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MAIN ECONOMIC SECTORS Zimbabwe has a sound economy with a strong industrial base, a diversified commercial sector supported by a productive agricultural sector and a well-developed mining sector Manufacturing Zimbabwe's highly diversified industrial base provides the investor with a number of opportunities. Zimbabwe's share of manufacturing in Gross Domestic Product is comparable with the sub-Saharan average. The broadly based manufacturing sector produces in excess of 6 000 products or commodities ranging from food and clothing to fertilizers and chemicals, metal products of all kinds, electrical machinery and equipment and motor vehicle assembly. The manufacturing industry is closely linked to agriculture with in excess of 60% of manufacturing value added either related to agro-industry or to the provision of inputs into the agricultural sector. The manufacturing sector also provides considerable input of consumables to the mining industry as well as processing minerals for export. The Zimbabwe mining industry produces over forty different minerals with recent major investments in platinum as well as the establishment of new processing facilities. Zimbabwe has special access, through quotas, to the markets of the European Union and through SADC to the Southern African region. It also has in place a number of negotiated agreements, which provide for preferential duties on exports to various countries. An investor may obtain specific information on these from either the Zimbabwe Investment Centre or the Ministry of Industry and Commerce. Clothing The clothing sector in Zimbabwe comprises more than 220 registered companies who are members of the Zimbabwe Clothing Council. Textiles The textile industry has gone through a down period and requires investment in new technology that will enable it to compete with imports into the Southern African Region from the Far East. Food Opportunities for investment are available within the various sub-sectors of the food manufacturing industry such as the improvement in primary production within the meat industry through the promotion of commercial livestock production by indigenous farmers. Oil Processing and Milling A large area for joint venture investment lies within the oil processing industry where an influx of small-scale indigenous producers would benefit from new technology and the establishment of regional or international marketing organisations. Sugar Future opportunities exist in the development of smallholder sugar cane growing and this would necessitate the establishment of additional sugar milling facilities to provide for a growing inter-national demand. Timber Some of the opportunities for investment in manufacturing are within the sub-sectors such as the timber industry that comprises timber producer; saw millers, timber processors, material manufacturers and timber traders. Furniture Furniture manufacturing in Zimbabwe is without doubt one of the best-established sub-sectors and certainly one of the most diversified. Footwear and Leather Zimbabwe's footwear and leather industry is well developed with access to the supply of good quality leather through local tanners. Chemicals The chemical industry of Zimbabwe offers a varied range of products including fertilisers, pesticides, paints and varnishes, pharmaceuticals, soaps and cleansing products, perfumes and cosmetics. Pharmaceuticals are well catered for with a wide range of local and international brands being manufactured and marketed locally and within the region. Metals and Minerals Metals such as nickel, chrome, copper and platinum are products of the Zimbabwean mining industry but most of these are exported in a raw state. In recent years processing plants have been developed but there is opportunity for conversion of raw materials into processed or semi processed products for export. The utilization of regional natural resources and development of transport corridors on a Build Operate & Transfer basis will provide opportunities for the investor to participate in such development or trade at more competitive prices. In this instance most metals are traded through the Mineral Marketing Corporation of Zimbabwe but this does not preclude investors working in partnership with this organization. Commerce The commercial sector in Zimbabwe has developed into highly diversified retail and wholesale outlets with parallel banking, insurance and other service industries to international standards. The banking sector developed with the introduction of the most up-to-date automated banking equipment and business generally is now able to take advantage of the most modern technical advances in information technology. Many new retail and wholesale companies were established and, more recently, commerce has seen a steady development of newcomers into the instant food industry with, very recently, the introduction of many new franchises. Mining In Zimbabwe the mining industry earns over 40% of the country's foreign exchange earnings contributes approximately 6% towards Gross Domestic Product and employs in excess of 55 000 people thereby creating a livelihood for a quarter of a million Zimbabweans. Most of the output comes from a few large mining groups comprising internationally known multi-nationals complemented by a growing number of locally owned enterprises being developed by indigenous entrepreneurs. In Zimbabwe the mining industry earns over 40% of the country's foreign exchange earnings contributes approximately 6% towards Gross Domestic Product and employs in excess of 55 000 people thereby creating a livelihood for a quarter of a million Zimbabweans. Most of the output comes from a few large mining groups comprising internationally known multi-nationals complemented by a growing number of locally owned enterprises being developed by indigenous entrepreneurs. In the formal mining sector there are approximately one thousand properties, mainly gold, worked by companies, syndicates and individuals classified as operating mines. The main mineral and mineral related exports produced by the Zimbabwe mining industry are gold, ferrochrome alloys, asbestos, nickel and platinum. Other exports include dimension stone (black granite), graphite, lithium minerals and emeralds. The reason for Zimbabwe's success in attracting the attention of mining investors is that access to prospecting and mining ground may be readily obtained, either by pegging or registration of claims, by purchase or lease of existing properties or by entering into joint ventures with going concerns. Some of the more significant investor incentives within the mining industry are:
Special Mining Leases A Special Mining Lease entitles the holder to specific incentives negotiated individually with the Ministry of Mines. The holder of a special mining lease is entitled to a refund of sales tax and import tax on any building or structure constructed from eligible goods in terms of a contract with government and other goods of a capital nature. Terms and Conditions An investor wishing to apply for a special mining lease must invest in excess of US$100 million in foreign currency in a mine whose output will be mainly for export, be the holder of one or more contiguous registered mining locations and must be either a citizen of Zimbabwe, a body corporate or two or more persons, provided they are citizens of Zimbabwe. Their obligations under the lease shall be joint and several. An investor wishing to invest in the mining sector should, in the first instance, consult with the Chamber of Mines or the office of the Mining Commissioner. Only one mine can be established and developed by the holder of a special mining lease in a specific area. A special mining lease will be issued for a maximum period of twenty-five years after which it can be renewed for a further ten years. Application Procedures An application for a special mining lease must be made to the Mining Commissioner for the mining district concerned. The application must be accompanied by:
On receipt of an application the mining commissioner will reserve the area of the proposed mining lease against prospecting and pegging and will refer the application to the Mining Affairs Board for preliminary assessment. Tourism Zimbabwe is famous as a tourist destination in Africa and can boast a number of internationally renowned tourist attractions and its favourable year round weather conditions. Zimbabwe is famous as a tourist destination in Africa and can boast a number of internationally renowned tourist attractions and its favourable year round weather conditions. The best known and biggest is the Victoria Falls where the Zambezi River plunges into a 106 meter deep gorge which runs for 1.6 kilometres across the path of the river The Victoria Falls town has a number of world famous hotels, with all facilities such as golf courses, game drives and river cruises. The town and surrounding area have been declared a National Park mainly to preserve it from over-commercialisation. To cater for the modern tourist white water rafting and canoeing are available, as well as bungee jumping from the bridge crossing the gorge. The white water rafting world championships, held regularly on the Zambezi River, attract teams from many countries. On the northern border with Zambia one of the greatest engineering feats of the century, Lake Kariba, forms a magnificent centerpiece. The Matusadona National Park attracts nature and bird lovers and fishermen wishing to match their skills against the most challenging of fish - the Tiger Approximately 8% of Zimbabwe's total land mass has been set aside as national or recreational parks. These include the most famous - Hwange National Park, one of the biggest in Africa, as well as Mana Pools on the Zambezi River and Gona-Re-Zhou in the south. These parks offer tourists unspoilt viewing of large herds of elephant, hippos, zebra, crocodiles, sable antelope, lions and many other species. Zimbabwe is one of the world leaders in its programme to preserve the rhino population and these animals maybe viewed in protected game areas such as the historic Matopos National Park near Bulawayo. The Matopos Hills near Bulawayo are remarkable. Situated 30 kilometers south of the city, they cover about 2000 square kilometers. This is an area of wind-sculptured kopjes (hills) and balancing rock formations, alternating with cool green wooded valleys inhabited by herds of sable antelope and other wild animals including the magnificent leopard. Areas of interest for the international investor include joint ventures with local operators in the development of lodges and hotels safari operations and small game farms or conservancies. There are further opportunities in the establishing of car hire or taxi services, and tourist transportation. Other tourist attractions include the World Heritage site of the Great Zimbabwe Ruins situated close to Masvingo and the Mutirikwi Dam National Park and the mountains of Nyanga and Chimanimani in the Eastern Highlands. Investor enquiries should be made to the Zimbabwe Tourism Authority in the first instance. Electronics In the electronics industry, many additional makes of computers, office equipment, radio, television and video equipment are being marketed. A whole new educational system to provide training in new technology has been introduced. Service Industries Opportunities exist for the investor in the distribution and marketing of locally manufactured and imported products into the Southern and Central African trading areas, especially into countries such as Mozambique, Angola and, very recently, the Democratic Republic of Congo. During the last few years' local and international investors have introduced new products into the market especially in the motor industry with new models of passenger and commercial vehicles, heavy vehicles and agricultural tractors and implements. Back up spare parts, distributive and service facilities have also been established. Other Industries There are still many opportunities in commerce both internally and in the provision of exports to neighbouring territories where, in some instances, basic commodities or consumer goods are in short supply. Investment opportunities exist through the establishment of links with existing service industries that could result in the provision of a wider range of services in Zimbabwe and the region.
Insurance An investor in any area in Zimbabwe can be assured of being able to obtain the full range of insurance cover necessary to operate a business. The Zimbabwean Insurance market is well developed with about fifteen Insurance Companies transacting short-term business and five transacting life business. More than twenty Insurance Brokers with some of the best-known international broking houses represented serve the market. The Reinsurance market is also well developed with Zimbabwean companies operating into the Southern African region. To cater for the new investor or industrialist the short-term side of the market offers all types of cover. There is opportunity for the investor to provide more specialist services or to link up with existing local companies. From January 1999 insurance companies, broking houses and agents were exempted from charging sales tax on services as long as these services are related to or are on behalf of a registered group pension fund. A sound regulatory framework is in place through the Commissioner of Insurance to supervise the industry and protect customers. In Zimbabwe some companies have direct international links, which facilitate a transfer of technology and know-how enabling them to offer world-class services. Of importance to investors is the legal requirement that all insurance, including project development insurance, be placed locally. With the sophistication of the industry this does not present a major problem. In
the first instance, all enquiries should be made to the Insurance
Association of Zimbabwe. |
ZIMBABWE
