Open for business?

The report finds that despite the Mnangagwa administration's rhetoric of being 'open for business,' substantial foreign direct investment has not materialised due to a combination of bureaucratic red tape, policy inconsistency, and a lack of respect for property rights. While net FDI rose from US$247 million in 2017 to US$744 million in 2018, this remains far below the US$27 billion in deals signed by the president. The document highlights critical barriers including a 'dead asset' land tenure regime in agriculture, a lack of an independent central bank, and the pervasive influence of the military in the private sector. It concludes that the government's 'command and control' philosophy and the high-risk profile created by US sanctions and a history of bad debt continue to deter international investors.

• There is a significant gap between the investment deals signed by President Mnangagwa and actual FDI inflows; while US$744 million in FDI was received in 2018, this contrasts with approximately US$27 billion in signed agreements between 2018 and 2019.
• Zimbabwe's business environment is characterized by extreme bureaucratic inefficiency, ranking 140th out of 190 in the World Bank's 2019 Ease of Doing Business Index. Setting up a business can take between 100 and 209 days, significantly longer than in South Africa (21 days), Zambia (28 days), or Botswana (30 days).
• The agriculture sector is hindered by a land tenure regime that makes land 'un-bankable' and a 'dead asset' because neither white farmers (on five-year leases) nor indigenous farmers (on non-transferable 99-year leases) have security of tenure.
• The mining sector, which provided 60% of foreign currency earnings in 2018, faces challenges including a lack of exhaustive studies on viable mineral reserves and distortions caused by foreign currency retention policies that encourage primary producers to sell gold through small-scale miners.
• A severe currency crisis and strict capital controls have prevented international investors from repatriating profits and paying dividends, with companies like Anheuser-Busch Inbev having over US$100 million trapped in the country.
• Property rights remain precarious, evidenced by the occupation of Gaika mine in February 2018 and attempted evictions at FarFell Coffee Estate, suggesting that the rule of law is often superseded by political authority.
• US sanctions and the Office of Foreign Assets Control (OFAC) SDN List increase Zimbabwe's risk profile, making international banks reluctant to handle transactions and increasing insurance premiums for investors.
• The military's role in the economy has become more pronounced and decisive, particularly in the mining sector, where some investors claim the army demands stakes in companies in exchange for security.
• The government's 'command and control' ideology and the lack of independence of the Reserve Bank of Zimbabwe (RBZ) create opportunities for rent-seeking and arbitrage by the ruling elite.

APA

Chikohomero, R. (2019). Open for business? Institute for Security Studies. https://issafrica.s3.amazonaws.com/site/uploads/sar-33.pdf

Chicago

Chikohomero, Ringisai. Open for business? Institute for Security Studies, 2019. https://issafrica.s3.amazonaws.com/site/uploads/sar-33.pdf.

Wikipedia

{{cite report |last1=Chikohomero |first1=Ringisai |title=Open for business? |publisher=Institute for Security Studies |date=December 2019 |url=https://issafrica.s3.amazonaws.com/site/uploads/sar-33.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{chikohomero2019open, author = {Chikohomero, Ringisai}, title = {{Open for business?}}, institution = {Institute for Security Studies}, year = {2019}, month = dec, url = {https://issafrica.s3.amazonaws.com/site/uploads/sar-33.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }