From : Allafrica.com
By Bright Madera
19 April 2012
VICTORIA Falls will assume offshore financial zone status in the second half of the year to harness foreign direct investment in the country. An offshore financial zone is a jurisdiction that provides financial services to non-residents on a scale that is commensurate with the size and the financing of its domestic economy.
Finance Minister Tendai Biti recently told journalists that operational modalities, drafting of legal and the administrative framework were in progress.
“We are finalising a number of pieces of legislation, worked out in the first quarter of the year and they would be implemented in the second half, including Victoria Falls becoming an offshore financial zone,” he said.
He added the Banking Act, Income Tax Act, RBZ Assumption Bill and the amendments to the Securities Commission Act would also be implemented in the second half of the year.
It is usually a small, low-tax jurisdiction specialising in providing corporate and commercial services to non-resident offshore companies, and for the investment of offshore funds.
There are four main types of IFC’s — primary, funding, booking and collection centres. They are distinguished by their operations in terms of the origin of the clientele they deal with.
Primary financial centres are hubs of international banking and finance in their market area and offer a wide variety of financial services.
In his 2012 National Budget Minister Biti announced the concept of cluster-driven growth strategy in which provinces will be developed according to their respective resource endowments.
Once the IFC is set up, it would become the growth nucleus of the Matabeleland provinces, transforming the region into the financial capital of the country.
Zimbabwe has over the last decade been receiving adverse publicity, which has been compounded by the enactment of the repressive Zimbabwe Democracy Economic Recovery Act 2001, which has aggravated the deterioration in the country’s macroeconomic conditions.
The Government has been working on a number of strategies to improve FDI, including focusing on improving of key indicators where Zimbabwe had slipped.
These include starting a business, dealing with permits, registration, credit availability and protection of investment.
Meanwhile, the One-Stop-Shop Investment Centre launched in 2010 will be strengthened through the secondment of officials from line ministries to the Zimbabwe Investment Authority to reduce bureaucracies on the key indicators.
This will result in the processing of all investment applications and licensing to within five working days.
The World Economic Report 2011 shows that Zimbabwe recorded FDI of US$105 million, compared with Angola’s US$9 billion for the same period.
These figures are in the context of a US$55 billion FDI inflow for the African continent, reflecting the poor performance of the country in attracting new investment.
During the same period, Zimbabwe’s outward FDI flows amounted to US$15 million.