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Zimbabwe Investment Development Agency Bill Digest
|NAME:||ZIMBABWE INVESTMENT DEVELOPMENT AGENCY BILL|
|HB NUMBER:||H.B.2, 2019|
|MINISTRY:||MINISTRY OF INDUSTRY AND COMMERCE|
The Zimbabwe Investment Development Agency Bill that was gazette on 5 April 2019 seeks to facilitate for the creation of an investor-friendly environment and promote efficiency in the licensing of investors in Zimbabwe. The bill is part and parcel of the reforms being undertaken by the Government on promoting the ease of doing business as well as to attract the much needed foreign direct investment into the country. In summary, the bill strives to establish the Zimbabwe Investment Development Agency (ZIDA) and its Board, the One Stop Shop Investment Services
Center, obliges investors to respect the country’s laws and to promote good corporate social responsibility within the spheres of their operations. The Bill also seeks to harmonize all investment laws in efforts to reduce bureaucracy and cut the cost of doing business in Zimbabwe and thus repealing the Zimbabwe Investment Authority Act (Chapter 14:30), the Special Economic Zones Act (Chapter 14:34) and the Joint Ventures Act (Chapter 22:22).
Currently, the Zimbabwe Investment Authority (ZIA) is the corporate legal body responsible for promoting and facilitating both foreign direct investment and local investment in Zimbabwe. The Zimbabwe Investment Authority's activities are guided by the Zimbabwe Investment Authority Act [Chapter 14:30], which will be repealed once the ZIDA Bill is promulgated. ZIA was established as a result of a merger of the Export Processing Zones Authority (EPZA) and the Zimbabwe Investment Centre (ZIC) in 2006, with the aim of creating a one stop investment shop for quicker and easier facilitation of investment. The proposed one stop investment centre never saw the light of day even though it was launched in December 2010 because some key departments did not send representatives. This resulted in continued delays regarding to the processing of investor applications.
The ZIDA Bill therefore seeks to harmonise all the laws into one principal Act as measures to ensure that all investment applications and licensing is executed under one roof in line with international practice. Rwanda and Botswana are great examples of countries operating successful one stop investment centres in Africa. ZIDA bill is in line with the Transitional Stabilization Programme which is underpinned by the call to undertake structural reform measures to mitigate the challenge and risks faced by the economy, in particular, the low investment in the country.
3.0 SUMMARY OF THE MAIN CLAUSES OF THE BILL 3.1 Clause 3-4: Establishment and Functions of the Zimbabwe Investment and Development Agency (ZIDA)
Clause 3 of the bill establishes an Agency to be known as ZIDA, which shall be a body corporate capable of suing and being sued in its own name.
Clause 4 outline the core functions of ZIDA, which includes, among others the following;
- to promote, plan and implement investment promotion strategies for the purpose of encouraging investment by domestic and foreign investors;
- to promote the decentralization of investment activities (in line with the spirit of devolution);
- to establish and regulate special economic zones;
- to implement and coordinate investment programs and investment promotion related activities, including promoting Zimbabwe as an attractive investment destination and facilitating entry and implementation of investment project across all sectors of the economy in the country by working on improving the investment climate for domestic and foreign investors;
- to appraise and recommend the approval of Public Private Partnerships; and to monitor the operations of registered investments.
The bill specifies that the Agency shall perform its duties without fair, favour or prejudice and shall conduct all its activities in a clear and open manner to give the fullest effect to the objectives of this Act.
3.2 Clause 5: Creation of the One Stop Investment Services Centre (OSISC)
Clause 5 of the bill establishes the One Stop Investment Services Centre (OSISC), which shall fall under the control and supervision of the Agency. The OSISC shall comprise of representatives or employees from the following entities that play a key role in the licensing, establishment and operationalization of investment, namely; the Zimbabwe Revenue Authority, Immigration Department, Environmental Management Agency, Reserve Bank of Zimbabwe, Companies Registration Office, National Social Security Authority, Zimbabwe Energy Regulatory Authority,
Ministry responsible for mines and minerals, Ministry responsible for local government, Zimbabwe Tourism Authority, Ministry responsible for labour and the State Enterprises Restructuring Agency. The Agency shall have representatives responsible to oversee the general investment issues, public private partnerships and special economic zones at the OSISC.
3.3 Clauses 6-9: Establishment, Composition and Functions of the ZIDA Board
Clauses 6 – 9 provides for the establishment, Composition and Functions of the ZIDA Board and the appointment of the Chief Executive Officer. The ZIDA Board shall oversee and control the operations of the Agency, which may include among others, making recommendation to the President through the Minister on the appointment of the Chief Executive Officer; approving or confirming the appointment or suspension/ discharge of any employees of the Agency; approving
Zimbabwe’s investment promotion strategy; and, approving the Agency’s work programmes and operation as well as its budget.
The composition of the ZIDA Board shall comprise of the following 8 members; three persons chosen from the private sector and five chosen from the public sector at director level and above in line with the Public Entities and Corporate Governance Act. In addition to the 8, the Chief Executive Officer shall be an ex officio member and Secretary to the Board. The Minister shall be responsible for appointing the Board.
3.4 Clause 9: Chief Executive Officer and Staff of Agency
The Chief Executive Officer (CEO) of the Agency shall be appointed by the President after consultation with the Minister. He/She shall oversee the direction and control of the day-to-day running of the Agency supported by the staff of the Agency.
3.5 Clauses 10-18: Investor Guarantees and Non-Discriminatory Treatment
These provisions seek to give investors guarantees and to protect them from non-discriminatory treatment. Firstly, the bill stipulates that all investments must conform to the laws of Zimbabwe. The provisions allows investor to invest in any sector of the Zimbabwean economy serve for the reserved sectors as outlined in the First Schedule of the Indigenisation and Economic Empowerment Act. Clause 15 and 16 ensures that investors are protected from unfair treatment be it denial of justice in the courts of law or nationalization or expropriation of investments or targeted discrimination on manifestly wrongful grounds, such as gender race or religious belief or abusive treatment of investors such as coercion and harassment.
3.6 Clauses 19-20: Investor Obligation
The provisions mandate investors to play a pivotal role in corporate social responsibility in the areas of their operations.
3.7 Clauses 21-29: provisions Common to Investors in and outside Special Economic Zones
The Bill mandates the Agency to keep a register or database of all investment licences, which shall be posted on the website and open for inspection by the members of the public on payment of a prescribed fee. Clause 29 mandates the Agency in consultation with the Minister responsible for Finance to publish investment guidelines highlighting all the general and special incentives that may be applicable to licensed investors and ensure that any of the prescribed incentives are granted to interested and relevant investors.
3.8 Clause 30 – 32: Investments in Special Economic Zones (SEZs)
The establishment of SEZs shall be the prerogative of the Agency, which shall declare, amend, add or abolish any SEZs by way of gazette.
3.9 Clauses 33 – 36: Public Private Partnerships (PPPs)
Clause 33 establishes the Public Private Partnership Unit, replacing the Joint Ventures Unit (established under Section 3 of the Joint Ventures Act) in the Ministry of Finance. The PPPU will generally performs the same functions as that of the JVU. Clause 35 empowers ZIDA to request and examine information relating to PPPs in Zimbabwe and anyone who fails to avail the information in relation to PPPs without just cause, shall be guilty of breaking the law.
3.10 Clauses 38-42: Financial Provisions
Clauses 38 provides for the sources of funds to support the operation of the Agency, which shall consist of any money that may be appropriated for the purpose by Parliament; any loans, donations and grants which the Agency receives; any other money that may accrue to the Agency in the course of its operations or otherwise; and collection of fees in respect of licensing, programmes, publications seminars documents, consultancy services and other services provided by the Agency.
The operations of the Agency shall be guided by the Public Finance Management Act.
3.11 Clauses 43-48: General
The provisions provide for the amendment to Section 100 of the Public Procurement and Disposal of Public Assets Act and repeals the Zimbabwe Investment Authority Act (Chapter 14:30); the Special Economic Zones Act (Chapter 14:34); and the Joint Ventures Act (Chapter 22:22).
The Bill is a very important piece of legislation in Zimbabwe as it seeks to create a conducive environment to promote investment in Zimbabwe and in turn accelerating and deepening the ease and cost of doing business reforms that improve competitiveness. The promulgation of the Bill into law in Zimbabwe will facilitate for the creation of an enabling investment climate in the country which may ultimately result in employment creation and in turn stimulate economic development and poverty eradication in line with the vision to become an Upper Middle Income country by 2030.