VZCZCXRO8650
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0020/01 0150725
ZNR UUUUU ZZH
R 150725Z JAN 10
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 5299
RUCPCIM/CIMS NTDB WASHDC
RUCPDOC/USDOC WASHDC
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 2417
RUEHAR/AMEMBASSY ACCRA 3248
RUEHDS/AMEMBASSY ADDIS ABABA 3359
RUEHRL/AMEMBASSY BERLIN 1782
RUEHBY/AMEMBASSY CANBERRA 2616
RUEHDK/AMEMBASSY DAKAR 2986
RUEHKM/AMEMBASSY KAMPALA 0047
RUEHNR/AMEMBASSY NAIROBI 0049
RUEHGV/USMISSION GENEVA 2517
RUZEHAA/CDR USEUCOM INTEL VAIHINGEN GE
RUEAIIA/CIA WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEFDIA/DIA WASHDC
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RUEKJCS/JOINT STAFF WASHDC
RHEHAAA/NSC WASHDC
UNCLAS SECTION 01 OF 11 HARARE 000020
AF/S FOR B. WALCH
EEB/IFD/OIA FOR D. AHN
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
COMMERCE FOR R. TELCHIN
TREASURY FOR D. PETERS AND T. RAND
NSC FOR SENIOR AFRICA DIRECTOR M. GAVIN
STATE PASS TO USAID FOR L. DOBBINS AND J. HARMON
STATE PASS TO USTR
SIPDIS
E.O.12958: N/A
TAGS: EINV EFIN ETRD ELAB KTDB PGOV USTR OPIC ZI
SUBJECT: 2010 INVESTMENT CLIMATE STATEMENT - ZIMBABWE
REF: 09 STATE 124006
1. Zimbabwe's gross domestic product (GDP) declined by roughly 50
percent over the past decade, possibly the largest peacetime
contraction ever recorded. The International Monetary Fund (IMF)
estimates that GDP shrank by 14 percent in 2008 alone. In July 2008
inflation reached the officially estimated level of 231 million
percent. (In subsequent months, the rate accelerated dramatically
but authorities gave up reporting official figures.) The
hyperinflation ended overnight when the GOZ officially dollarized
the economy at the beginning of 2009. As a result, Zimbabwe's
consumer price index fell by 6 percent between January and November
2009.
2. Zimbabwe generally ranks poorly in global comparisons of
competitiveness and corruption.
Index Year Zimbabwe's Ranking
----- ---- ------------------
TI Corruption Perceptions 2009 146 of 180
Heritage Economic Freedom 2009 178 of 179
World Bank Doing Business 2010 159 of 183
In addition, Zimbabwe ranked second-to-last out of 133 countries in
the World Economic Forum's Global Competitiveness Index for 2009-10.
And the Vancouver-based Fraser Institute's 2008-09 Annual Survey of
Mining Companies ranked Zimbabwe 65th out of 71 regions surveyed on
the attractiveness of government mining policies.
------------------------------
Openness to Foreign Investment
------------------------------
3. Government policy papers recognize the need for foreign direct
investment to improve the country's competitiveness. This includes
encouraging public-private partnerships in order to enhance
technological development. Official statements also emphasize the
need to improve the investment climate by restoring the rule of law
and sanctity of contracts. Despite extremely difficult economic
conditions over the past decade, a few U.S. multinationals
maintained subsidiaries in Zimbabwe, largely holdovers from better
years a decade and more ago. Many others sell their products
through certified dealers.
4. The government's priority sectors for foreign investment are
manufacturing, mining, and infrastructure development for tourism.
In these sectors foreign investors were permitted to own up to 100
percent of an enterprise, although joint ventures with local
investors were encouraged. In 2008, however, the government
introduced a new law, the Indigenization Act, which requires that
"indigenous Zimbabweans" own at least 51 percent of all enterprises.
It remains unclear exactly how or when the government intends to
enforce this requirement. The government also intends to introduce
Qenforce this requirement. The government also intends to introduce
amendments to the Mines and Minerals Act to spell out indigenization
requirements in the mining industry (see below).
5. The government reserves several sectors for local investors.
Under current laws, foreign investors wishing to participate in
these sectors may only do so by entering into joint venture
arrangements with local partners. The foreign investors may not own
more than 35 percent of the operation. These rules apply to the
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following industries:
Agriculture
-- Primary production of food and cash crops
-- Primary horticulture
-- Game, wildlife ranching, and livestock
-- Forestry
-- Fishing and fish farming
-- Poultry farming
-- Grain milling
-- Sugar refining
Transportation
-- Road haulage
-- Passenger bus, taxis, and car hire services
-- Tourist transportation
-- Rail operations
Retail and wholesale trade, including distribution
-- Barber shops, hairdressing, and beauty salons
-- Commercial photography
-- Employment agencies
-- Estate agencies
-- Valet services
-- Manufacturing, marketing, and distribution of armaments
-- Water provision for domestic and industrial purposes
-- Bakery and confectionary
-- Tobacco packaging and grading post auction
-- Cigarette manufacturing
6. Foreign investors wishing to start a new project in Zimbabwe must
first register with and be approved by the Zimbabwe Investment
Authority, which then issues investment certificates. This is the
first port of call for anyone wishing to invest in Zimbabwe.
7. All private firms are required to incorporate and register with
the Registrar of Companies within the framework of their investment
certificate or exchange control approval. Foreign investment in
existing companies requires approval from the Reserve Bank of
Zimbabwe (RBZ), as the central bank is known. Applications are
submitted to the RBZ's Exchange Control Department through the
investor's commercial bank or merchant bank or other authorized
dealer. Foreign investors with valid investment certificates may
acquire real estate.
8. In the mid-1990s, the government identified privatization of
state-owned enterprises as a priority, but only two have been
successfully privatized since then. Lack of political will, the
enterprises' operational inefficiencies, and weak balance sheets
make it unlikely that privatization will go forward in the near
term.
9. As Zimbabwe's relations with the U.S. and European nations
deteriorated in recent years, the government began to encourage
economic ties with Asian countries, particularly China, as a means
of arresting further economic decline and combating what it casts as
neo-colonialism. Under this "Look East" policy, selected Asian
investors have been offered access to reserved sectors, sometimes at
the expense of local or established foreign investors. Despite the
official emphasis placed on these ties and a few high profile
project announcements, Asian investment is still a small fraction of
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existing investment from South Africa and the U.K.
--------------------------------
Conversion and Transfer Policies
--------------------------------
10. For the past several years, Zimbabwe's exchange rate policies
made it difficult for firms to obtain foreign currency, and this in
turn caused crippling shortages of fuel, electric power, and other
imported goods and components. Other consequences included defaults
on public and private sector debt and a sharp decline in industrial,
agricultural, and mining operations. In 2009 the government lifted
exchange controls (with most transactions now conducted in U.S.
dollars), but the country's continued poor export performance and
the lack of access to multilateral concessional lending mean that
external financing is still hard to come by. In view of this, the
RBZ has not been able to pay back money expropriated prior to 2009
from the foreign currency accounts of private companies and
non-governmental organizations. The Foreign Exchange Control Act
that regulated currency conversions and transfers has been
extensively reviewed in line with recommendations from both the
Southern African Development Community (SADC) and the International
Monetary Fund (IMF). The review is designed to ensure transparency,
certainty, and conformity with Zimbabwe's new multi-currency
monetary regime.
11. Exporters now retain 100 percent of their foreign currency
account balance for their own use. This has removed the anti-export
bias associated with the previous system of surrendering a certain
proportion to the RBZ at the highly over-valued official exchange
rate.
------------------------------
Expropriation and Compensation
------------------------------
12. Despite provisions in Zimbabwe's constitution that prohibit the
acquisition of private property without compensation, in 2000 the
government sanctioned uncompensated seizures of privately owned
agricultural land. Many of the farms seized were subsequently
transferred to government officials and other regime supporters.
The government in April 2000 amended the constitution to authorize
the compulsory acquisition of privately owned commercial farms with
compensation limited to the improvements made on the land. In
September 2005, the government amended the constitution again to
transfer ownership of all expropriated land to the government.
Since the passage of this amendment, top government officials,
ZANU-PF party supporters, and members of the security forces have
continued to disrupt production on commercial farms, including those
owned by foreign investors and covered by Bilateral Investment
Qowned by foreign investors and covered by Bilateral Investment
Promotion and Protection Agreements (BIPPAs).
13. In November 2006, the government issued the first batch of
99-year leases for land re-allocated to 125 farmers. These leases,
however, are not readily transferable. The government retains the
right to withdraw the lease at any time.
14. The government's program to seize commercial farms without
either the intention or the funds to compensate the titleholders,
who have no recourse to the courts, has raised serious questions
about respect for property rights and the rule of law in Zimbabwe.
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Accordingly, Zimbabwe was ranked 119 out of 183 countries considered
with respect to the country's ability to protect investment under
the World Bank Group's "Doing Business 2010" Report.
15. President Mugabe and other politicians have in the past
threatened to target the mining and manufacturing sectors for
similar forced indigenization. In 2008 the government amended the
Mines and Minerals Act, outlining indigenization requirements for
minerals. For strategic energy minerals (coal, methane, uranium),
the legislation would require mining companies engaged in their
extraction or exploitation to transfer ownership to the state of 51
percent of the shares; 25 percent would be without compensation.
For precious metals and precious stones, 25 percent of the shares
must be transferred to the state without compensation and a further
26 percent are required to be owned by the state or by indigenous
Zimbabweans.
16. In March 2008, the government enacted the Indigenization and
Economic Empowerment Bill that mandates, over time, 51 percent
indigenous ownership of businesses.
------------------
Dispute Settlement
------------------
17. Zimbabwe has acceded to the 1965 convention on the settlement
of investment disputes between states and nationals of other states
and to the 1958 New York convention on the recognition and
enforcement of foreign arbitral awards.
18. In the event of an investment dispute, the Government of
Zimbabwe agrees, in theory, to submit the matter for settlement by
arbitration according to the rules and procedures promulgated by the
United Nations Commission on International Trade Law (UNCITRAL) once
the investor has exhausted the administrative and judicial remedies
available locally. On the other hand, Constitutional Amendment 17,
enacted in 2005, removed the right of landowners whose land has been
acquired by the government to challenge the acquisition in court.
19. A group of Dutch farmers whose farms were seized under the land
reform program took their case to the International Centre for the
Settlement of Investment Disputes (ICSID) in April 2005, demanding
that Zimbabwe honor its BIPPA with the Netherlands. The case was
heard by a tribunal in Paris in November 2007, and the tribunal
issued a verdict favorable to the farmers. Zimbabwe's government
acknowledged that the farmers had been deprived of their land
without payment of compensation but disputed the amount the farmers
claimed in damages.
20. In a related case, a three-judge panel of the SADC Tribunal in
Windhoek, Namibia, ruled in 2008 that Zimbabwe's violent land reform
exercise discriminated against a group of white farmers who filed an
Qexercise discriminated against a group of white farmers who filed an
application challenging the seizure of their farms. The Tribunal
ruled that the government was in breach of the SADC treaty with
regard to discrimination. The government has refused to recognize
the ruling. In September 2009 the government said Zimbabwe had
withdrawn from the jurisdiction of the SADC Tribunal. This appeared
to be a bid to stop the effect of judgments against it by the
Windhoek-based court. The government argued that the protocol
establishing the Tribunal had not been ratified by the required
two-thirds majority of the total membership of SADC.
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21. Government efforts to influence and intimidate the judiciary
since the late 1990s have raised serious concerns about investors
receiving a fair hearing in local courts. In addition, the
government and ruling elite have ignored numerous adverse judgments,
and senior officials have reiterated publicly that court orders that
are not politically acceptable to ZANU-PF will not be honored.
Administration of justice in those commercial cases that lack
political overtones is still generally impartial. As government
revenue has declined, however, court resources have dwindled and
dockets have become backlogged.
---------------------------------------
Performance Requirements and Incentives
---------------------------------------
22. Several tax breaks are available for new investment by foreign
and domestic companies. Capital expenditures on new factories,
machinery, and improvements are fully deductible and the government
waives import tax and surtax on capital equipment. Other incentives
for investors include:
-- Investment allowance of 15 percent in the year of purchase of
industrial and commercial buildings, staff housing and articles,
implements, and machinery;
-- Twenty-five percent special initial allowance on the cost of
industrial buildings and commercial buildings and machinery in
growth point areas is granted as a rebate for the first four years;
-- Special mining lease provisions entitling the holder to specific
incentive packages to be negotiated with the Ministry of Mines;
-- Refund of value added tax (15 percent) for capital goods
purchased in Zimbabwe and intended for use in priority projects or
investment in growth points.
23. There are no general performance requirements outside of Export
Processing Zones. Government policy, however, encourages investment
in enterprises that contribute to rural development, job creation,
exports, use of local materials, and transfer of appropriate
technologies.
24. There are no discriminatory import or export policies affecting
foreign firms, although the government's approval criteria are
heavily skewed toward export-oriented projects. Import duties and
related taxes range as high as 110 percent. Export Processing Zone
designated companies must export at least 80 percent of output.
25. Government participation is required in new investments in
strategic industries such as energy, public water provision,
railways, and armaments. The terms of government participation are
determined on a case-by-case basis during license approval. The few
foreign investors (for example from China and Iran) in reserved
strategic industries have either purchased existing companies or
Qstrategic industries have either purchased existing companies or
have supplied equipment and spares on credit.
26. Foreign investors are expected to make maximum use of
Zimbabwean management and technical personnel, and any investment
proposal that involves the employment of foreigners must present a
strong case for doing so in order to obtain work and residence
permits. Normally, the maximum contract period for a foreigner is
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three years, but this will be extended to five years for individuals
with highly specialized skills. Foreigners who have prior
permission from the RBZ may remit one-third of their salaries.
--------------------------------------------
Right to Private Ownership and Establishment
--------------------------------------------
27. Although Zimbabwean law guarantees the right to private
ownership, this right is increasingly not respected in practice. As
noted above, the government has in recent years seized thousands of
private farms and conservancies, including ones belonging to
Americans and other foreign investors, without due process or
compensation. Most of these property owners held Zimbabwe
Investment Authority investment certificates and purchased their
land after independence in 1980. Despite repeated U.S. protests,
the government has not addressed the expropriation of property
belonging to U.S. citizens.
-----------------------------
Protection of Property Rights
-----------------------------
28. Prior to 2009, the government's demonstrated desire to expand
its control of the economy put many investments, particularly in
real property, at risk. The government's 2005 Operation Restore
Order resulted in more than 700,000 persons losing their homes,
their means of livelihood, or both, according to UN estimates. Many
of these properties had proper titles and licenses. Although
Operation Restore Order officially ended in 2005, the government
continued to evict smaller numbers of people from their homes and
businesses, primarily in and around Harare, in 2006 and 2007. In
addition to the thousands of agricultural properties seized under
land reform during the past ten years, in late 2005, the government
for the first time authorized the seizure of non-agricultural land
for the purpose of residential construction in a Harare suburb.
29. Since independence, Zimbabwe has applied international patent
and trademark conventions. It is a member of the World Intellectual
Property Organization. Generally, the government seeks to honor
intellectual property ownership and rights, although there are
serious doubts about its ability to enforce these obligations due to
a lack of expertise and manpower. Pirating of videos and computer
software is common.
30. The judiciary generally upholds the sanctity of contracts
between private companies. In the case of contracts involving the
government or politically influential individuals, however,
judgments sometimes appear biased.
-------------------------------------
Transparency of the Regulatory System
-------------------------------------
Q-------------------------------------
31. The government's officially stated policy is to encourage
competition within the private sector. But bureaucratic functions
in this economy lack transparency, and corruption within the
regulatory system is increasingly worrisome.
32. The adoption of the multi-currency system in 2009 stabilized
prices and removed the need for price controls. Consequently, the
government no longer controls prices of goods and services.
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Nevertheless, the National Incomes and Prices Commission still
exists to monitor price developments at home relative to those in
the region.
--------------------------------------------- -----
Efficient Capital Markets and Portfolio Investment
--------------------------------------------- -----
33. Zimbabwe's stock market has 79 publicly-listed companies. In
September 1996, the government opened the stock and money markets to
limited foreign portfolio investment. Since then, a maximum of 40
percent of any locally-listed company can be foreign-owned with any
single investor allowed to acquire up to 10 percent of the
outstanding shares. Investment on the Zimbabwe Stock Exchange (ZSE)
surged in real terms in 2007 and most of 2008 as risk-seeking
foreign investors were drawn to Zimbabwe by a combination of
undervalued assets and the expectation of political change in the
short-to-medium term. Furthermore, foreign investors recognized
that most companies registered on the ZSE were already compliant
with the new Indigenization Act. The introduction of stringent
trading conditions on November 17, 2008, which required all trades
to be backed by a letter from a bank confirming the availability of
funds, burst the speculative bubble. Between November 20, 2008, and
February 19, 2009, there was no trading activity on the exchange.
Following dollarization of the economy in March 2009 and the
re-opening of the ZSE, trading has been characterized by thin
volumes. Moreover, the public stock of many smaller companies is
closely held. Yet market capitalization grew substantially from
about US$1 billion in February to around US$4.1 billion by the end
of December 2009.
34. Although the government introduced a 5 percent withholding tax
on the sale of marketable securities in 2005, this was reduced to
just 1.48 percent in November 2009, while the tax on buying amounts
to 1.73 percent. At a total of 3.21 percent, the new rates are now
comparable with the average of 3.5 percent for the region. As a way
of raising funds for the state, the government mandated that
insurance companies and pension funds invest between 25 and 35
percent of their portfolios in prescribed government bonds.
35. Zimbabwe's severe economic problems drove foreign direct
investment (FDI) inflows from US$103 million in 2005 to US$40
million in 2006, according to the World Investment Report compiled
by the United Nations Conference on Trade and Development (UNCTAD).
In 2008 net FDI declined from US$66 million the year before to US$44
million.
36. Once relatively robust by regional standards, Zimbabwe's
financial sector has contracted greatly in recent years as business
Qfinancial sector has contracted greatly in recent years as business
evaporated. Three major international commercial banks and a number
of regional and domestic banks operate with a total of over 200
branches. Following the well-publicized failure of a number of
financial institutions in 2003, primarily due to fraud and inept
management, RB regulations have been tightened. Nonetheless,
financial institutions have an uncertain future due to liquidity
constraints arising from low foreign currency inflows and lack of a
local money market. Given that the economy has dollarized and that
the RBZ is highly under-capitalized, the banking system has no
lender of last resort. On average, banks lend less than 50 percent
of their deposits to guard against liquidity risk.
------------------
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Political Violence
------------------
37. The Movement for Democratic Change, a political party that
opposed ZANU-PF and President Mugabe until entering into a coalition
in February 2009, and civil society groups operate in an environment
of intimidation and repression. Human rights organizations reported
that physical and psychological torture perpetrated by security
agents and supporters of ZANU-PF increased after the 2008 elections.
Individuals and companies out of favor with ZANU-PF, or regarded by
ZANU-PF and its supporters as aligned with the MDC, routinely suffer
harassment and bureaucratic obstacles in their business dealings.
On occasion, domestic businesspeople out of favor with the
government have been incarcerated for allegedly engaging in illegal
business practices.
38. Despite widespread dissatisfaction with government policy, there
have been no large-scale demonstrations. Sporadic cases of looting
by soldiers and small-scale demonstrations have occurred in recent
years. The disappearance of ammunition and weapons from a
government armory in October 2009 resulted in a number of soldiers
and MDC supporters being arrested and charged with theft.
----------
Corruption
----------
39. There is widespread corruption in government. Implementation of
the government's ongoing redistribution of expropriated commercial
farms has substantially favored the ruling party elite and lacks
transparency.
40. In 2005 the government enacted an Anti-Corruption Act that
established a government-appointed Anti-Corruption Commission to
investigate corruption; however, it includes no members from civil
society or the private sector. The Ministry of State Enterprises,
Anti-Monopolies, and Anti-Corruption was also established to oversee
and coordinate the government's efforts to combat corruption;
however, government officials and police lack sufficient political
backing at senior levels of the government to effectively
investigate cases. The government prosecutes individuals
selectively, focusing on those who have fallen out of favor with
ZANU-PF and ignoring transgressions by members of the favored
elite.
41. The inclusive government intends to enhance the institutional
capacity of the Anti-Corruption Commission, whose members are yet to
be interviewed and selected. In addition, the government intends to
improve accountability in the use of state resources.
-------------------------------
Bilateral Investment Agreements
-------------------------------
42. The U.S. has no bilateral investment or trade treaty with
Zimbabwe. Zimbabwe has BIPPAs with 17 countries; only four of these
QZimbabwe. Zimbabwe has BIPPAs with 17 countries; only four of these
treaties (with the Netherlands, Denmark, Germany, and Switzerland)
have been ratified. In spite of these agreements, the government
has not protected investments undertaken by nationals from these
countries, particularly with regard to land. In recent months, a
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farm belonging to a German national was seized by an army officer
and the government did not intervene, despite the assurance that
Zimbabwe would honor all obligations and commitments to
international investors.
--------------------------------------------
OPIC and Other Investment Insurance Programs
--------------------------------------------
43. The U.S. Government and Zimbabwe concluded an OPIC agreement in
April 1999. Zimbabwe acceded to the World Bank's Multilateral
Investment Guarantee Agency (MIGA) in September 1989. Support from
the Export-Import Bank of the U.S. is not available to Zimbabwe.
Many other major donor countries have also suspended their trade
finance and export promotion programs, as well as investment
insurance, due largely to Zimbabwe's mounting multilateral and
bilateral arrears and deteriorating investment climate.
-----
Labor
-----
44. Zimbabwe's interconnected economic and political crises have
prompted many of the country's most skilled and well educated
citizens to emigrate, leading to widespread labor shortages for
managerial and technical jobs. At the same time, the severe
contraction of the economy in recent years has caused formal sector
employment to drop significantly. The best available surveys place
formal sector unemployment as high as 80 percent. Independent
analysts estimate that only about 700,000 people, or roughly 7
percent of Zimbabwe's population, are employed in the formal sector.
As noted above, foreign investors are encouraged to hire local
nationals.
45. The country's HIV/AIDS epidemic is also taking a heavy toll on
the workforce. The government estimated in 2009 that 13.7 percent
of adults were infected with HIV.
46. The government is a signatory to International Labor
Organization (ILO) conventions protecting worker rights, although
the world body has designated Zimbabwe as a "notorious country" for
its continued attempts to limit workers' right to organize and hold
labor union meetings. The 1985 Labor Relations Act set strict
standards for occupational health and safety, but enforcement is
fairly lax and inconsistent across the industrial sectors. In
November 2008 the ILO appointed a commission of inquiry to
investigate complaints that worker rights were violated under ILO
Conventions 26 and 87. The ILO has not yet released the results of
the inquiry.
47. Collective bargaining takes place through a National Employment
Council (NEC) in each industry, comprising representatives from
labor, business, and government. In addition, the Zimbabwe Congress
of Trade Unions (ZCTU), the country's umbrella labor organization,
Qof Trade Unions (ZCTU), the country's umbrella labor organization,
advocates for workers' rights.
48. A Tripartite Negotiating Forum (TNF) was established in 2001
for labor, business, and government to tackle macro-social issues.
These talks have been fitful and unproductive since their inception,
however. A continuing impasse for the TNF is disagreement between
business and labor over indexing wages to the poverty datum line
(PDL), which calculates the minimum required for a family of five to
HARARE 00000020 010 OF 011
pay basic expenses. Independent economists estimate that roughly 80
percent of Zimbabwe's population lives below the PDL.
49. The government continues to harass labor unions and their
leaders. In May 2008 prior to the presidential run-off in June,
police arrested leaders of the Zimbabwe Congress of Trade Unions
(ZCTU) for "spreading falsehoods prejudicial to the state." In
November 2009, the ZCTU president and four union members were
arrested for allegedly violating the Public Order and Security Act
by holding consultative meetings with workers without police
permission even though trade unions are exempt from seeking police
authority. Under Zimbabwe labor law, the government can intervene
in the ZCTU's internal affairs if it determines that the leadership
is not acting in the workers' interest. The government has
threatened to eliminate the ZCTU and taken steps to marginalize the
traditional unions and the formal labor dispute resolution
mechanism. To undercut the strength of the ZCTU, the government
created an alternative umbrella organization, the Zimbabwe
Federation of Trade Unions (ZFTU), after ZANU-PF fared poorly in the
2000 parliamentary elections. Outside of the government, however,
the ZFTU is not regarded as a legitimate labor organization. The
ZCTU remains the voice of labor in Zimbabwe and the country's
official and internationally recognized labor organization.
------------------------------
Foreign-Trade Zones/Free Ports
------------------------------
50. The government promulgated legislation creating Export
Processing Zones (EPZs) in 1996. Zimbabwe now has 183
EPZ-designated companies. Benefits include a five-year tax holiday,
duty-free importation of raw materials, and capital equipment for
use in the EPZ, and no tax liability from capital gains arising from
the sale of property forming part of the investment in EPZs. Since
January 2004 the government has generally required that foreign
capital comprise a majority of the investment. The requirement on
EPZ-designated companies to export at least 80 percent of output has
constrained foreign investment in the zones. The merger between the
Zimbabwe Investment Centre and the Zimbabwe Export Processing Zones
Authority, which began in 2006, has been completed and the new
institution -- the Zimbabwe Investment Authority -- now serves as a
one-stop shop for both local and foreign investors.
------------------------------------
Foreign Direct Investment Statistics
------------------------------------
51. Zimbabwe Net Direct Investment Flows 2000-2008
(US$ million)
2000 2001 2002 2003 2004 2005 2006 2007 2008
Q2000 2001 2002 2003 2004 2005 2006 2007 2008
16 0 23 4 9 103 40 66 44
Source: UNCTAD, World Investment Report 2009.
---------
Resources
---------
52. Zimbabwe Investment Authority
Investment House
HARARE 00000020 011 OF 011
109 Rotten Row
P.O. Box 5950
Harare
Telephone: (263) (4) 757 931/4
Fax: (263) (4) 773 843
www.zia.co.zw
Zimbabwe Tourism Authority
www.zimbabwetourism.co.zw
State Enterprise Restructuring Agency
www.sera.co.zw
Zimtrade
www.zimtrade.co.zw
Zimbabwe International Trade Fair
www.zitf.co.zw