Zimbabwe

Zimbabwe recognizes the need to boost investment, but some of its macroeconomic policies counter a number of government measures meant to attract foreign direct investment (FDI). The country's commitment to the use of a multicurrency monetary regime, dominated by the U.S. dollar in most transactions, continues to restore business confidence in the economy by removing exchange-rate risk associated with the use of domestic currencies. In addition, Zimbabwe's commitment to the October 2014 International Monetary Fund (IMF) Staff-Monitored Program (SMP) acts as a useful anchor for implementation of more fiscally sound policies. Zimbabwe also has a number of incentives designed to attract FDI such as tax breaks for new investment by foreign and domestic companies, and allowing capital expenditures on new factories, machinery, and improvements to be fully tax deductible. The government also waives import taxes and surtaxes on capital equipment. In recent months, the government commissioned a study that recommended a rationalization of regulatory requirements and a reduction in tariffs for utilities in order to reduce the cost of doing business in Zimbabwe.