020, $250 million in 2021, and $395 million in 2022 before the 49% jump to $588 million in 2023.
The Zimbabwe Investment and Development Agency (ZIDA) reported promising figures, with a total projected investment value of $9.6 billion in 2023 from 615 licenses issued. In its 2023 annual report, ZIDA noted an actual investment value of $1.2 billion from 415 license renewals. The majority of these investments came from China ($3.9 billion) and South Africa ($1.7 billion).
Commenting on the growth trajectory, ZIDA Chairman Busisa Moyo highlighted the country’s positive direction in both local and foreign direct investment. He emphasized that Zimbabwe’s 49% FDI growth rate significantly outpaces the Sub-Saharan Africa (SSA) average of 22%.
Moyo pointed out that the UNCTAD figures reflect only monetary FDI, excluding machinery, plant and equipment, and raw material inputs. “ZIDA has been working actively to streamline processes to make entry and establishment of investment easier and seamless since inception in 2020 after succeeding the Zimbabwe Investment Authority (ZIA) and Zimbabwe Special Economic Zones Authority (ZIMSEZA). Mining, manufacturing, and horticulture remain ‘hot’ sectors for investment,” Moyo said.
Financial economist Malone Gwadu noted that the increase in FDI reflects Zimbabwe’s improving competitiveness as a global investment destination. The country’s appeal is bolstered by President Mnangagwa’s mantras, “Zimbabwe is Open for Business” and “Zimbabwe is a friend to all and enemy to none.”
Source: Business Weekly
