Message from Ambassadors

Business Opportunities
in Zimbabwe
Titus Mehliswa Jonathan ABU-BASUTU
Ambassador of the Republic of Zimbabwe to Japan
H.E. Mr. Titus M. J. Abu-Basutu was appointed Ambassador to Japan in 2015. Ambassador Abu-Basutu has been ingovernment service since 1980 and prior to taking up the diplomatic assignment, he was in the Ministry of Defense.
Ambassador Abu-Basutu holds Master’s degrees in Strategy, Business Administration and International Relations. He
has keen interest in economic development issues.

Investment Climate in Zimbabwe
Zimbabwe’s diverse resource and human capitalendowment makes it an attraction to foreign
investment. Resources include chrome, coal, copper,gold, iron, nickel, diamonds, platinum, tin, and manyothers. These resources attract extractive investment.
Extractive investment without value addition may
not yield developmental impact. Consequently,
Zimbabwe government encourages accompanying
investment in value addition of these resources sothat locally there is beneficiation of those extracted
resources.
Zimbabwe has a high literacy rate (92%) accompanied
by abundant skills base due to investment bygovernment in education and skills development. Thisskilled human resource, makes Zimbabwe a uniquedestination for investment. The human resource hashigh aptitude, versatile in skills absorption, thus
presenting a unique flexibility in skills deployment
and reskilling for a business undertaking.
Basic Data of Zimbabwe• Population: Estimated at 17.3 million. (The next
population census will be in 2022.)• Land area: 390,757 km², a little larger thanJapan.
• GDP: USD22.04bn.
• Business language: English• Climate: Temperate, cold and dry in winter andmoderate, rains in summer. Temperature ranges
between 5 (0°C in some areas) – 35°C and lower
40s in the low veld along the Zambezi valley inthe north and Limpopo valley in the south.
32

2020.5

To further improve the investment climate, theGovernment has undertaken a host of reforms toimprove the Ease of Doing Business (EoDB.
Reforms have been undertaken in legislation andprocedures for establishing new business(investment). This has seen repeal and amendmentof various pieces of legislation to make the processesof establishing investments simple and easy for theconvenience of the investor. This thrust is a crucial
aspect of the Governments reform programme, theTransitional Stabilization Programme (TSP).
Following these reforms, Zimbabwe’s EoDB
rankings by the World Bank improved by 15 placesfrom 155 to 140. However reforms are still on going.
One significant aspect of the reform process has
been the establishment of a one-stop-shop forinvestors, the Zimbabwe Investment Development
Agency (ZIDA) whose Act came into force in 2020.
ZIDA is a one stop investment shop where under
one roof, investors complete all the processes andprocedures to start a business without having to visit
various offices at different locations for permits,certificates, documents, forms, licences etc.
To facilitate investment and business, Zimbabwe
boasts of a sound banking system of 15 Commercial
Banks, a Development Bank, 5 International
Financial Institutions; AfDB, Afrexim Bank, IMF,
Trade & Development Bank (TDB) and World
Bank. The commercial banks support any investor
in terms of movement of funds or financing ofbusiness. The high literacy rate is a credibleadvantage to both the investor and the consumer.
Zimbabwe is probably one of the few countries withhighest mobile penetration in Africa. Zimbabweans
are thus very adept at mobile banking. Most
transactions are done online or by phone, and cashtransactions are not as frequent as are mobile andcard transactions.

Investment Incentives
Zimbabwe offers a lot of opportunities to the investor.
It is a peaceful country focusing on economic
development targeting upper middle-incomeeconomy by 2030. Opportunities are abundant in
Manufacturing, Energy, Mining, Tourism,Agriculture,
Information Communication Technology (ICT),
Construction/Housing and Services sector.
There are various incentives for investment in anyof the foregoing sectors. The incentives include thefollowing:
1. Corporate income tax exemptions. Tax is zero
rated for the first 5 years of operation with acorporate tax rate of 15% applying thereafter.
This allows the investor to recoup the initialcosts of setting up operations and thus be on asound footing thereafter.
2. Waiver of duty on capital equipment/machinery.
This allows for duty free importation of capital
equipment/machinery for establishing abusiness.
3. Special initial allowance. This allowance is 50%

of cost from year one and then 25% in thesubsequent two years. It is allowable on expenditure
incurred on construction of new industrial buildings,
farm improvements, railway lines, staff housing,tobacco barns, enabling infrastructure or on
alterations or additions to existing aforementioned
items. It also applies to articles, implements,machinery and utensils bought for business.
4. Employees tax exemption. Exemption from nonresidents tax on fees for services that are not
locally available in Zimbabwe.
5. Non residents withholding tax on fees. Exemption
from non-residents tax on fees for services thatare not locally available in Zimbabwe.
6. Non residents withholding tax on royalties. An
exemption from non-residents tax on royalties.
7. Custom duty on raw materials. Inputs including
raw-materials, imported for use by companies
set up in Special Economic Zones (SEZ), areduty free. Except where such raw materials areproduced in Zimbabwe.
8. Capital gains tax. Zero rated capital gains tax.
9. Foreign exchange remittance incentives. Foreign
investors are entitled to the following:(1) No restriction on the amount of foreign
currency brought into the country for equity
investment in cash or capital equipment(2) 100% repatriation of dis-investment proceeds(3) 100% remittance of dividends(4) Operation of Foreign Currency Accounts(5) Freedom to borrow locally and offshore

Zimbabwe offers excellent tourist attractions; the world famous Victoria Falls (left photo), Mana Pools (right photo), Matopo Hills, Great
Zimbabwe National Monument, Hwange Game Reserve among many with 7 World Heritage sites.
So, visit Zimbabwe and you will invest in Zimbabwe! (Photos from https://www.zimbabwetourism.net/)
2020.533

Some of the foregoing incentives are geographical,
meaning applicable to SEZ and sectors or general to all
open business zones and sectors. Sector specific ones
are targeted at Agriculture, Mining, Manufacturing,Tourism and Transport. Agriculture is a critical sector
in Zimbabwe. Zimbabwe’s economy is agrobased andas such agriculture is the biggest employer in thecountry.
The ongoing reforms combined with sound banking
system and the incentives, present a lot of opportunities
for investment in Zimbabwe viz;
1. Privatization of State owned enterprises, presents
opportunities for investors through equity
partnership. These are in 11 State owned enterprises,
6 subsidiaries of the Industrial Development
Corporation and 17 subsidiaries of the Zimbabwe
Mining Development Corporation.
2. Manufacturing and processing: textiles weaving,knitting, dying and printing, clothing,agroprocessing such as food canning, milling,oil seed pressing and drying, wood furniture,
paper, leather work, metal working/fabrication,
pharmaceuticals/chemicals, for household andindustrial use, agro-chemicals
3. Energy: greenfields thermal projects, methanegas, leasing/rehabilitation of thermal power
stations, bio-diesel projects, hydropower projects,
renewable energy (solar farms)
4. Mining: diamond cutting/polishing, gold anddiamond jewellery making, lithium battery
manufacture, granite cutting/polishing
5. Tourism: infrastructure, hotels and lodges
development, transport services
6. Agriculture: value chain addition in meat
processing, fruits growing, and canning operations,horticulture, quality cotton is grown locallyrequiring ginning and spinning, sugar refinery,
milling for ethanol, molasses, power generation.
Tea/coffee processing, packaging, irrigation andinfrastructure development, tobacco processing,leather tanning.
7. ICT: networks development, cyber security,
software engineering, manufacture of electronic
gadgets; computers, phones, radios, televisions
34

2020.5

8. Construction/Housing: urban and rural housingwith social amenities in urban areas, apartments,
rehabilitation and maintenance of public buildings
and hospitals.
9. Innovative services to serve the economy
The investment policy of Zimbabwe is underpinnedby key principles of protection of investments, andnon-discriminatory practices, protection of intellectual
property rights, transparency and good regulatory
practices, adherence to environmental and socialstandards and market based investment laws andregulations, high governance standards, role clarity ofgovernment institutions, macro-economic stability
and provision of infrastructure by government. It is afree enterprise environment.
Ongoing policy and regulatory reforms improve theease of doing business and present a favourable
climate for investing in Zimbabwe. Whateverchallenges, these are a consequence of the ongoingtransformation and temporary. Some of the challenges
present themselves as investment opportunities, thus
for real “Zimbabwe is Open for Business”.
Embassy of the Republic of Zimbabwe
to Japan
TEL: 03-3280-0331
E-mail: zimtokyo@chive.ocn.ne.jp