Role of ZIDA in promoting SMEs and domestic investments in Zimbabwe.


 

The introduction of the Zimbabwe Investment and Development Agency (ZIDA) brought joy and hope to both domestic and foreign investors who had endured the tiresome and bureaucratic processes experienced in the past. With the promulgation of the ZIDA Act, it was a signal from the government that the days of the honeymoon were over to unnecessary bottlenecks, which resulted in the loss of potential investments in the country. The ZIDA comes when Zimbabwe is recovering from an economic meltdown which has resulted in capital flight, downsizing and closure of formal business. The same epoch also resulted in the mushrooming of small and medium enterprises (SMEs), which took advantage of the gaps and created employment for laid-off workers. There have been calls for policies and regulations to support the growth of the SME sector, and research has shown that they contribute to over 50% of the country’s GDP. What is lacking in Zimbabwe has been having the right policies that assist in the SMEs' development and sustenance, resulting in their failure to be fully integrated into the mainstream economy.

ZIDA is an investment agency responsible for promoting and facilitating local and foreign investment in the country. It emerged as an integration of three investment authorities, previously housed in different Government Ministries and Departments. The promulgation of the ZIDA Act, which repealed the Zimbabwe Investment Authority, the Zimbabwe Special Economic Zones Authority and the Joint Ventures Act, provides a clear, comprehensive and binding legal and regulatory framework for conducting investment activities by both domestic and foreign investors in the country.

ZIDA has made notable strides on the international front, resulting in the trickling in of investors in Zimbabwe. The question that has remained is, what is being done by ZIDA to ensure increased participation of SMEs in the mainstream economy? The honours are with ZIDA as the development agent to ensure that the local investors are given equal treatment with foreign investors to ensure that they contribute to the country`s development. In line with the country`s Vision 2030 of becoming an upper-middle economy, there is a need for programs and policies that quickly turn the fortunes of SMEs in Zimbabwe and create room for them in the economy. Without the full participation of the people of Zimbabwe, it isn’t easy to achieve Sustainable Development Goals (SDGs) and our vision 2030, which all are synchronisation with Africa Agenda 2063, which aims at facilitating and empowering people to be involved in shaping their future.

The ball is in ZIDA`s court to deliver to the people of Zimbabwe as much as it can to appease foreign investors and promote foreign direct investments (FDIs). The benefits expected from attracting and hosting FDI hinge on several implicit assumptions. The first is that FDI has the potential to contribute to growth through complementing domestic investment as well as the transfer of skills, management expertise and technology. Most people in Zimbabwe, including women and youth, are entrapped in the SME sector, which has remained at the periphery of the mainline economy. SMEs are the backbone of the Zimbabwe economy in all the priority sectors, including agriculture, mining and manufacturing. Attention should also be directed to the SMEs, and incentives and programs that promote their nurturing and growth should be the priority of ZIDA as they embark on reconfiguring the Zimbabwe investment climate. The Zimbabwe we desire is to facilitate linkages between multinational corporations and SMEs to benefit the general populace.

 To assist the SMEs, ZIDA has to consider the following

1.     Create programs and policies targeting domestic investors

 .This will be done by creating laws and regulations that make it easier for domestic investors to invest in the country by addressing any challenges faced through policy interventions.

2.     Embark on targeted investments marketing

The programs should raise awareness among domestic investors on the assistance they get from ZIDA about investments.

3.     Decentralization of ZIDA offices

Access to information and communication is central to the success of the domestication of investments. The ZIDA offices have to be decentralised to the district level to promote investments in rural areas and decongest the highly populated towns. ZIDA must consider setting up information hubs around the country that promote domestic investments. These centres will help in the generation of knowledge feeding into the national investment policy and also in the dissemination of investment programs nationwide

4.     Promote and facilitate investments by cooperatives

There is a need to recognise cooperatives, which have played a pivotal role in rural and urban Zimbabwe as they have been a source of credit lines for SME start-ups.

 

Dr Levious Chiukira holds a PhD in Political Science from the University of Johannesburg Republic, South Africa. He is the founder and Managing Director of Gleam Consultancy, an international trade and customs research and consultancy firm.

contacts: lchiukira@gmail.com 

  

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