Harare — THE Bilateral Investment Promotion and Protection Agreement signed between South Africa and Zimbabwe in November last year to stimulate business initiatives and increase prosperity in both countries, has been ratified.

In a statement, the Ministry of Economic Planning and Investment Promotion said the Bippa was ratified on May 11.

This essentially means that it is now operational.

Bippa seeks to create favourable conditions for investment for South African investors in Zimbabwe and vice versa.

"The ministry wishes to advise that the Bippa between the Republic of South Africa and the Republic of Zimbabwe, signed on 27 November 2009, has since been ratified," said the ministry.

South Africa is one of Zimbabwe's largest trading partners and the latter is negotiating for US$50 million in lines of credit from the former while pursuing the restoration of the 2,65 billion rand facility made to Zimbabwe for 20 years.

Some of South Africa's major mining houses are invested in this country. Impala Platinum Mines own 87 percent of Zimbabwe Platinum Mines. Implats and Aquarius Mines own 100 of Mimosa Platinum Mines in Zimbabwe, with platinum contributing to Zimbabwe's major exports to South Africa.

Central African Gold, Metallon Gold, DGRGold, PPC, Nedbank, Aspen, First National Bank, Pharmacare, First Rand and Netcare have indicated interest to invest in Zimbabwe.

In 2007, Zimbabwe's exports to South Africa grew from just under 20 percent to about 27 percent, making it the country's biggest destination for manufactured goods.

In 2006, South Africa replaced Zambia as the country's biggest export destination after exports to Zambia declined 23,2 percent in 2007 from 26,2 percent in 2006.

Zimbabwe mainly imports the bulk of its basic commodities from South Africa while Zimbabwe exports minerals and agricultural products.

The operationalisation of the agreement comes almost after five years of negotiations and focus has now shifted on increasing trade volumes with South Africa to levels of 10 years ago as well as looking at new ways of doing business.

The implementation of the agreement will see the two countries engaging on issues relating to investment, trade and economic issues.

Some of the issues that would be tackled include challenges that investors from each country are facing and how such challenges can be dealt with as well as trade opportunities.

In addition, the two countries are also planning to create dialogue and engage the business community in both countries in order to provide a conducive environment for business and complement the Bippa.

Co-operation between the Confederation of Zimbabwe Industries and Business Unity of South Africa is expected to increase.

A number of South African companies, mainly in the mining sector, are willing to invest in the country, but were being held back by non-ratification of the Bippa.

The estimated value of South African businesses operating in Zimbabwe in 2003 was US$619 million while that of Zimbabwean businesses operating in South Africa was US$154 million.

International investors, including those from South Africa, often bemoaned lack of clarity regarding property rights in Zimbabwe.

The Industrial Development Corporation of South Africa has since indicated its willingness to invest in the country.

More investment is expected in Zimbabwe as the country recovers from almost a decade of economic stagnation -- the country is also relaxing some of its legislative framework, which was said to be hindering foreign direct investment.

The economy is expected to grow by about 4 percent with mining and tourism expected to contribute meaningfully to the projected growth.

Zimbabwe has a vast array of untapped natural resources with potential to generate billions of US dollars.

Zimbabwe National Chamber of Commerce deputy president Mr Trust Chikohora has urged businesses to take advantage of bilateral ties between Zimbabwe and South Africa in order to access capital.

"The Bilateral Investment Promotion and Protection Agreement has unlocked opportunities for local industry to access lines of credit from the neighbouring country, because currently there is minimal liquidity flowing in the economy.

"Business needs to play an active role in acquiring lines of credit from such trade arrangements," said Mr Chikohora recently.