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Mnangagwa’s $3bn FDI yet to be earned

President Emmerson Mnangagwa’s claims that Zimbabwe has earned foreign direct investment (FDI) commitments totaling $3 billion over the past 100 days, must be properly put into perspective, analysts have said.

President Emmerson Mnangagwa
President Emmerson Mnangagwa

Financial research firm Equity Axis said in terms of actual numbers, Zimbabwe received FDI of just half a billion dollars in 2017 which was an improvement on the 2016 comparable period but a far cry from the regional averages.

“For starters a capital commitment does not equate to actual flows but potential flows and a case for the yesteryear ‘mega deals’ with a similar value are worth noting,” the research firm said in a commentary.

“What potential investors are doing is to position themselves and acquaint to opportunities which will only materialise once fundamentals become more favourable. Although a significant share of the local assets are undervalued the risk premium associated with a disputed election has significant downside which may undo the gains from grabbing under-priced assets.” DailyNews