ZIDA Q3: Mining Dominates, Accounts for 50% of Total Projected Investment Value
According to the Zimbabwe Investment Development Agency (ZIDA) Q3 report, the mining sector accounted for half of the projected value of licensed projects, totalling US$1.171 billion for the quarter. This highlights the sector’s significant role in the country’s economic growth aspirations.
By Ryan Chigoche
The total projected value of mining licenses issued was US$579.90 million, with 74 new licenses issued during this period—the highest number for any sector. In total, 168 new licenses were granted, solidifying the mining sector’s dominant position, representing 50% of the aggregate investment value. In comparison, the energy sector followed with 22%, while other sectors accounted for the remaining 16%.
The mining sector also remains the most popular area of interest, representing 18% of total investment inquiries. This statistic underscores sustained enthusiasm for the industry. Agriculture and manufacturing each accounted for 8% of inquiries, while other sectors, including automotive, construction, education, financial services, ICT, health, tourism, real estate, services, and transport, received fewer inquiries. Notably, “not specified” inquiries have decreased, indicating improved targeting and information dissemination.
“Also encouraging is the fact that investors have fully embraced the online DIY Licensing Portal. On September 1, 2024, the Agency adopted the digital DIY Portal as the sole means for investors to apply for the ZIDA Investment License. In terms of the sectors where investors are obtaining licenses, the mining sector continues to attract the most interest, closely followed by the energy sector,” commented Tafadzwa Chinamo, the agency’s Chief Executive.
“Looking ahead, ZIDA remains committed to attracting, facilitating, and establishing investments for economic growth and development. We will continuously refocus our strategies on sustainable development initiatives to unlock untapped potential and create meaningful economic growth that benefits all citizens,” he added.
During this period, there was a 9% increase in the number of licenses issued in Q3 2024 compared to Q2 2024. However, this represents a 7% decrease from the same quarter in 2023. This increase is attributed to enhancements in the licensing process, confirming that investors are increasingly adopting the online DIY Licensing Portal. Nonetheless, the agency recorded a 66% decrease in projected investment values compared to Q3 2023.
Regarding investor sentiment, the Investor Sentiment Survey, launched in Q2 in collaboration with the International Finance Corporation (IFC), closed on September 10, 2024. The IFC has begun validating and analyzing the responses, which will be included in the final report expected in Q4.
Project Pipeline
By the end of Q3, the projected value of projects processed through Business Development is estimated at US$14.9 billion, surpassing the Q3 target of US$11.25 billion.
However, there was a 56% decline in the number of licenses renewed compared to the same period in 2023. Globally, the renewal rate from 2023 to Q3 2024 was 100%, indicating that most investors licensed in 2022 are renewing their licenses. To promote timely renewals, the agency launched a campaign reminding investors of their obligations and associated penalties.
Of the 266 projects licensed in 2022, 72 were identified as operational by the end of September 2024, demonstrating that 27% of those projects became operational. The total reported investment during these renewals amounted to US$137.29 million, primarily from capital equipment imported by foreign shareholders.
Finally, most projects licensed in 2023 still hold valid licenses, with only three renewal submissions made to date. Actual investments from these projects will be reported in Q4 2024, coinciding with the agency’s rollout of the DIY Portal. Investors will be required to submit their investment update reports through this platform, ensuring a streamlined process for tracking project investments.