Economic Cooperation:
Economical and Commercial relations between Italy and Zimbabwe
Exchange between Italy and Zimbabwe
In 2006 Italy’s commercial deficit towards Zimbabwe was equal to 69,7 million euros, an increased value of 80% of the total exchange (commercial balance).
In 2006 Italian exports towards Zimbabwe experienced a decrease of 14,6% compared to 2005, whilst Italian imports increased by 6,4% compared to the previous year, determining an increase of the bilateral commercial deficit for our country, resulting in just under 70 million euros. In the first 6 months of 2007, the Italian export sales towards Zimbabwe increased by 13.6% compared to the first semester of 2006, whilst the imports registered an increase slightly inferior of 10.4%. However the difference in the absolute starting values of the two flows determined an additional increase of the commercial deficit of our country towards Zimbabwe, compared to the first 6 months of 2006.
In 2006 Italy exported to Zimbabwe mainly specialized machinery even if the sales of these Italian companies in this circle of merchandise experienced a drop of 61% compared to 2005. In second and third place equal, in the value export list, appear mechanical products and apparatus of general sue, whose sales, contrarily, experienced a notable expansion compared to 2005 (+102% + 151%). Agricultural machinery follows, exports of which increased by 34% and machine tools whose sales, even though modest, nearly triplicate compared to the previous year.
In the first 6 months of 2007, mechanical machinery were the principal items of export to Zimbabwe, registering an increase of over 170% compared to the first semester of 2006. In second place are machines for specialized use, whose sales increased by over 70%, followed by machine tools. In fourth place, there is a strong increase in the sale of electrical generators of nine times compared to the same period of 2006.
In 2006, Italy imported from Zimbabwe predominantly iron and steel products, precious and ornamental stones, non-ferrous metals, agricultural products and leather.
In the first semester of 2007, the importation by Italy of iron and steel products increased to over 28% compared to the first 6 months of 2006, whilst there was a reduction of 15% in the importation of stones. There was however an increase of nearly 300% in the acquisition of agricultural and horticultural products from Zimbabwe by Italy.
As far as the direct foreign bilateral investments go, Italian interest in the country is rather modest. From 2004 to 2006 only four Italian companies requested the approval of ZIC.
Foreign Investments in Zimbabwe
The principal foreign investments where established before the country’s independence (1980) and they are mainly of British and South African background. The principal investing countries are represented by Sough Africa and Great Britain, countries which have dominant positions especially in the mining sector, in the production of wood and have vast interest in the manufacturing sector and in agriculture (mainly tobacco, coffee, tea and sugar). But it must be noted that the agricultural sector, after the agricultural reform and the redistribution of the land, has experienced a drastic reduction in it’s production. Overall the investors are being very cautious and will maintain this stance until the political and economic conditions improve. In fact further to the negative economic parameters described another negative influence for the investors is the rampant corruption and the bad governance of the country, added to which is the crisis in the financial sector which has a few banks under investigation. Another hard blow for the investors is the new indigenization law, which establishes that 51% of the shares must be retained by an indigene, the mining companies there operating are heavily harmed.
Whilst most Commonwealth countries do not require a visa, in Zimbabwe the regulations that govern a working visa are stringent and the visa must be requested before one’s arrival in the country through, either High Commissions, Trade Missions or Embassies in Zimbabwe.
Relative to the presence of Italian companies operating permanently in Zimbabwe, we have Salini Impregilo Joint Venture and Ansaldo who together with Fincantieri and Termomeccanica execute maintenance work at the Hwange Power Station. Even though there is a presence of Italian companies in the country, there is no Chamber of Commerce, neither a Committee of Italian Entrepreneurs. The ICE office territorially competent has its seat in Johannesburg.
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