The recent MOU between the Zimbabwe Building Contractors Association (ZBCA) and the Zimbabwe Investment and Development Agency (Zida) has brought hope for Foreign Direct Investments (FDI) with an estimated US$ 3 billion over the next five years, ZBCA president Tinashe Manzungu has revealed.
FDI inflows have fluctuated, averaging between US$400 million and US$500 million annually in recent years according to the Zimbabwe National Investment Policy. It is against this background that Dr Manzungu noted that the forecast for FDI growth following the marriage between ZBCA and ZIDA would stand at 10 to 15% per annum. Our writer Sharon Kavhu (SK) sat down with Dr Manzungu for an interview. Below are the excerpts of that interview.
SK: We understand that ZBCA and Zida have signed an MOU. How will the collaboration between the two entities stimulate FDI inflows into Zimbabwe?
Dr Manzungu: The collaboration between the ZBCA Zida plays a crucial role in facilitating FDIs in Zimbabwe. Here are several key points detailing how this partnership can enhance the investment landscape in the country:
Streamlining Investment Processes
Zida is tasked with creating a conducive environment for foreign investments, simplifying the bureaucratic processes. By collaborating with ZBCA, which understands the local construction landscape, Zida can streamline procedures such as permits and licensing specifically for construction projects. This can significantly reduce the time and cost for foreign investors looking to establish construction ventures, thus encouraging more FDIs.
Building Investor Confidence
The partnership can enhance investor confidence by providing clear and consistent information about the construction sector in Zimbabwe. ZBCA, as a local authority, can offer insights into the reliability of local contractors, the quality of construction materials, and the market’s overall stability. Together with Zida, they can develop comprehensive investment guides and reports that present Zimbabwe as a viable and attractive option for foreign investors.
Facilitation of Public-Private Partnerships (PPPs)
The collaboration will enable the formulation of robust public-private partnerships. By combining ZBCA’s industry knowledge with Zida’s investment framework, they can identify and structure PPP projects that are appealing to foreign investors. Such partnerships often lead to large-scale infrastructure developments that are essential for economic growth, ultimately attracting more FDIs.
Enhancing Skills and Capacity Building
ZBCA can work with Zida to facilitate training programs aimed at enhancing the skills of local contractors. This would involve inviting foreign experts and companies to engage in capacity-building initiatives. A more skilled workforce will assure foreign investors of the quality of work and competitiveness of the local construction sector, thus making Zimbabwe a more attractive investment destination.
Promoting Sector-Specific Opportunities
Zida can rely on ZBCA for market intelligence related to current trends and demands in the construction industry. This collaboration can help identify specific sectors (e.g., housing, infrastructure, renewable energy) that are ripe for investment, thus targeting foreign investors who specialise in those areas. Tailored investment opportunities can expedite the attraction of foreign capital.
Engagement in Policy Advocacy
The duo can advocate for favorable policies that enhance investment conditions in Zimbabwe. ZBCA can leverage its industry knowledge to provide feedback to Zida on existing policies that may hinder investments and suggest improvements. A coordinated push for reform can lead to a better business environment, attracting more foreign investors.
Networking and Business Linkages
ZBCA’s established network within the local construction industry can be leveraged to connect foreign investors with local contractors and suppliers. Such linkages can facilitate joint ventures and collaborative projects that not only bring in foreign capital but also foster technology transfer and skills development.
Showcasing Success Stories
By working together to showcase successful foreign investments in Zimbabwe, ZBCA and Zida can use these case studies as marketing tools to attract more FDIs. Highlighting successful projects will create a positive narrative about the investment climate and showcase the potential returns for potential investors.
Focus on Infrastructure Development
Given Zimbabwe’s infrastructural needs, the collaboration can facilitate targeted infrastructure projects that require foreign investment. ZBCA can identify priority areas, while Zida can market these opportunities to foreign investors, aligning their interests with Zimbabwe’s economic development goals.
Improving Regulatory Frameworks
Through collaboration, ZBCA and Zida can work on improving the regulatory frameworks that govern construction and investments. This may involve revising policies that create barriers for foreign investors or enhancing the transparency and predictability of regulations, thereby fostering a more attractive investment environment.
SK: In your view, what is the estimated reward that you expect in five years as a result of this collaboration?
Dr Manzungu: Estimating the potential FDI that can be attracted through the collaboration between the ZBCA and the ZIDA involves various factors, including historical trends, sector-specific developments, and the overall economic environment. While it’s important to note that these figures are rough estimates, here’s a summarised potential estimate over the next five years:
Rough Potential FDI Estimate Over the Next Five Years
Historical Baseline:
Current FDI Levels: According to the Zimbabwe National Investment Policy, FDI inflows have fluctuated, averaging around US$400 million to US$500 million annually in recent years.
Growth Potential:
- Impact of Collaboration: With ZBCA and ZIDA working together, they could realistically aim for: 10 to 15% Annual Growth Rate in FDI attributable to improved processes, investor confidence, and targeted promotions.
Five-Year Projection:
- Year 1: $500 million (baseline)
- Year 2: $550 million (10% increase)
- Year 3: $605 million (10% increase)
- Year 4: $666 million (10% increase)
- Year 5: $733 million (10% increase)
- Total FDI Over Five Years:
- Year 1: $500 million
- Year 2: $550 million
- Year 3: $605 million
- Year 4: $666 million
- Year 5: $733 million
Estimated Total: $3.054 billion over five years
SK: How will the new collaboration sealed by the recent signing of MOU promote policy advocacy and joint investment promote activities?
Dr Manzungu: The recent signing of an MOU marks a significant step forward in fostering collaboration between the ZBCA and relevant stakeholders. This agreement has the potential to enhance policy advocacy and joint investment activities in several key ways:
Unified Voice for Policy Advocacy
The MOU provides a platform for the ZBCA and its partners to present a unified voice on critical issues affecting the construction industry. By collaborating on advocacy efforts, stakeholders can leverage their collective influence to engage with government entities, regulatory bodies, and other key decision-makers. This unified approach ensures that the concerns and interests of builders, contractors, and associated industries are effectively communicated, which can lead to more favorable regulatory outcomes.
Shared Resources and Expertise
Collaboration under the MOU allows for the pooling of resources, knowledge, and expertise among members of the partnership. By sharing best practices, research findings, and insights into emerging trends, organisations can better advocate for policies that align with their collective goals. This collaborative knowledge-sharing can help identify gaps in existing policies and propose well-informed recommendations to policymakers.
Joint Investment Initiatives
The agreement can stimulate joint investment initiatives to tackle common challenges within the construction industry. By collaborating on investment projects, stakeholders can reduce risks and increase the likelihood of successful outcomes. For instance, co-investing in training programmes, technology adoption, or large-scale infrastructure projects can lead to improved efficiencies, higher quality standards, and greater competitive advantage.
Enhanced Capacity Building
The MOU can facilitate joint training programs, workshops, and seminars that strengthen the skills and knowledge of professionals within the construction sector. Capacity building efforts that arise from this collaboration will equip stakeholders with the necessary tools to effectively navigate regulatory frameworks and advocate for favorable policies, thereby enhancing overall industry standards.
Promotion of Sustainable Practices
Through collaborative efforts outlined in the MOU, the ZBCA and its partners can jointly promote sustainable practices in construction. Advocating for policies that support green building techniques and environmentally friendly practices can not only improve industry standards but also attract investment focused on sustainability, creating long-term benefits for both the environment and the economy.
Strengthened Networks and Relationships
The signing of the MOU can boost networking opportunities and foster relationships between various stakeholders in the construction industry. By connecting different entities—such as government departments, NGOs, and private investors—this collaboration can open avenues for dialogue, creating a conducive environment for policy change and investment opportunities.
Monitoring and Evaluation Framework
The MOU can also establish a framework for monitoring and evaluating the outcomes of joint initiatives. Regular assessment of policy impact and investment success will help refine strategies, ensuring that collaborative endeavors remain aligned with the evolving needs of the construction industry.
SK: What is the essence of this MOU and how is it relevant in infrastructure development in Zimbabwe as well as other southern African countries?
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Dr Manzungu: The essence of an MOU in the context of infrastructure development in Zimbabwe and other Southern African countries lies in its ability to formalise cooperation, establish a framework for collaboration, and outline the mutual goals and responsibilities of the involved parties. Here’s a closer look at the significance of the MOU and its relevance to infrastructure development in the region:
Framework for Collaboration
The MOU provides a clear framework for collaboration among stakeholders, including government agencies, private sector players, NGOs, and industry associations. By establishing shared objectives, it facilitates coordinated action and streamlines efforts towards common goals in infrastructure development. This alignment is crucial for efficiently mobilising resources and expertise.
Advocacy for Policy Support
The MOU can amplify the collective voice of stakeholders advocating for supportive policies and regulatory frameworks that promote infrastructure investment and development. By uniting various sectors involved in infrastructure, the MOU enables more robust dialogue with government entities and enhances the capacity to push for both policy changes and the prioritisation of infrastructure projects.
Attracting Investment
Infrastructure projects often require significant investment, and a well-structured MOU can signal to potential investors that there is a commitment to collaboration and mutual benefit. This kind of assurance increases investor confidence, facilitating the flow of both domestic and foreign capital into infrastructure initiatives, which are essential for economic growth.
Regional Synergy
In Southern Africa, infrastructure development often faces challenges that transcend national borders, including common economic goals, shared resources, and regional trade initiatives. An MOU can foster cooperation among nations in the region, promoting initiatives such as cross-border infrastructure projects (e.g., roads, railways, energy) and integrated development plans that benefit multiple countries.
Capacity Building and Knowledge Sharing
The MOU can facilitate knowledge exchange and capacity-building initiatives among member organisations. This is vital for enhancing the skills and capabilities of local contractors and stakeholders involved in infrastructure projects. In a region where many countries are still developing their infrastructure capacities, this collaboration is essential for building a skilled workforce equipped to handle complex infrastructure challenges.
Sustainable Development Goals (SDGs)
With a growing focus on sustainability, the MOU can address how infrastructure development aligns with the Sustainable Development Goals (SDGs). It can establish commitments to sustainable practices in construction and infrastructure management, helping Zimbabwe and other Southern African nations meet their national and international sustainability obligations.
Resolving Challenges and Barriers
Infrastructure development in Zimbabwe and other Southern African countries often encounters various challenges, including funding shortages, bureaucratic hurdles, and technical expertise gaps. The MOU serves as a platform for stakeholders to collectively identify and address these barriers, promoting innovative solutions that facilitate project execution.
Monitoring and Accountability
The MOU can incorporate mechanisms for monitoring progress and ensuring accountability among stakeholders. This is critical for maintaining focus on goals related to infrastructure development and can help each party measure their contributions towards collective objectives
