2013 Investment Climate Statement - Zimbabwe

2013 Investment Climate Statement
Bureau of Economic and Business Affairs
February 2013

Openness to, and Restrictions Upon, Foreign Investment

Zimbabwe's economy grew in real terms by 9.3 percent in 2011 and is projected to grow by 4.3 percent in 2012 according to the government's estimates. The government expects the economy to grow by 5.0 percent in 2013. Government corruption and mismanagement remain important concerns, however. Government policies have eroded the rule of law and undermined the security of property rights. An uncertain domestic political environment and the expectation of elections in 2013 tend to magnify risks for investors. In the absence of comprehensive reforms, Zimbabwe's investment climate will remain risky. In order to take advantage of the business opportunities that naturally arise through Zimbabwe's economic recovery, it is essential for investors to develop the contacts and information that will allow them to manage risk. The government estimated that Zimbabwe's rate of inflation in 2013 will be between 4.5 and 5.0 percent. Under Zimbabwe's multi-currency monetary regime, in which most business is conducted in U.S. dollars, changes in the price level are primarily related to the exchange rate between the South African rand and the U.S. dollar because Zimbabwe imports a significant proportion of its products from South Africa.

Zimbabwe ranks poorly in global comparisons of economic competitiveness and corruption.




TI Corruption Index


163 0f 176

Heritage Economic Freedom


178 of 179

World Bank Doing Business


172 of 185

MCC Gov’t Effectiveness


-0.53 (16%)

MCC Rule of Law


-0.84 (4%)

MCC Control of Corruption


-0.43 (13%)

MCC Fiscal Policy


-1.5 (74%)

MCC Trade Policy


50.4 (2%)

MCC Regulatory Quality


-1.14 (7%)

MCC Business Start Up


0.749 (14%)

MCC Land Rights Access


0.43 (16%)

MCC Natural Resource Mgmt.


99.7 (85%)

Government policy papers recognize the need for foreign direct investment to improve the country's competitiveness. This includes encouraging public-private partnerships in order to enhance technological development. Official statements also emphasize the need to improve the investment climate by restoring the rule of law and sanctity of contracts. But the statements and actions of certain senior government officials are often inconsistent with this sentiment, undermining investor confidence. Despite extremely difficult economic conditions over the past decade, a few U.S. companies maintained subsidiaries in Zimbabwe, largely holdovers from better years a decade and more ago. Many others sell their products through certified dealers.

The government's priority sectors for foreign investment are manufacturing, mining, and infrastructure development. In 2008, the government introduced the Indigenization Act, which requires that "indigenous Zimbabweans" own at least 51 percent of all enterprises. In March 2010, the government issued regulations to implement the Indigenization Act. These regulations created new uncertainty further harming the investment climate. The government then decided to revise the regulations and established committees that will propose sector-specific thresholds for indigenous ownership of businesses.

The government rejected most of the recommendations made by the committees, with the minister in charge of indigenization insisting on the 51-percent indigenization threshold in all sectors. Others in government insist that the minister’s decisions must also receive the concurrence of each sectors’ respective line minister. However, implementation of the Act has been slow because funding for indigenization is not readily available. In order to improve the investment climate, the government proposes to exempt all new foreign investment from immediately complying with the 51 percent local ownership requirement. It also proposes to amend the Zimbabwe Investment Act and re-align it with the indigenization regulations as a way of balancing the imperatives of empowerment with the need to attract foreign direct investment. In addition, the government is still working on amendments to the Mines and Minerals Act as well as the Precious Stones Trade Act in order to improve transparency within the sector.

The government reserves several sectors for local investors. Under current laws, foreign investors wishing to participate in these sectors may only do so by entering into joint-venture arrangements with local partners. Foreign investors may not own more than 35 percent of the operation. These rules apply to the following industries:


  • Primary production of food and cash crops
  • Primary horticulture
  • Game, wildlife ranching, and livestock
  • Forestry
  • Fishing and fish farming
  • Poultry farming
  • Grain milling
  • Sugar refining


  • Road haulage
  • Passenger bus, taxi, and car hire services
  • Tourist transportation
  • Rail operations

Retail and wholesale trade, including distribution

  • Barber shops, hairdressing, and beauty salons
  • Commercial photography
  • Employment agencies
  • Estate agencies
  • Valet services
  • Manufacturing, marketing, and distribution of armaments
  • Water provision for domestic and industrial purposes
  • Bakery and confectionary
  • Tobacco packaging and grading post auction
  • Cigarette manufacturing

Foreign investors wishing to start a new project in Zimbabwe must first register with, and obtain approval from the Zimbabwe Investment Authority (ZIA), which then issues an investment certificate.

The ZIA reports that approval of investment applications now takes five days, down from the 49 days it took in 2010, thanks to implementation of a "one-stop shop" concept to coordinate the work of officials from the ZIA and other government agencies.

All private firms are required to incorporate and register with the Registrar of Companies within the framework of their investment certificate or exchange-control approval. Foreign investment in existing companies requires approval from the Reserve Bank of Zimbabwe (RBZ), as the central bank is known. Applications are submitted to the RBZ's Exchange Control Department through the investor's commercial bank or merchant bank or other authorized foreign-exchange dealer. Foreign investors with valid investment certificates may acquire real estate.

In the mid-1990s, the government identified privatization of state-owned enterprises (SOEs) as a priority, but only two have been successfully privatized since then. Although the government set up a ministry responsible for state-owned enterprises, this ministry still lacks the authority to set and implement privatization policy. The ministry also reports that inter-SOE debts are now close to US$1 billion and these pose problems to the privatization plans as they further weaken the entities’ balance sheets. In addition, lack of political will and the enterprises' operational inefficiencies make it unlikely that privatization will accelerate in the near term.

As Zimbabwe's relations with the U.S. and European nations deteriorated over the past decade, the government began to encourage economic ties with Asian countries, particularly China. Under this "Look East" policy, some Asian investors have been offered access to reserved sectors, sometimes at the expense of local or established foreign investors. Despite the official emphasis placed on these ties and a few high-profile project announcements, Asian investment is still a small fraction of existing investment from South Africa and the United Kingdom.

Conversion and Transfer Policies

Until the end of 2008, Zimbabwe's exchange-rate policies made it difficult for firms to obtain foreign currency, and this in turn resulted in shortages of fuel, electric power, and other imported goods. Other consequences included defaults on public- and private-sector debt and a sharp decline in industrial, agricultural, and mining operations. In 2009, the government lifted exchange controls and withdrew the Zimbabwe dollar from circulation. Foreign currencies are now used for all transactions in Zimbabwe, with most business being conducted in U.S. dollars. Zimbabwe's export performance is recovering slowly, and the government's arrears in payment on its over US$10 billion in external debt block access to multilateral financing. These conditions severely constrain external financing for the economy. The RBZ has not restored foreign-currency accounts it confiscated from banks' depositors prior to official dollarization in 2009. In line with recommendations from the Southern African Development Community (SADC) and the IMF, the government has revised the Foreign Exchange Control Act, which regulated currency conversions and transfers before the withdrawal of the Zimbabwe dollar. With these changes, exporters now retain 100 percent of their foreign-currency receipts for their own use and most current account transactions have been liberalized.

Expropriation and Compensation

Despite previous provisions in Zimbabwe's constitution that prohibit the acquisition of private property without compensation, in 2000 the government sanctioned uncompensated seizures of privately owned agricultural land. Many of the farms seized were subsequently transferred to government officials and other regime supporters. The government in April 2000 amended the constitution to authorize the compulsory acquisition of privately owned commercial farms with compensation limited to the improvements made on the land. In September 2005, the government amended the constitution again to transfer ownership of all expropriated land to the government. Since the passage of this amendment, top government officials, supporters of President Mugabe's ZANU-PF party and members of the security forces have continued to disrupt production on commercial farms, including those owned by foreign investors and covered by bilateral investment agreements. Similarly, government officials have sought to impose politically-connected individuals as indigenous partners on privately and foreign-owned wildlife conservancies.

In 2006, the government began to issue 99-year leases for land seized from commercial farms. These leases, however, are not readily transferable. The government retains the right to withdraw the lease at any time for any reason.

The government's program to seize commercial farms without compensating the titleholders, who have no recourse to the courts, has raised serious questions about respect for property rights and the rule of law in Zimbabwe. Accordingly, Zimbabwe was ranked 128 out of 185 countries considered with respect to the country's ability to protect investment under the World Bank's 2013 "Doing Business" report.

President Mugabe and other politicians have in the past threatened to target the mining and manufacturing sectors for similar forced indigenization. In 2008, the government amended the Mines and Minerals Act, outlining indigenization requirements for mining. For strategic energy minerals (coal, methane, uranium), the legislation would require mining companies engaged in extraction or exploitation to transfer ownership to the state of 51 percent of the shares; 25 percent would be without compensation. For precious metals and precious stones, 25 percent of the shares must be transferred to the state without compensation and a further 26 percent is required to be owned by the state or by indigenous Zimbabweans. The government is still deliberating amendments to the Mines and Minerals Act, which may include a “use it or lose it” provision for unexploited mining concessions, and new “indigenous” ownership requirements in the sector in line with the Indigenization Act. In addition, the government intends to amend the Precious Stones Trade Act to focus on diamonds in order to enforce, among other things, the 100 percent government ownership of diamonds, immediate separation of diamond mining and marketing activities and the promotion of value addition through the prohibition of exports of unpolished diamonds.

Dispute Settlement

Zimbabwe has acceded to the 1965 convention on the settlement of investment disputes between states and nationals of other states and to the 1958 New York convention on the recognition and enforcement of foreign arbitral awards.

In the event of an investment dispute, the Government of Zimbabwe agrees, in theory, to submit the matter for settlement by arbitration according to the rules and procedures promulgated by the United Nations Commission on International Trade Law once the investor has exhausted the administrative and judicial remedies available locally. On the other hand, Constitutional Amendment 17, enacted in 2005, removed the right of landowners whose land has been acquired by the government to challenge the acquisition in court.

A group of Dutch farmers whose farms were seized under the land reform program took their case to the International Centre for the Settlement of Investment Disputes (ICSID) in April 2005, demanding that Zimbabwe honor its investment agreement with the Netherlands. The case was heard by a tribunal in Paris in November 2007, and the tribunal issued a verdict favorable to the farmers. Zimbabwe's government acknowledged that the farmers had been deprived of their land without payment of compensation but disputed the amount the farmers claimed in damages.

In a related case, a three-judge panel of the SADC Tribunal in Windhoek, Namibia, ruled in 2008 that Zimbabwe's violent land reform exercise discriminated against a group of white farmers who filed an application challenging the seizure of their farms. The government has refused to recognize the ruling and in September 2009 it said Zimbabwe had withdrawn from the jurisdiction of the SADC Tribunal. This appeared to be a bid to stop the effect of adverse judgments against it by the Windhoek-based court. The government argued that the protocol establishing the Tribunal had not been ratified by the required two-thirds majority of the total membership of SADC. This position was adopted by SADC at a Summit meeting in August 2010 and the Tribunal was dissolved in early 2012. In 2010, a South African High Court attached a Zimbabwe government-owned property in Cape Town to satisfy the Tribunal’s order, but the Zimbabwean government appealed to the South African Supreme Court. On September 20, 2012, however, the South African Supreme Court ruled in favor of the Zimbabwean farmer as compensation for the seizure of his farm.

Government efforts to influence, co-opt, and intimidate the judiciary since the late 1990s have raised serious concerns about investors receiving a fair hearing in local courts. In addition, the government and ruling elite have ignored numerous adverse judgments, and senior officials have reiterated publicly that court orders that are not politically acceptable to the ZANU-PF party of Robert Mugabe will not be honored. Administration of justice in those commercial cases that lack political overtones is still generally impartial. As government revenue has declined, however, court resources have dwindled and dockets have become backlogged.

Performance Requirements and Incentives

Several tax breaks are available for new investment by foreign and domestic companies. Capital expenditures on new factories, machinery, and improvements are fully deductible and the government waives import taxes and surtaxes on capital equipment. The ZIA maintains the full details on these incentives.

There are no general performance requirements for businesses located outside Export Processing Zones. Government policy, however, encourages investment in enterprises that contribute to rural development, job creation, exports, the addition of domestic value to primary products, use of local materials, and the transfer of appropriate technologies.

There are no discriminatory import or export policies affecting foreign firms, although the government's approval criteria are heavily skewed toward export-oriented projects. Import duties and related taxes range as high as 110 percent. Export Processing Zone designated companies must export at least 80 percent of output.

Government participation is required for new investments in strategic industries such as energy, public water provision, and railways. The terms of government participation are determined on a case-by-case basis during license approval. The few foreign investors (for example from China and Iran) in reserved strategic industries have either purchased existing companies or have supplied equipment and spares on credit.

Foreign investors are expected to make maximum use of Zimbabwean management and technical personnel, and any investment proposal that involves the employment of foreigners must present a strong case for doing so in order to obtain work and residence permits. Normally, the maximum contract period for a foreigner is three years, but this can be extended to five years for individuals with highly specialized skills.

Right to Private Ownership and Establishment

Although Zimbabwean law guarantees the right to private ownership, this right is increasingly not respected in practice. As noted above, the government has in recent years seized thousands of private farms and conservancies, including ones belonging to Americans and other foreign investors, without due process or compensation. Most of these property owners held Zimbabwe Investment Authority investment certificates and purchased their land after independence in 1980. Despite repeated U.S. protests, the government has not addressed the expropriation of property belonging to U.S. citizens.

Protection of Property Rights

Prior to 2009, the government's demonstrated desire to expand its control of the economy put many investments, particularly in real property, at risk. The government's 2005 Operation Restore Order resulted in more than 700,000 persons losing their homes, their livelihoods, or both, according to United Nations estimates. Many of these properties had proper titles and licenses. Although Operation Restore Order officially ended in 2005, the government continued to evict smaller numbers of people from their homes and businesses, primarily in and around Harare, in 2006, 2007, 2010 and 2012. In addition to the thousands of agricultural properties seized under land reform during the past ten years, in late 2005 the government for the first time authorized the seizure of non-agricultural land for the purpose of residential construction in a Harare suburb.

Since independence, Zimbabwe has applied international patent and trademark conventions. It is a member of the World Intellectual Property Organization. Generally, the government seeks to honor intellectual property ownership and rights, although there are serious doubts about its ability to enforce these obligations due to a lack of expertise and manpower. Pirating of videos and computer software is common.

The judiciary generally upholds the sanctity of contracts between private companies. In the case of contracts involving the government or politically influential individuals, however, judgments sometimes appear biased.

Transparency of the Regulatory System

The government's officially stated policy is to encourage competition within the private sector but the bureaucracy within regulatory agencies lacks transparency, and corruption within the regulatory system is increasingly worrisome.

The adoption of the multi-currency system in 2009 stabilized prices and removed the need for price controls. Consequently, the government no longer controls prices of goods and services. Nevertheless, the National Incomes and Prices Commission (NIPC) still exists to monitor price developments at home relative to those in the region. The NIPC raised concerns over the decision by private schools to raise fees for 2012 without clearance from the government.

Import taxes are introduced arbitrarily to support certain inefficient producers who continue to lobby for protection against more competitive imports. In late 2012, the Ministry of Finance announced a 25 percent surtax on selected imported products including soaps, meat products, beverages, dairy products and cooking oil starting January 1, 2013 as well as other import taxes on beer, cigarettes, and chickens brought in from outside the Southern African Development Community (SADC) and the Common Market for Eastern and Southern African regions (COMESA).

Efficient Capital Markets and Portfolio Investment

Zimbabwe's stock market currently has 70 publicly-listed companies, but just 14 of them account for over 80 percent of total market capitalization, which stood at US$4.2 billion at end of November 2012. In September 1996, the government opened the stock and money markets to limited foreign portfolio investment. Since then, a maximum of 40 percent of any locally-listed company can be foreign-owned with any single investor allowed to acquire up to 10 percent of the outstanding shares. As the 40 percent threshold on collective foreign participation is lower than the 49 percent required under the Indigenization Act, the government intends to amend the 1996 provisions to align them with the 49 percent threshold under the new Act.

There is a 1.48-percent withholding tax on the sale of marketable securities, while the tax on purchasing is pegged at 1.73 percent. Totaling 3.21 percent, the rates are comparable with the average of 3.5 percent for the region. As a way of raising funds for the state, the government mandated that insurance companies and pension funds invest between 25 and 35 percent of their portfolios in prescribed government bonds. Zimbabwe's hyperinflation, which came to an end with the 2009 dollarization, wiped out the value of domestic debt instruments, and the government has only recently started re-issuing Treasury Bills.

Zimbabwe's severe economic problems drove foreign direct investment (FDI) inflows from US$103 million in 2005 to US$40 million in 2006, according to the World Investment Report compiled by the United Nations Conference on Trade and Development (UNCTAD). Net FDI rose from US$44 million in 2008 to US$105 million in 2009. It rose further to US$123 million and US$373 million in 2010 and 2011 respectively owing to the positive effects of some of the reforms implemented by the coalition government.

Three major international commercial banks and a number of regional and domestic banks operate in Zimbabwe, with a total of over 200 branches. Following the well-publicized failure of a number of financial institutions in 2003, primarily due to fraud and inept management, RZB regulations were tightened. Nonetheless, financial institutions have an uncertain future due to the reluctance of citizens to trust their deposits with banks and an increase in bad loans on bank balance sheets. In fact, during 2012, two local institutions surrendered their banking licenses although one re-emerged under a different name. A third bank was placed under curatorship and still operated under judicial management at the end of 2012. In Zimbabwe's dollarized economy and due to the effects of hyperinflation, the RBZ does not have the resources to act as lender of last resort for the banking system. Total bank deposits rose from just US$300 million in February 2009 to just over US$3 billion by September 2011. On average, banks in Zimbabwe lend around 62 percent of their deposits. This is significantly lower than the regional average of 75 percent, mainly due to banks' concerns about volatility of deposits and the absence of an interbank lending system.

Competition from State-Owned Enterprises (SOEs)

Zimbabwe has 76 SOEs. Many SOEs support vital infrastructure - energy and transportation, for example. As a result, competition within the sectors where SOEs operate tends to be limited. However, the GOZ is now inviting private investors to participate in infrastructural projects through public-private partnerships. Most SOEs have performed poorly in recent years due to mismanagement, lack of maintenance, and inadequate investment, thereby imposing significant costs on the rest of the economy. Nevertheless, while many still produced losses, many SOEs made significant improvements in performance during 2011 even though they still face a number of challenges that include persistent power outages, a lack of liquidity and access to credit and a debt overhang. Corruption is endemic among SOEs with senior management (primarily retired army personnel) appointed by politicians and payrolls bloated with redundant employees. Further, almost all SOEs are under-capitalized because the government lacks financial resources. Most SOEs are saddled with debts accumulated through unsustainable, GOZ-imposed pricing models designed to benefit consumers. The state-owned Grain Marketing Board, for example, has for years purchased grain locally at above-market prices and sold it at a significant loss.

Until the advent of the coalition government in February 2009, most SOEs operated without a board of directors. Most do not produce financial accounts on time. Of the 76 SOEs, 46 have not submitted audited financial statements or held annual general meetings over the past six years as required by law. Poor management and the GOZ’s failure to privatize made Zimbabwe’s SOEs dependent on subsidies. According to the Ministry of State Enterprises and Parastatals, the slow pace of restructuring has been a result of their managements’ fear of change.

Corporate Social Responsibility

According to an industrial advocacy group, the Confederation of Zimbabwe Industries, there is a general awareness of corporate social responsibility among producers. The organization has developed its own charter according to OECD guidelines, highlighting good corporate governance and ethical behavior. Firms that demonstrate corporate social responsibility do not automatically garner favorable treatment from consumers, employees and government. With regard to indigenization, foreign companies do not receive formal credit for conducting community-service activities.

Political Violence

Political parties and civil-society groups that oppose the ZANU-PF and President Mugabe routinely encounter state-sponsored intimidation and repression from government security forces and ZANU-PF-linked activists. This environment persisted even after the main opposition party, the Movement for Democratic Change (MDC), joined ZANU-PF in a transitional unity government in February 2009. Individuals and companies out of favor with the ZANU-PF routinely suffer harassment and bureaucratic obstacles in their business dealings. On occasion, domestic businesspeople out of favor with the government have been incarcerated for allegedly engaging in illegal business practices.

Despite widespread dissatisfaction with government policy, there have been no large-scale demonstrations. Sporadic cases of looting by soldiers and small-scale demonstrations have occurred in recent years. With national elections expected in 2013, many expect the government security sector and ZANU-PF-linked activists to again engage in political violence against MDC supporters as elections draw near.


There is widespread corruption in government. Implementation of the government's ongoing redistribution of expropriated commercial farms has substantially favored the ZANU-PF elite and lacks transparency.

In 2005, the government enacted an Anti-Corruption Act that established a government-appointed Anti-Corruption Commission to investigate corruption; however, it includes no members from civil society or the private sector. The government prosecutes individuals selectively, focusing on those who have fallen out of favor with the ZANU-PF and ignoring transgressions by members of the favored elite.

The coalition government formed in February 2009 enhanced the institutional capacity of the Anti-Corruption Commission, with members appointed from civil society and the private sector. Moreover, the government has improved accountability in the use of state resources through the introduction of the Public Finance Management Act in March 2010. In spite of this, corruption is still endemic especially within the diamond sector where production and export figures are normally unreliable. In this respect, the government has introduced a Diamond Policy that focuses on ensuring the 100 percent government ownership of diamonds and the involvement of the Zimbabwe Revenue Authority in the entire value chain of diamonds. While the government has also embraced the World Bank’s Extractive Industries Transparency Initiative (EITI) principle in order to strengthen accountability, good governance, and transparency in the mining sector, it has yet to launch an EITI program in Zimbabwe.

Bilateral Investment Agreements

The U.S. has no bilateral investment or trade treaty with Zimbabwe. Zimbabwe has investment treaties with 17 countries; only seven of these treaties (with the Netherlands, Denmark, Germany, South Korea, South Africa, Botswana, and Switzerland) have been ratified. Three other investment agreements with Russia, India, and Iran are awaiting ratification before they become effective. In spite of these agreements, the government has failed to protect investments undertaken by nationals from these countries, particularly with regard to land. In 2009, for example, a farm belonging to a German national was seized by an army officer and the government did not intervene, despite its assurance that Zimbabwe would honor all obligations and commitments to international investors.

OPIC and Other Investment Insurance Programs

The U.S. Government and Zimbabwe concluded an OPIC agreement in April 1999. Zimbabwe acceded to the World Bank's Multilateral Investment Guarantee Agency in September 1989. Support from the Export-Import Bank of the U.S. is not available in Zimbabwe. Many other major donor countries have also suspended their trade finance and export promotion programs, as well as investment insurance, due largely to Zimbabwe's mounting multilateral and bilateral debt arrears and deteriorating investment climate.


Zimbabwe's interconnected economic and political crises prompted many of the country's most skilled and well educated citizens to emigrate, leading to widespread labor shortages for managerial and technical jobs. At the same time, the decade-long severe contraction of the economy caused formal sector employment to drop significantly. The Zimbabwe Statistical Agency (Zimstats) has only just begun to compile meaningful employment statistics since the end of the 1990s. According to these figures, Zimbabwe’s non-farm employment fell from 912,000 in March 2000, to 750,000 by March 2008. Since 2008, however, total formal sector employment rose to stand at just over 1,193,000 by end of 2010, thanks to the stable macroeconomic environment achieved through dollarization in 2009. By December 2011 (the latest date for which data are available), non-farm employment stood at 1,127,900.

The country's HIV/AIDS epidemic is also taking a heavy toll on the workforce. A recent survey reports that 15.2 percent of adults were infected with HIV during the 2010 to 2011 period.

The government is a signatory to International Labor Organization (ILO) conventions protecting worker rights, although the world body has designated Zimbabwe as a "notorious country" for its continued attempts to limit workers' rights to organize and hold labor union meetings. The 1985 Labor Relations Act set strict standards for occupational health and safety, but enforcement is fairly lax and inconsistent across the industrial sectors. In November 2008 an ILO-appointed commission found Zimbabwe in breach of ILO Conventions 87 and 98. The new Minister of Labor promised to implement all the ILO’s recommendations relating to freedom of association and protection of the right to organize as well as the right to collective bargaining.

Collective bargaining takes place through a National Employment Council (NEC) in each industry, comprising representatives from labor, business, and government. In addition, the Zimbabwe Congress of Trade Unions (ZCTU), the country's umbrella labor organization, advocates for workers' rights.

A Tripartite Negotiating Forum (TNF) was established in 2001 for labor, business, and government to tackle macro-social issues. These talks have been fitful and unproductive since their inception. A continuing impasse for the TNF is disagreement between business and labor over indexing wages to a measure of poverty. But the two sides have not agreed on a suitable poverty benchmark.

The government continues to harass labor unions and their leaders. In December 2012, the police arrested two ZCTU officials for allegedly holding an unsanctioned protest march to celebrate Human Rights Day in Zimbabwe’s second city of Bulawayo, even though this had been obtained from the police beforehand. Under Zimbabwe labor law, the government can intervene in ZCTU's internal affairs if it determines that the leadership is not acting in the workers' interest. To undercut the strength of ZCTU, the government created an alternative umbrella organization, the Zimbabwe Federation of Trade Unions (ZFTU), after ZANU-PF fared poorly in the 2000 parliamentary elections. Outside of the government, however, the ZFTU is not regarded as a legitimate labor organization. The ZCTU remains the voice of labor in Zimbabwe and the country's official and internationally recognized labor organization.

Foreign Trade Zones/Free Trade Zones

The government promulgated legislation creating Export Processing Zones (EPZs) in 1996. Zimbabwe now has approximately 183 EPZ-designated companies. Benefits include a five-year tax holiday, duty-free importation of raw materials and capital equipment for use in the EPZ, and no tax liability from capital gains arising from the sale of property forming part of the investment in EPZs. Since January 2004 the government has generally required that foreign capital comprise a majority of the investment. The requirement on EPZ-designated companies to export at least 80 percent of output has constrained foreign investment in the zones. The merger between the Zimbabwe Investment Centre and the Zimbabwe Export Processing Zones Authority, which began in 2006, has been completed and the new institution—the Zimbabwe Investment Authority—now serves as a one-stop shop for both local and foreign investors.

Foreign Direct Investment Statistics

Net Direct Investment Flows 2000-2011 (US$ million)

























Source: UNCTAD, World Investment Report 2012