New Investment Policy and Promotion Strategy in Draft form
The Ministry of Commerce, Industry, Labour and Immigration has drafted a new Investment Policy and Promotion Strategy aiming at increasing foreign investment in the country.
Permanent Secretary, Riley Mesepitu confirmed this to SIBC News in an interview.
Mr. Mesepitu said the new investment policy will replace the current Open Sky Policy, which is now 20 years old and needs to be reviewed.
The Open Sky Policy was created with a focus on recovering from the ethnic tension in the early 2000s.
“During the ethnic tension the ministry was forced to take drastic actions in flexing its investment regulations such as removal of the foreign investment board and replacing it with the foreign investment director which has the power to approve foreign investment into the country,” Mr Mespitu said.
Proposed revisions to the previous ‘Open Sky Policy’ are said to effectively regulate investment activities and implement restrictions on the type of investors which enter the local economy.
Mr. Mespitu explained the revised policy will allow reforms to be introduced, international practices to be included, increased accommodation of the government’s policy redirection and the establishment of an Investment Promotion Authority.
One of the major proposals under the revised policy is the special economic zones to be created in the country. This is a special economic zone concept that will see certain approved areas have business and trade laws that are different from the rest.
Once the special economic zone policy is approved, it will become a new bill which will be the first of its kind in the country.
“The idea of the special economic zone has risen many years ago, the concept once passed through the proper process might face challenges in its implementation stage as the introduction of incentives might not go down well with our revenue collectors, but we are working together with all relevant authorities,” Mr. Mesipitu said.
Over the years, the country has struggled to attract big investors and the special economic zone once it is implemented will attract big business due to its investment incentives.
Mr. Mesipitu said the country has a high business operating cost on electricity, communication and fuel including the country’s geographical layout is also costly for business.
“If the business operating cost is not reduced the country will continue to have a hard time attracting investors despite the government’s incentives to increase foreign investment into the country, the special economic zone allows us to lower the business operating cost in approved areas around the country,” he said.
The draft policy will be submitted to Cabinet soon for approval.
By Sharon Nanau