The Herald (Harare)

28 July 2014

Zimbabwe: Govt Reviews Joint Venture Guidelines

Victoria Falls — Government is reviewing the existing 2004 policy guidelines on joint ventures in order to give legal force and fine tuning it to avoid uncertainties and delays in the processing of such projects. Finance and Economic Development Minister Patrick Chinamasa told Institute of Chartered Accountants of Zimbabwe business conference last Friday that the objective of the review was to ensure transparency.

"We want to ensure that all joint venture deals are done in a transparent way that will not prejudice either Government of the investment partner. The 2004 guidelines are being reviewed to clarify entry and how foreign investors can partner local companies," Minister Chinamasa said.

"We are encouraging joint ventures in roads rehabilitation, railway, and power and energy sector as well as in the information and technology sector (ICT)," he said.

Minister Chinamasa also said strong local companies can play a pivotal role in linking up with the foreign investors with capital which the country does not have at the moment.

"We continue to enhance the Zimbabwe Investment Authority's "one stop shop" model in order to make it relatively easier for investors to set up shop in the country," said the Minister

Minister Chinamasa said Zimbabwe competes with the rest of the world for international capital and cannot assume to be oblivious of the developments on the international financial and investment markets.

"We should be frank about ourselves when it comes to our investment environment. It's the reason why investment is going to those destinations with good conditions for profitable business.

"Investors coming everyday are citing lack of clarity and consistency of some Government policies as well as the issue of security of investment. However Government is working towards the synchronization of those policies deemed unfriendly," said Minister Chinamasa.

Inward foreign direct investment in Zimbabwe has remained disappointingly low over the years.

The country received $60 million in 2009 and $410 million in 2013 which is an average of 2,7 percent of Gross Domestic Product between the 2009 and 2013.

Meanwhile Government has concluded and finalised the transfer of the banker to Government function from CBZ holdings to the Reserve Bank of Zimbabwe, a senior Government official said.

The transfer is set to create an even playing field for other commercial banks as this has always been a concern in the financial services sector.

Minister Chinamasa said the issue was finalized last week.

He said all Government ministries have opened accounts with the RBZ putting the final nail to the modalities that has been involved in the transfer of the ex-checker account

"The transfer of the function has been finalized and I can confidently say this movement will play a part in creating a level playing field in the banking sector. For orderly functioning of money and capital markets, and development of the same, it is imperative that the function of Banker to Government be restored to the Central Bank," said Minister Chinamasa.

Government is making efforts to strengthen RBZ financial and monetary stability function

"This is an important step in addressing banking sector vulnerabilities and this requires that the Reserve Bank of Zimbabwe's supervisory and Oversight function be strengthened," he said.

Currently RBZ requires capacity building and strengthening to allow it to undertake on-sight supervision and audit of the banks to ascertain capital levels, risk management frameworks, stress and levels of NPLs, among other things.

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