What are the most exciting sectors to invest in Zimbabwe?
As a Corporate Law firm in Zimbabwe we are approached by various clients and potential clients who seek our guidance, not only on the general regulatory and compliance framework in Zimbabwe, but also on areas of opportunity that we see in the Zimbabwean economy. The fundamental question can thus be summarised as: “what are the sectors in Zimbabwe where I can experience tangible, long term growth?” As the economy stabilises and opens up, we hope to see a higher volume of funds flow as investment capital, and it is imperative that we have a good grasp of the sectors where clients and potential clients can unlock value for themselves and for the country
The sectors that have traditionally anchored Zimbabwe’s are mainly:
- Manufacturing and Industry; and
- Infrastructure Rehabilitation and Development.
These sectors require considerable amounts of capital and innovative capital structures which are flexible enough to deal with the challenges that typically occur in frontier markets; but just as importantly, they require that those who invest in these sectors have a long-term outlook, as these sectors could shape Zimbabwe’s future.
By way of example, as Zimbabwe has gradually become more and more dependent on imports due to either a lack of capacity, or complete collapse in some cases, in the manufacturing sector, our ability to generate and maintain reserves of foreign currency has suffered as a consequence due to an overreliance on imports and a lack of liquidity generating exports of locally manufactured goods.
The resuscitation of Zimbabwe’s manufacturing sector, as well as meaningful investment in the other sectors mentioned above, presents an exciting opportunity for investors looking at Zimbabwe. The centrality of the manufacturing sector to the future growth of Zimbabwe is not lost on Government either, as Government allows duty exemptions on imported capital equipment and importation of raw materials used in the manufacture of goods for export. Furthermore, from a fiscal perspective value added tax is also exempted on raw materials for further processing.
The Government has recognised that certain sub-sectors in the manufacturing sector are in need of significant investment, including foodstuffs, drinks and beverages, textile and ginning, clothing and footwear, paper printing and publishing, metal and non-metallic products, chemical and petroleum products as well as transport and equipment.
This need creates a corresponding opportunity for investors to help shape the future of Zimbabwe by using the regulatory and compliance framework outlined above to package attractive transactions for the benefit of investors and the country as a whole; and it is our intention as corporate lawyers in Zimbabwe to take this journey with our clients in order to help rebuild Zimbabwe’s economy for the benefit of future generations.