By Alois Vinga
FOREIGN Direct Investment (FDI) to Zimbabwe has slightly improved to US$588 million but remains very low when compared to other countries in the region.
A 2025 Post-Budget Analysis Paper prepared by the Zimbabwe Congress of Trade of Unions (ZCTU) says the business environment remains challenging with the cost of doing business relatively high.
“According to UNCTAD, FDI inflows into Zimbabwe increased from US$250 million in 2021 to US$395 million in 2022 and US$588 million in 2023. However, FDI inflows were US$5.2 billion in South Africa; US$2.5 billion in Mozambique; US$2.3 billion in Namibia; US$208 million in Malawi; US$198 million in Botswana; and US$108 million in Zambia,” the analysis said.
The labour organ blamed the country’s huge tax burden as chief among the causes prompting limited revenue flows.
The paper argues that no country can prosper with high taxes (Ireland-in 2015 Ireland grew by 26%). It says high taxation results in high informality and low confidence. We need lesser and lower taxes.
According to the Chamber of Mines of Zimbabwe (CoMZ), the country’s effective tax rate for miners — 69% in 2024 — has already surpassed those of Zambia (60%), the Democratic Republic of the Congo (61%), Ghana (56%), and South Africa (44%), placing a significant strain on Zimbabwean firms’ competitiveness.
The mining sector faces a complex plethora of 157 separate charges, ranging from US$4,000 to US$15,000, imposed by Rural District Councils, government ministries and agencies.
This comes on the back of yet another wave of high taxation measures imposed by Finance Minister Mthuli Ncube in the 2025 National Budget.
“Overall, all these challenges have left the local economy with a huge competitiveness gap implying that Zimbabwean businesses and products are not able to effectively and successfully compete with businesses and products from other countries,” the report said.
The labour organ contends that such an economic structure hurts job creation as well as the quality of employment on offer.
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