Zimbabwe

Zimbabwe, a landlocked country in Southern Africa, is bordered by Zambia to the northwest, Mozambique to the east, South Africa to the south, and Botswana to the southwest. Zimbabwe, which the United Kingdom annexed as Southern Rhodesia from the British South Africa Company in 1923, obtained its independence in 1980. It is divided into eight provinces and two cities with provincial status. Zimbabwe's capital is Harare, and the official languages are English, Shona, and Ndebele.

Since the Zimbabwe dollar (ZWD) was demonetarised in April 2009, the main currency used (amongst a basket of 19 international currencies) is the United States dollar (USD). However, in order to deal with USD bank balances, which are not supported by real bank notes, the Reserve Bank of Zimbabwe (RBZ), on 22 February 2019, issued Statutory Instrument number 33 of 2019, introducing a new local currency called the RTGS dollar (RTGS stands for Real Time Gross Settlement - a system for transferring funds electronically). In the Statutory Instrument, the RBZ defined the RTGS dollar as "means any funds held as bank deposits under the Real Time Gross Settlement system established in terms of the National Payment Systems Act [Chapter 24:23]". The Statutory Instrument further states that "that the Reserve Bank has, with effect from the effective date, issued electronic currency called the RTGS dollar". All local trading and preparation of financial statements must be in RTGS dollars. Taxes must be paid in RTGS dollars except in cases where the revenues earned are in another currency.

Zimbabwe has had a troubled investment environment in the recent past. This was largely due to an unstable political situation and the land reform policy that the government embarked on. The land reform programme, in brief, entailed the grabbing of white-owned land to resettle landless black people. The government's position has been that the reform programme was agreed on with the former colonisers and had just been pending implementation.

The political situation has relatively stabilised following the ruling party ousting the former President and replacing him with a former Deputy President. The ‘new’ government has been trying to attract foreign investment with limited success, whilst they are attempting to improve the country's investment policy (ease of doing business).

Zimbabwe opposes foreign domination of certain sectors of its economy. In this regard, the investment legislation, on the one hand, prescribes local participation requirements in most enterprises and, on the other hand, provides for limited investment protection and investment incentives. The indigenisation laws that used to require 51% ownership of all foreign-owned companies have been abolished.

Various tax incentives have been introduced in an attempt to grow foreign direct investment (FDI). The main efforts in this regard has been the introduction of Special Economic Zone (SEZ) legislation. Some SEZs have been announced, and there are numerous applications in the pipeline. No other significant developments have occurred.

PwC Zimbabwe supports clients with the local knowledge and skills of its people and with access to a broad range of other professionals across the PwC global network of firms. This is especially true regarding the close relationship that the Zimbabwe office has with other firms across Africa.