ZIMBABWE’S projected capital inflows from new investment licences approved during the past year dramatically rose to US$2.3 billion from nearly US$558 million registered in 2021, driven by renewed interest in lithium mining and manufacturing sectors, statistics obtained from the country’s investment promotion agency have shown.
The southern African nation is endowed with over 40 base minerals and global demand in lithium for the manufacturing of eco-friendly alternative energy sources has resulted in a rush for the strategic mineral.
According to the Zimbabwe Investment and Development Agency (Zida) annual report, the nearly four-fold increase was also attributable to the easing of Covid-19 restrictions.
The respiratory ailment, which was declared a pandemic by the World Health Organisation, had slowed down economic growth across the globe.
New investment licences, Zida notes, refer to general investment licences issued to private investors seeking to make investments in their chosen sector and this will be a first-time application to the agency.
These projects may be 100% foreign-owned or in partnership with local private investors and will not be seeking incentives as provided under the Special Economic Zones scheme.
“As Zimbabwe is endowed with various mineral resources including gold, platinum, chrome, coal, lithium among others, there has been noted interest by investors to invest in the sector as they seek to exploit the abundant resources,” reads the annual report.
“Worth noting is the recent discovery of lithium resulting in the lithium rush. Of the approved projects in the mining sector, 31 were into lithium mining and 99 in other minerals.
“The high number of renewals in 2022 as compared to 2021 can be attributed to the uplifting of Covid restrictions which enabled investors to submit more applications for consideration as well as continued improvement in service delivery by the Agency resulting in more applications being considered. In addition, the Agency also went on a deliberate drive in 2022 to follow up with investors with expired licences as part of its monitoring and evaluation efforts.”
Zida, the report further shows, has a database of 5 952 licenced investors since 1993 to March 2023.
Of these, 579 were issued by Zida, following its formation in 2020 to March 2023, with the rest carrying licences issued by Zida’s predecessor.
For 2021 and 2022 renewals, the agency mainly followed up with investors with post-2018 licences as these have clear renewal requirements.
The process of renewal requires that the agency carry out a monitoring and evaluation visit to the project to establish project implementation and verify amounts invested and jobs created among other measures.
Although every province received investment during the period under review, mineral-rich Midlands and Harare provinces topped the list as the country’s most preferred investment destinations.
“The high number of new investment licences in Harare Province can be attributed to the fact that investors in non-mining operations generally choose to locate in the province due to the availability of better infrastructure and utilities services and other factors of production such as labour, growth potential through linkages with suppliers of other related goods and services,” the report reads.