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 has 16 official languages official languages, the main ones being English, Shona, and Ndebele.

Zimbabwe's official currency is called the the Zimbabwe dollar (ZWL) but use of certain foreign currencies, mainly the United States Dollar (USD), The Botswana Pula (BP) and the South African Rand (ZAR) to settle local obligations is permitted. Exporters can to retain and utilise export earnings in order to import goods and services but a 30-day time limit has been imposed to use the funds, failure of which results in the balance being converted to ZWL at the ruling weighted auction rate (foreign currency is auctioned once a week by the Central Bank) together with funds that are sold at auction by the government of Zimbabwe. Businesses are required to display prices of their goods and services in both ZWL and United States Dollars (USD). Payment of various taxes (e.g. VAT, PAYE, and CIT) must be paid in foreign currency on earnings that are made in foreign currency. In addition, various statutory levies are denominated in US dollars.

Zimbabwe has had a troubled investment environment in the recent past, largely due to an unstable political situation and the rather chaotic land reform programme that the government embarked on. The land reform programme, in brief, entailed the taking over of white-owned farmland to resettle landless black people with compensation limited to improvements. The government's position has been that the reform programme was agreed on with the former colonisers and compensation of USD3.5 billion for the improvements and not the land is to be paid.

Zimbabwe's Second Republic was ushered in 2018, following the ouster of the late president of the first republic, R. G. Mugabe, after which the country enjoyed relative stability. The Second Republic has been trying to end sanctions, re-integrate into the commonwealth and attract foreign direct investment with limited success, whilst they are attempting to improve the country's investment policy (ease of doing business). As the country moves towards general elections, scheduled to take place between July and August 2023, inflation has once again spiralled out of control, as cost of goods and services increase as the value of the local currency depreciates against hard currencies.

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). A new Stock Exchange has recently been created at Victoria Falls, where their listed shares will be denominated in foreign currency. This is still in its infancy and is designed to attract foreign investors. No other significant developments have occurred.

PwC Zimbabwe supports clients with the local knowledge and skill of its people, access to a broad range of other professionals across the PwC global network of firms and enabling tools and knowledge systems.