Direct Foreign Investment key to economic development

Direct Foreign Investment key to economic development
Published: 06 December 2017 (492 Views)
In its efforts to revitalize the economy, Government should consider prioritizing Foreign Direct Investment as the basis of restoring the ailing economy in the best possible shortest period of time.

Foreign Direct Investment (FDI) can be viewed as the growth rate in capital inflows that add over time to fixed capital stock of the home country. This capital formation is expected to boost production and output of the wider economy of a nation.

FDI has the potential to deal with the economic obstacles such as shortages in financial resources, technology and skills. In most developing countries, FDI has been the center of attention in any country that is reviving its economy.

Government's priority sectors for foreign investment include manufacturing, mining and infrastructure development.

There are a number of potential profitable opportunities in Zimbabwe's manufacturing sector for investors.  To start with, there is need to retool and rehabilitate plants and equipment or even installing new machineries to improve production. The industrial sector is involved in the value addition of primary products to produce capital goods.

It is a Government policy that foreign investors wishing to participate in the agricultural and transport sectors may only do so through joint venture arrangements with local partners.

Speaking during the swearing in ceremony of new Cabinet Ministers, President Emmerson Mnangagwa emphasised that one of the key things to consider when recovering the economy will include attracting foreign direct investment to address high levels of unemployment, while transforming the economy towards the tertiary. The President also stressed that many skilled Zimbabweans who have left the country for various reasons must now come into the broad economic new chapter designed for the country's recovery and take-off.

It is a fact that Zimbabwe is one of the best destinations for investment. Firstly, the country has vast natural resources that it can rely on to revitalize its economy. Its topography, soils and climate are conducive to producing a very wide range of agricultural commodities. Similarly, a large variety of commercially exploitable mineral deposits exist in the country.

Both foreign and local investors willing to promote investment in Zimbabwe can also do business in that sector to stimulate production.

Secondly, Zimbabwe's geographical location is pleasant in terms of trade. It is well positioned to serve regional markets for countries that are members of the Southern African Development Community (SADC).

Thus, the country is centrally and strategically located in the Southern African Region. It is also a regional entry and forms part of the North -South Corridor linking South Africa with countries to the north of Zimbabwe such as Zambia, Democratic Republic of Congo and Malawi.

In order to repair bridges with the international community, Government must modify some of the investment policies to make them more investor friendly.

In 2014, Minister of Finance and Economic Planning, Patrick Chinamasa once said that Zimbabwe was open to foreign direct investment from all countries and that business partnership should be without preconditions. Relaxing some of the investment policies is a better way of promoting easy of doing business and can entice more investors.

FDI must also assist in stimulating economic growth of any nation by attracting other investments through the transfer of technology, knowledge and skills to domestic companies.

Most local companies had been lying idle without any production taking place. Now that there is need for an economic transformation, industrialization is necessary and it has to be done using modern technologies.

In addition, FDI has a potential to spur competition, innovation and improvements to a country's export performance, a situation that is equally desirable for a healthy economic growth.

Lastly, Government through the Ministry of Industry and Commerce should be encouraged to heed President Mnangagwa's call of luring foreign investors as a top factor in restoring the economy.


- Chido Chikuni

 0

You May Like These Videos

Comments

There are no comments.

Latest stories

'Zimbabwe polls were meant to start new era'

by Staff reporter | 18 August 2018 | 53 Views

Police 'cooked up documents used to drag Biti from Zambia

by Staff reporter | 18 August 2018 | 48 Views

'Punish Zimbabwe's rogue soldiers'

by Staff reporter | 18 August 2018 | 44 Views

Tshinga Dube won't let go

by Staff reporter | 18 August 2018 | 58 Views

Electoral outcome predetermined

by Maxwell Sibanda | 18 August 2018 | 32 Views

General Valerio Sibanda issued statement under duress, says Mutsekwa

by Staff reporter | 18 August 2018 | 46 Views

Grace Mugabe enjoying life

by Staff reporter | 18 August 2018 | 41 Views

Mnangagwa splashes over $1 million on new limo

by Staff reporter | 18 August 2018 | 37 Views

Chivayo, Kadungure in trouble

by Staff reporter | 18 August 2018 | 37 Views

'Biti acted illegally'

by Staff reporter | 18 August 2018 | 61 Views

'Poop at my doorstep'

by Staff reporter | 18 August 2018 | 46 Views

Church leader wanted sex

by Staff reporter | 18 August 2018 | 54 Views

Mliswa under attack for visiting Johane Masowe shrine

by Simbarashe Sithole | 18 August 2018 | 71 Views

Kofi Annan dies

by Staff reporter | 18 August 2018 | 55 Views

Exposed Chief's wife goes berserk threatening all and sundry!

by Concerned Murowa Ward Community | 18 August 2018 | 110 Views

'Senzeni na' guitarist dies

by Stephen Jakes | 18 August 2018 | 82 Views

Chiwenga's trip to Russia suspicious

by Stephen Jakes | 18 August 2018 | 146 Views

Nkayi youths train on active citizenship

by Stephen Jakes | 18 August 2018 | 63 Views

Inside Chamisa's Campaign

by Sam Wezhira | 18 August 2018 | 115 Views

Nkomo pledges to donate to Gwampa ECD

by Stephen Jakes | 18 August 2018 | 53 Views

Chief Justice gives Chamisa deadline

by Staff Reporter | 18 August 2018 | 89 Views

Grace Mugabe 'fake' degree gets UZ vice-chancellor suspended

by Staff Reporter | 18 August 2018 | 66 Views

Zimbabwe police warns against illegal gatherings

by Staff Reporter | 18 August 2018 | 52 Views

Chamisa is not a factor in parliament, which is good

by Igomombe | 18 August 2018 | 76 Views

'Con-Court must be free to decide,' says Chiwenga

by Staff reporter | 18 August 2018 | 58 Views

Chamisa in dilemma

by Staff reporter | 18 August 2018 | 96 Views

Prophet blew cover on $1m gold theft

by Staff reporter | 18 August 2018 | 55 Views

'Proving poll rigging allegations an uphill task'

by Staff reporter | 18 August 2018 | 59 Views

Man in 'fiery revenge'

by Staff reporter | 18 August 2018 | 58 Views

Trapped artisanal miner dies after five days in mine

by Staff reporter | 18 August 2018 | 42 Views

WATCH: Donel Mangena back in Bulawayo

by Staff reporter | 18 August 2018 | 43 Views

High court reverses AFM church evictions

by Staff reporter | 18 August 2018 | 54 Views

Zimbabwean breaks SA wine auction record

by Staff reporter | 18 August 2018 | 48 Views

'No valid application before the court'

by Priscilla Makanyara Chigumba | 18 August 2018 | 70 Views

Challenges for Chamisa's SA lawyers

by Staff reporter | 18 August 2018 | 52 Views