GOVERNMENT has to be consistent in its polices to attract Foreign Direct Investments (FDIs) in the mining sector, permanent secretary for Economic Planning and Investment Promotion Desire Sibanda has said.
BY MUSA DUBE
Speaking in Bulawayo recently, Sibanda said FDIs remained a key ingredient for rapid economic growth but there was competition globally for investment inflows.
“Competition for FDI is fierce on the continent and is expected to intensify. It is therefore critical to note that the policies and approach to attract FDI has to be smart. There is need to demonstrate policy consistency and stability,” said Sibanda.
Sibanda said the country’s mining sector was in dire need of investments, especially its infrastructure.
“What has been undermining Zimbabwe’s rich mineral wealth have been challenges such as inadequate infrastructure development, perceptions of corruption to unfair licensing practices, political risks and the high capital costs associated with establishing or expanding a mining venture,” he said.
He said it was regrettable that Zimbabwe remained in the lower levels of doing business rankings, at 172 out of 185 countries, in 2013.
“To attract more FDIs, Zimbabwe needs to improve the doing business indicator,” he said.
Sibanda said the turbulent political environment in the last decade and poor perception of the country from potential investors had negatively impacted on the country’s economic growth.
He said government recently floated a US$32 million tender for an aeromagnetic mineral exploration exercise in the Eastern Highlands to determine the quantity of minerals.
“The exploration will help to comprehensively determine the extent of the country’s mineral wealth and have adequate information to lure investors,” said Sibanda. “Plans are in place to set up an exploration company to identify mineral deposits throughout the country.”
He said the mining sector continued to grow and this was attributed to positive performance in diamonds, chrome, nickel, platinum and palladium.
In his midterm fiscal policy review, Finance minister Tendai Biti reviewed downwards the growth of the mining sector this year to 5,3% from the 17,1% earlier projected.
Biti said the review was necessitated by falling international mineral prices against rising mineral production costs and challenges related to the absence of long-term financing.