Mauritius’ offshore financial centre status makes it Zim’s top FDI source

Mauritius’ offshore financial centre status makes it Zim’s top FDI source
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The British Virgin Islands offers flexibility for investment managers to set up their fund vehicles.

MAURITIUS and the British Virgin Islands remain an excellent route for structuring foreign investments into Zimbabwe with the two making up the top 10 of source countries for investment since 2009 while Nigeria makes the list largely on the back of Dangote’s proposed investment.

According to the latest statistics (2009-2015) Mauritius is the largest source of investment flows accounting for US$4,56 billion while the British Virgin Islands is on sixth at U$760,54 million.

Mauritius combines the traditional advantages of being an offshore financial center (no capital gains tax, no withholding tax, no capital duty on issued capital, confidentiality of company information, exchange liberalisation and free repatriation of profits and capital) with the distinct advantages of being a treaty ‐based jurisdiction with a substantial network of treaties and DTAAs. The British Virgin Islands offers flexibility for investment managers to set up their fund vehicles.

China is the second largest source country at US$2,81 billion with the most significant amount of US$1,09 billion coming through in 2011. Last year, the Zimbabwe Investment Authority approved projects worth US$188,5 million from the country mostly destined for the manufacturing sector (US$74,54 million), mining US$57,59 million and construction US$42,38 million.

Other top source countries include South Africa at US$1,54 billion, USA US$1,6 billion and Nigeria US$1,45 billion. The bulk of the Nigerian investment were approved in 2015 for the Dangote group which is expected in the country tomorrow. According to the figures, US$400 million will be invested in the energy sector, manufacturing US$500 million and US$300 million in the mining sector.

Total investment approved amounted to US$3,16 billion from 170 projects. The projects are forecast to create 13 377 jobs in about US$30 million in export earnings. However these are just investment projects approved and not implemented. Figures from UNCTAD on actual investment flows show that $2.42 billion has been invested into the country since dollarisation.

Economic Planning and Investment Promotion secretary Dedire Sibanda said the ministry was in the process of revamping ZIA’s reporting structure in order to deal with the anomaly.
“The new structure will show sector by sector numbers in terms of investment type, employment provided and the number of investors. It will also show the impact of those investments and differentiate between approvals and implementation.”

The structure will copy from the Rwanda model which collates the number of investors involved and the expertise required for their investment.

“So many investors in various sectors sign MoUs with clear timelines but unfortunately some of these things are not captured while there has also been a missing mechanism to track the projects which will be implemented.” He said as part of the revamp the ministry will hold quarterly investment meetings and produce an annual investment report. FinX

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