An Empirical Analysis of The Determinants of Private Investment in Zimbabwe

Dynamic Research Journals (DRJ)
Journal of Economics and Finance (DRJ-JEF)

Volume 2 ~ Issue 4 (April, 2017) pp: 38-54
ISSN (Online); 2520-7490
www.dynamicresearchjournals.org
An Empirical Analysis of the Determinants of Private

Investment in Zimbabwe
1
Thabani Nyoni and 2Wellington G. Bonga
1
nyonithabani35@gmail.com, 2sirwellas@gmail.com
Abstract: The worst of the ailments distressing the economy of Zimbabwe continue to be sycophantically
dubious and characteristically dystopian policies that are still causing malicious effects on private investment
and yet private investment is an indisputably powerful means for sustainable economic growth and
development. Private investment in Zimbabwe has been significantly low for the past three decades and yet the
performance of the economy of Zimbabwe, just like any other economy, relies upon investment; specifically,
private investment. This has apparently stimulated much concern, especially to economists; considering the fact
that private investment is the backbone of every economy, of which Zimbabwe is not an exception. Motivated by
the concern on the persistent retrogressive contribution of private investment to GDP as well as the incessant
underwhelming economic growth in Zimbabwe, this study systematically reviews the determinants of private
investment in Zimbabwe. Results show that GDP and public investment are the most powerful factors that affect
private investment in Zimbabwe. The study recommends attention to be made to all identified factors (that is,
GDP, public investment, interest rate, private sector credit and political uncertainty), paying particular
attention to the main determinants of private investment, that is GDP and public investment.
Keywords Economic growth, Gross Domestic Product (GDP), Investment, Private investment, Public
investment, Zimbabwe
JEL Codes: B22, D92, E22, E60, E66, G11, H54, O16, O40, O49, P33, R42, R53
I. INTRODUCTION
The determinants of investment (either private or public) have always stimulated intense debate by
both economists and policy makers the world over. The scholarly debate about the set of policies needed to
promote investment is of particular importance for developing countries such as Zimbabwe. Investment, as
defined by Blomstrom et al (1993), refers to all activity that involves the use of resources to produce goods and
services. Heim (2008) defines investment as the production of capital goods. According to Reilly & Keith
(2009), investment is the current commitment of dollars (money) for a period of time in order to derive future
payments that will compensate the investor. Investment, as defined by Agu (2015), is the outlay of money for
future use. However, private investment, as defined by Kumo (2006), refers to investment by the private
business for the purpose of profit generation. The Central Bank of Lesotho (2009), defines private sector
investment as a basic organizing principle for economic activity in a market-based economy where physical as
well as financial capital is generally privately-owned and production decisions are made for private gain. In this
study, private investment is operationally defined as the privately owned part of the economy, that part of the
free market economy which is made up of firms that are neither owned nor managed by the government.
There is consensus among economists and policy makers that investment (either private or public)
plays a pivotal role in economic growth of any nation. In fact, there is an undeniably strong relationship between
investment and the rate of economic growth. While investment is a catalyst for economic growth, it also
determines the productive capacity of a country and the size of labor utilized in order to exhaust this productive
capacity. For a developing country like Zimbabwe, investment poses multiplier effects on the economy,
especially considering the fact that there are so many resources in the country, which are actually lying idle, eg
land, and minerals (gold, diamond, chrome, platinum etc.). Sustainable economic growth mainly depends on a
nations ability to invest and make efficient and productive use of the resources at its disposal. Without
investment of sufficient amount and quality, there cannot be growth. Policies currently being implemented in
Zimbabwe, no matter how reasonable, will never stimulate the countrys ailing economy unless they give
private investment the attention it deserves.
Although there is no clear-cut consensus on the determinants of private investment in economic theory
and policy, it is generally understood that private investment plays a crucial role in growth generating processes
in developing countries like Zimbabwe. In any country one of the major drivers of sustainable growth and
development is the efficient and effective utilisation of private resources (private investment) in the economy.
www.dynamicresearchjournals.org 38 | P a g e
An Empirical Analysis of the Determinants of Private Investment in Zimbabwe
To move an economy on a sustainable growth path, a significant share of additional savings and investment
should emanate from private sources. In Zimbabwe, priority should be given to the private sector, if sustainable
economic growth is anything to go by.
Private investment is, in fact; an essential ingredient for sustainable economic growth and a powerful
development enabler especially in developing countries like Zimbabwe. The idea of developing the private
sector as an alternative development strategy in order to stimulate economic growth, create employment and
ultimately reduce poverty has already gained significant credibility and substance in Zimbabwe but private
investment levels in Zimbabwe remain low, by international standards and even when compared with several
other African countries. The implication of such low private investment levels is that the productive capacity of
the economy will consequently fail to increase. This in turn, subsequently leads to lower rates of economic
growth and job creation, and fewer opportunities for the poor to improve their livelihoods.
The response of private investment to various macroeconomic factors has received little attention in
the analysis of investment behavior in Zimbabwe although it is widely accepted especially amongst economists
and policy makers that expansion of private investment is the main catalyst for generating long-run economic
growth in developing countries like Zimbabwe. In fact, the revival of growth in Zimbabwe urgently needs,
among other things, an increase in investment, which should primarily emanate from the private sector if growth
is to be efficient and sustained. Therefore, to bridge the investment gap in the economy of Zimbabwe, policy
makers need to attract more private capital. Regrettably, in Zimbabwe; the much awaited role of the private
sector as an engine of growth has not yet materialised. There is urgent need for the government of Zimbabwe to
address the bottlenecks to investment amid stagnating economic growth.
Although, it is a well-known fact; as agitated by Attefa & Enning (2016), that investment (either
private or public) significantly contribute to economic growth; there is a broad base consensus that the private
sector contributes more meaningfully to economic growth, and has a stronger effect compared to the public
sector, as argued by several authors.1 Several studies2 argue that the main reason is that there is relatively less
corruption in the private sector. Similarly, various authors such as Serven & Solimano (1990), Coutinho & Gallo
(1991), Everhart & Sumlinski (2001), Robinson & Torvik (2005), (Economic Survey, KNBS-2012), Augustine
(2014), Nwakoby & Alajekwu-Udoka (2016) and Omojolaibi et al (2016) note that this has generally been
attributed to the fact that efficiency in the private sector is generally higher than that of the public sector.
Public investment is usually made for political reasons thus lacking economic rationale. On the other
hand, private investment has the capacity to mobilize resources and make wise investment decisions that
enhance efficiency and productive capacity of the economy. Even though private investment is a very crucial
factor in the growth and development process, it remains low in developing countries such as Zimbabwe. In
recent times, however; as already noted by Hermes & Lensik (2001), there have been a shift of focus, especially
in developing nations (like Zimbabwe); from public sector to private sector led growth strategies that emphasize
the dominance of market forces in the economy and a reduction of public sector in the development process
under the guiding principle that the public sector should devote its resources in areas where it supports rather
than replaces private sector investment. Public investment, as noted by Kahuthu (1999), is vital in reducing the
cost of production for the private investors, especially the one directed towards physical infrastructure
development. Therefore, private investment can be regarded as the fuel for the engine of growth because it is
the instrument that empowers the engine of growth. This research seeks to systematically review the
determinants of private investment in Zimbabwe.
Overview of the Economy and Private Investment in Zimbabwe

Is Zimbabwe blessed or cursed? This is the question that is probably lingering in the hearts of many
economic agents in Zimbabwe and has either gone unanswered for quite some time or has never been
satisfactorily answered. Well, the answer is here! Zimbabwe is a landlocked country, blessed with natural
resources that are in abundance and these include rich mineral deposits, arable tracks of land, flora and fauna,
abundant sunlight and water. Zimbabwes natural resource endowment actually gives her a natural competitive
advantage over many developing countries not only in Africa but also in other parts of the world.
However, on the other side of the same coin; Zimbabwe is cursed in the sense that, it is still amongst
the worlds least developed countries; in spite of all her abundant natural resource endowments, most of which
are not only lying idle but also mature for exploitation. The economy of Zimbabwe is riddled with poverty,
inequality, informality, chronic and recurrent phases of economic stagnation, poor institutional climate (lack of
1
Authors such as Khan & Reinhart (1990), Serven & Solimano (1990), Coutinho & Gallo (1991), Levine & Renelt (1992), Sakr (1993), Oshikoya (1994),
Ronge & Kimuyu (1997), Ghura (1997), Ahmed & Miller (1999), Beddies (1999), Mamatzakis (2001), Laopodis (2001), Were (2001), Badawi (2003); Karagol
(2004), Badawi (2005); Frimpong & Marbuah (2010), Ajide & Lawanson (2012); Muyambiri et al (2012), Augustine (2014) and Ayeni (2014).
2
Studies such as Seck & El Nil (1993), Oshikoya (1994), Calamitsis et al (1999), Gyimah-Brempong & Traynor (1999), Asante (2000), Ndikumana (2000),
Seruvatu & Jayaraman (2001) and Hoeffler (2002)
protection of property rights, poor enforcement of contracts etc.), cash crisis, rampant corruption and nepotism,
political volatility, low savings and investment, high interest rates, high costs of production, lack of
competitiveness, low aggregate demand, poor infrastructure, as well as high rates of unemployment.
Nyoni & Bonga (2017a) noted that in fact, Zimbabwe has suffered a lot due to corruption and nepotism
in all sectors of the economy. At the root of Zimbabwes problems, as strongly argued by Coltart (2008), is a
corrupt political elite that has, with considerable international support, behaved with utter impunity. In
Zimbabwe, corruption seems to be now acceptable as a way of life (Bonga et al, 2015) and yet corruption
directly hinders sustainable private investment growth and is very harmful to the economy of Zimbabwe as a
whole.
According to World Bank (2011), unemployment is now at 80 percent with the whole economy
operating in the informal market. Most unemployed people in Zimbabwe are university graduates. This is part of
the active population which is supposed to be absorbed into the economy. The challenge of university graduates
failing to get employment, as noted by Masekesa & Chibaya (2014), Moyo (2016), Kuwaza (2016) and Mwenje
(2016); has become a huge problem in Zimbabwe. Statistics from the Zimbabwe Ministry of Higher & Tertiary
Education, Science & Technology (2014), indicate that approximately 30 000 students graduate annually from
the country's institutions of higher learning against the backdrop of high unemployment rate now estimated at
above 90% although official rate is pegged at 10.8% (Chinjekure, 2014). It is unclear, why the rapidly growing
informal sector in Zimbabwe, with the potential to absorb university graduates cannot utilize the high level skills
generated each year from the countrys universities to enhance growth and global competitiveness (Takuta,
2012; Zinhumwe, 2012; Mwenje, 2016). As it is right now, considering the recent closure and consequent
downsizing of several private and public companies; actual unemployment is most likely well above 90%.
Based on the World Bank (2017) Easy of Doing Business Index, Zimbabwe is ranked 161; down from 156 last
year, out of 190 countries; where a ranking of 1 is considered the most conducive environment for doing
business.
Unfortunately, Zimbabwe is also in a perpetual declining private investment growth rate trend spell,
thus making it virtually complicated to realistically address these harsh economic and social challenges. It is
however important at this juncture, to categorically outline the fact that private investors will flourish only in a
supportive environment of cost reductions, with reasonable level of economic stability. Ideally, the private
sector is expected to play a leading role in investment while the public sector provides the much needed
enabling economic environment.
According to Ekpo (2014), conducive economic environment could be created by the government
through the formulation and implementation of appropriate, effective and sound macroeconomic policies and
programmes which, among other things, will facilitate the availability of required resources, stimulate savings
and investment, and ensure macroeconomic stability (low inflation rate [as opposed to the current deflationary
situation in Zimbabwe]; exchange rate stability and low interest rate) as well as the provision of adequate
infrastructural facilities in the economy.
A conducive investment climate provides opportunities and incentives for companies to invest
profitably, create jobs and be productive; thereby increasing both private investment and economic growth. The
better the investment climate, the higher the levels of private investment are likely to be. In the same line of
reasoning, the World Bank (2005) noted that a good investment climate provides opportunities and incentives
for firms to invest productively, create jobs and expand, therefore promoting economic growth and poverty
reduction.
Investors in Zimbabwe are barely exposed to various risks such as political risk (also referred to as
country risk), currency risk and interest rate risk among other risks, and these are the risks that are making many
investors to run away from the economic scene. It is one of the grotesque ironies of the Zimbabwean economy,
as noted by Malaba (2017), that the private sector is endlessly frustrated by government; and yet the little
liquidity that still exists is a result of the tireless efforts of the private sector.
Bayai and Nyangara (2013), similarly noted that, Zimbabwe; once touted as the Jewel of Africa at
Independence in 1980, has over the years acquired a reputation as the sick man of the Southern Africa region,
with disastrous economic policies, political instability and a peculiar inability to get itself out of often self-
inflicted difficulties. Although this is actually subject to debate, apparently it appears to be very true because
private investment trends in Zimbabwe have not been impressive even after the much celebrated and historic
2009 official dollarization. In fact, the investment climate in Zimbabwe is very uncertain primarily because of
the lack of a clear-cut investor-friendly policy framework from the government. It is important to note that if the
government continues to make limited strides on the policy front to improve the investment climate; economic
growth and development will remain low.
Recent empirical studies conducted in Africa, Asia and Latin America have proven beyond all
reasonable doubt, the critical linkage between investment and rate of growth (Seruvatu & Jayaraman, 2001). As
a component of overall demand, investment has an effect on the level of demand, especially, on the fluctuation
of this demand. Investment is indeed the component of the aggregate demand that is most susceptible to change,
since the other components namely household consumption and public expenditure are relatively stable. A slow-
down in investment is translated into a slow-down in economic growth (Gnansounou, 2010).
Recent analysis of the sources of growth specifically in Zimbabwe found that the greatest contribution
to a countrys growth came from higher investment and an increase in Total Factor Productivity (TFP) that
made more efficient use of factors of production (Serven, 2010 cited by Jecheche, 2010). The improvements in
factor efficiency in Zimbabwe stem from structural reforms since 1990s. Notable among the reforms are
Economic Structural Adjustment Programme (ESAP-[1991-1995]), Zimbabwe Programme for Economic and
Social Transformation (ZIMPREST-[1996-2000]), Millennium Economic Recovery Programme (MERP-[1999-
2001]), National Economic Revival Programme (NERP-[2003-2004]), Indegenisation and Economic
Empowerment (IEE) Act (2004 to date), Short Term Emergency Recovery Programme (STERP I-[February-
December 2009]), Short Term Emergency Recovery Programme (STERP II-[2010-2012]) and the highly
celebrated Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset-[2013-2018]). Upon
promulgation, these economic reforms were ostensibly envisaged to improve the environment for private
investment, giving the private sector a pivotal role in economic activity.
The introduction of the multi-currency system in 2009, gave birth to the end of the hyperinflationary
era as well as removal of price controls. The hyperinflation of the pre-multicurrency era negatively affected both
budgetary projections and the pricing system, thus ostensibly defying the profit motive of the private sector in
Zimbabwe. However, Jecheche (2011) noted that both private investment and its pace of growth appear to be
constrained since the introduction of the multicurrency system in Zimbabwe. Zimbabwe adopted the multi-
currency system dominated by the United States Dollar (USD) in 2009 after the Zimbabwe dollar, was
overwhelmingly decimated by consecutive years of very high levels of inflation that culminated in the historic
2008 hyperinflation.
Currently, an economic down turn primarily triggered by declining business activity and export
collapse has left Zimbabwe in a currency dilemma. In a bid to incentivize exporters on the back of sagging
exports, the Reserve Bank of Zimbabwe (RBZ) introduced Bond Notes last year in November. This has
however triggered a culture of arbitrage and a parallel pricing structure as the USD has become apparently
elusive (Mpofu, 2017). Ordinary Zimbabweans reacted with fear and anxiety to government 's decision to
introduce Bond Notes to contain the cash crunch, arguing that the move would effectively bring to an end the
economic stability brought about by the introduction of the multi-currency system in 2009 (Mashava, 2016).
The introduction of Bond Notes has put ordinary Zimbabweans and importers in a rut with many facing
bottlenecks as some local banks reject the use of the fiat money for foreign payments amid a severe shortage of
US dollars that has paralyzed the economy (Mpofu, 2017).
The banking sector, as noted by Nyarota et al (2015) is characterized by wide ranging interest spreads
owing to the different costs and lending rates charged by banks. It has also been observed that the spread
between lending and deposit rates have remained relatively high in Zimbabwe. Bonga (2016), indicated that
Zimbabwe is one nation that has for many years remained on the top list of economies with high interest rates
spread, and high interest rates are a signal of financial sector inefficiency. Consequently, these lending rates
continue to negatively affect the productive sectors of the economy because most economic agents continuously
fail to access cheaper funds and in the event that they access loans; they are frequently rendered high cost
producers thus reducing their competitiveness on both local and international markets. However, Zimbabweans,
as noted by ZIMCODD (2016), have proved that they no longer have confidence in the financial systems
pronounced by the monetary authorities with regards to the introduction of Bond Notes and other related policy
interventions. Unfortunately, this threatens the success of current policy interventions as well as future policy
endeavors by the monetary authorities. Zimbabwe government macroeconomic policies such as ZimAsset
(Zimbabwe Agenda for Sustainable Socio-Economic Transformation), the Indigenization policy, the recently
gazzetted [2015] Special Economic Zones Bill, Monetary and Fiscal policies and the FDI (Foreign Direct
Investment) policy among others; although frequently criticized for lack of policy synchronization and
consistency, remain central in identifying and harnessing the factors, processes and actions that are not only
necessary but also sufficient in order to firmly place the Zimbabwean economy on the path of sustainable
economic growth and development.
It is important to clearly mention that the Zimbabwean government has always shown sincere interest
and spirited effort in promoting private investment in Zimbabwe even though the country has always been and
continue experiencing subdued and unstable private investment growth rates since 1980, when the country
attained its independence. This is evidenced by its efforts to ensure the implementation of the macroeconomic
policies like ZimAsset whose main thrusts also include lessening the dominance of unproductive investments in
the public sector and enhancing the growth potential of the private sector.
Normally, for a developing country like Zimbabwe, policy makers are expected to come up with
realistic policies that practically seek to increase production, improve competitiveness, attract FDI, and hence
improve the standard of living of Zimbabweans. In this regard, there are various policy options on the table and
private investment promotion is one key instrument and primary engine of economic growth. As a result, due
attention ought to be given to the development of the private sector in order to help improve economic growth.
According to the UN (2014a), in low developed countries (like Zimbabwe), increasing the growth rate
of private investment would be a desirable target to achieve the post 2015 development agenda. For this
purpose, however; Zimbabwean policy makers apparently need to find the right balance between creating a
conducive investment climate and removing barriers to investment. What they need is to find working
mechanisms to attract private investors. Nonetheless, it is definitely every Zimbabweans rational expectation
that the economy is ought to rebound and address literally all the ills the economy is suffering from especially in
light of the 2008 hyperinflationary era whose wounds have not yet healed, the current cash crisis and the current
over-heated scholarly debate on the need to come up with realistic, investor-friendly policies in Zimbabwe.
Timing of the Study

The tendency to boost private sector participation in economic growth, as agitated by Badawi (2003;
2005), has prominently shaped the policy-making process in developing countries, giving rise to a wave of
privatisation programs and other related policies. Empirically, as noted by Esayas (2016), countries that were
able to accumulate high levels of investment achieved faster rates of growth. In this regard, investment culture
needs to be given a top priority by economic agents in their daily activities and by the government in its policy
planning and implementation. Zimbabwe actually requires a fast growing private sector to ensure a smooth
structural transformation of the economy and its sustainability, which apparently calls for a systematic review of
the determinants of private investment to understand and address their respective roles and consequently derive
policy tools and measures.
Therefore, this is a timely research; especially in view of the recent tripartite discussion amongst
Business (Employers), Labour (Workers) and the Government of Zimbabwe on the need to improve the
investment climate in Zimbabwe amid stagnating economic growth, closure or in some cases complete shut-
down of several privately owned companies as well as parastatals and the consequent laying off of thousands of
workers. Therefore, the study seeks to systematically review the determinants of private investment in
Zimbabwe in order to identify major macroeconomic indicators that can be stimulated to strengthen the
participative capacity of the private sector in economic development in line with Chhibber and Dailami (1990)
who stress the need for revival and promotion of private sector investment as the means for recovery and
enhancement of economic growth in developing countries. By systematically investigating the role of private
investment to the growth and development strategy of Zimbabwe and subsequently drawing appropriate policy
recommendations, the research will not only match the current crisis but also provide answers to some of the
macroeconomic problems bedeviling the Zimbabwean economy.
Purpose of the study

Private investment is key to long-term economic growth. Dailami & Walton (1992), Jenkins (1997;
1998) Jecheche (2010; 2011), Malumisa (2013) and Bayai & Nyangara (2013) confirmed this correlation for
Zimbabwe. To create and sustain economic growth, Njuru et al (2013) noted that, developing countries (like
Zimbabwe) need to maintain private investment at a sizeable proportion of GDP. Gillis et al (1987) proposed
that this proportion should not be less than 15% at any time, and that the country should target and sustain
private investment level of at least 25% of GDP. There is acknowledgement, as already emphasized by the
OECD (2006) and Hare & Fofie (2009), that high growth countries actually invest in excess of 25% of GDP.
However, in spite of all the measures adopted by the government; private investment as a percentage
of GDP in Zimbabwe has shown an inconsistent and downward trend for the period 1980-2016 (see Figure 1).
Such an inconsistent and staggering economic growth path apparently hinders the efficiency of resource use and
consequently generates negative signals to foreign investors in the sense that the robustness of domestic private
investment acts as a signal about the state of the economy to foreign investors. Ndikumana & Verick (2008)
agitate that high domestic private investment acts as signal for high returns to capital. Nyarota et al (2015) noted
that although government came up with various economic reforms and blue prints aimed at fostering sustainable
economic growth, these have not been very successful. Additionally, it has been observed that in Zimbabwe the
government is so much concerned about policies to boost private investment, but; without much knowledge on
the determinants of private investment. According to Mlambo & Oshikoya (2001), declining investment ratios
and investment levels are a problem; firstly because investment matters for growth, and secondly because low
investment increases vulnerability in the economy.
Against this background, the major challenge facing Zimbabwe is to come up with realistic policies
that would significantly help raise private investment in order to stimulate and sustain economic growth. It is
therefore important to systematically review the determinants of private investment in order to give policy
makers a clearer picture on how to successfully control private investment in the desired direction to foster
economic growth and development in Zimbabwe.
Research Questions
What are the determinants of private investments in broad terms?
What are the main determinants of private investment in Zimbabwe?
What is the impact of change in the independent variables on the dependent variable (private
investment)?
II. THE IMPORTANCE OF PRIVATE INVESTMENT

The dynamic role of the private sector in developing countries as an important means through which
the growth objectives of developing countries can be achieved has long been recognized (Ahiawodzi & Sackey,
2013). For a developing country like Zimbabwe, the possibility of rapid sustainable economic growth hinges on
sound contribution of the private sector. Table 1 below summarizes the importance of private investment in an
economy.
Table 1. Importance of Private Investment
Importance Source
Private investment plays a pivotal Serven & Solimano (1990); Chibber & Dailami (1990); Coutinho & Gallo
role in solving economic problems (1991); Ghura & Hadjimichael (1996); Bayraktar (2003); Ouattara (2004);
such as poverty and unemployment OECD (2006); Ahuja (2007); Majeed & Khan (2008); Frimpong & Marbuah
especially for developing countries. (2010); Karagoz (2010); International Finance Corporation (IFC) (2011);
Njuru et al (2013); Ahiawodzi & Sackey (2013); Ayeni (2014); Tchoussasi &
Ngangue (2014); Nwakoby & Alajekwu-Udoka (2016); Esayas (2016)
Provision of infrastructure and Chibber & Dailami (1990); Bayraktar (2003); Ahuja (2007); Majeed & Khan
social services (2008); Karagoz (2010); Frimpong & Marbuah (2010); International Finance
Corporation (IFC) (2011); Ahiawodzi & Sackey (2013); Njuru et al (2013);
Tchoussasi & Ngangue (2014); Nwakoby & Alajekwu-Udoka (2016)
Private investment boosts Solow (1956); Yolopoulost & Nugent (1976); Lucas (1988); Romer (1990);
productivity and accelerates Khan & Reinhart (1990); Green & Villanueva (1991); Levine & Renelt
economic growth (1992); King & Levine (1994); Ghana & Hadjmicheal (1995); Blomstrom et
al (1996); Patnaik & Joshik (1998); Anwer & Sampah (1999); Collier &
Gunning (1999); Durlauf & Quah (1999); Asante (2000); Ndikumana (2000);
Seruvatu et al (2001); Podrecca & Carmeci (2001); Devarajan et al (2001);
Easterly & Levine (2001); Hoeffler (2002); Bayraktar (2003); Ouattara
(2004); Durham (2004); Tarawneh (2004); Ahuja (2007); Khan & Khan
(2007); Majeed & Khan (2008); Jongwanich & Kohpaiboon (2008);
Muhamad & Rabil (2008), Frimpong & Marbuah (2010); Frimpong & Adam
(2010); Karagoz (2010); Bakare (2011); Haroon & Nasri (2011); International
Finance Corporation (IFC) (2011); Ajide & Lawanson (2012); Phetsavong &
Ichihashi (2012), Economic Survey, KNBS-2012), Hashmi et al (2012);
Ahiaodzi & Sackey (2013); Njuru et al (2013); European Commission (2014);
Mustefa (2014); Ayeni (2014); Tchoussasi & Ngangue (2014); Nwakoby &
Alajekwu-Udoka (2016); Muhdin (2016); Esayas (2016); Makuyana &
Odhiambo (2016)
Private investment facilitates and De Long & Summers (1995); Majeed & Khan (2008); Khan (2008);
promotes introduction of new Frimpong & Marbuah (2010); Karagoz (2010); Hashmi et al (2012);
technologies Tchoussasi & Ngangue (2014); Esayas (2016)
Table 1 has presented the importance of private investment in any economy, with empirical research
supporting the fact. The supporting evidence encourages proper concentration of supporting private investment
growth for increased benefits over time.
The trends of private investment levels in Zimbabwe from 1980 to 2016 are shown in Figure 1 below.
Figure 1. Private investment trends and Economic reforms in Zimbabwe (1980-2016)
P Linear (P)
25
21.68
19.93
Private investment (P) as a % of GDP
20 18.27 18.89
18.55
17.13
15.18 15.73
15.27
14.6 14.82
15 13.61 13.57
13.27 13
12.31 12.2 12.54 11.73
10.76 11.07
10.06 9.97
10 8.79
8.41 8.2
8.08 7.78
5.9
5 3.76 3.32.9
2.96
-0.2 000
0
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
-5
Year
Data Source: World Bank (WB) (2017)
At independence, in 1980; Zimbabwe inherited a mixed economic management system (Government
of Zimbabwe, 1982), characterized by a relatively well-developed modern sector and a largely poor rural sector
that provided livelihood to about 80% of the countrys population (Government of Zimbabwe-MDGs Report,
2009). However, it is important to categorically mention that, even today, there is a significant presence of state
enterprises in as much as the private sector enterprises. In fact, state enterprises grab the lions share in
Zimbabwes economy, and this has a strong bearing on the status and future growth of the private sector in
Zimbabwe. It is yet to be really known, why private investors dump Zimbabwe. The graph above shows
private investment trends in Zimbabwe from 1980 up to 2016.
As shown in the graph above, private investment has exhibited a subdued downward trend of growth
and performance, due to shifts and shocks to both political processes and economic reforms in Zimbabwe. From
the graph above, it is clear that private investment in Zimbabwe is being overwhelmingly suppressed. The
reasons are not certain so far. It is in this consciousness that this study seeks to uncover those factors that
determine private investment in Zimbabwe. In 1980, private investment contributed 12.31% to GDP. The
following year, it started to progress in a generally downward trend until it reached a low of 10.76% in 1989.
During this first decade, (1980-1990), Zimbabwe initiated development planning as an instrument for
achieving rapid socio-economic development. According to Chingarande (2012), the first two development
plans, the Transitional National Development Plan (1981-1983) and the First Five Year National Development
Plan (1985-1990) were formulated in the context of a command economy where government controls were the
order of the day. Development planning was targeted at raising private investment to a sustainable level in order
to improve the living standards of people among other goals (Nyoni, 2014). These first two development plans
actually failed to achieve their intended goals. Private investment was expected to increase significantly and yet
it decreased gradually, from its highest of 15.18% in 1981 down to 10.76% in 1990. This relatively poor
performance of private investment can be attributed to lack of fiscal disciple on the part of government.
Between 1990 and 1995, private investment as a percentage of GDP experienced an upward trend,
hitting an all-time high of 21.68% in 1995. The reasons for a relatively good performance of private investment
in this period include market-oriented financial policies and free market conditions during the ESAP period;
during which, according to the Government of Zimbabwe (1991); the state economic management system came
to an end. During this period private investment as a percentage of GDP grew by approximately 1.14% per
annum.
However, this promising trend was then reversed by various issues that started coming into play. For
example, Kanyenze (2006) and the UNDP (2008) noted that there was a severe drought in 1992 and a lack of
fiscal discipline on the part of the government. The years that followed ESAP period were even worse as shown
by the graph above, because the growth of private investment kept being subdued; until hitting an all-time low
of -0.2% in 1999 during the ZIMPREST era. Though few state enterprises were successfully privatized during
ESAP, the subsequent adopted market economy based policies such as ZIMPREST from 1996 to 2000 and the
enhanced privatization through the created Privatization Agency of Zimbabwe (PAZ) from 2000, established an
enabling environment for a vibrant private enterprise growth (Government of Zimbabwe, 1998; Privatization
Agency of Zimbabwe, 2002) and yet private investments contribution to GDP, during this period, fell from
15.73% in 1996 to -0.2% in 1999, as clearly shown in the graph above.
ZIMPREST, as noted by the Institute of Development Studies (2005), was short-lived due to its failure
to have any impact and also the donors did not participate in it. ZIMPREST failed in the same way as ESAP due
to fiscal indiscipline as a result of not conforming to macroeconomic principles leading to high inflation,
depleted foreign currency reserves, disequilibrium in the balance of payments (BoP) and declining economic
growth (UNDP, 2008). ZIMPREST suffered from a lack of international support to fund programme
implementation (Zhou & Hardlife, 2012). This clearly shows us that ZIMPREST, just like ESAP, failed to
stimulate investment and growth. However, as noted by Bonga (2014), failure of ZIMPREST to meet its
objectives was also caused by the slowdown in global economic performance in 1998 which reduced demand
for exports, and a sporadic rainfall pattern during the 1997/98 season which reduced agricultural output.
The new millennium era was met with gross macroeconomic mismanagement which saw private
investment contributing nothing to GDP for three consecutive years; 2004, 2005 and 2006. This is the period
during which economic policies such as the MERP, NERP and the IEE (Indegenisation & Economic
Empowerment) Act were promulgated and just like the former, they all failed to revive investment in Zimbabwe.
This is the decade (2000-2010), that, according to Cousins (2003), Phimister (2004) & Kanyenze et al (2011),
experienced a socio-politico-economic meltdown whose peak year was 2008.
According to Mzumara (2012), the period from the year 2000 was when the land reform programme
was also intensified and sanctions were imposed in response to the political environment and land reform
programme. This had a negative bearing on private investment in Zimbabwe as shown by the continuous
downward trend in the graph above. The period up to 2008 saw increasingly quasi fiscal activities by the central
bank which is blamed to have further fuelled the decline of the economy (Mzumara, 2012), thereby
continuously suppressing investment.
Although private investment continued with a downward trend, the graph shows that the multi-
currency era was relatively better in terms of providing the much needed macroeconomic stability. It is in this
period, as noted by Mzumara (2012), when the Reserve Bank of Zimbabwe (RBZ) stopped its quasi fiscal
activities owing to inability to print the Zimbabwe dollar bearers cheques used to pay suppliers after they were
no longer a legal tender. During this period as shown in the graph, private investment increased from 2.96% in
2008 to 9.97% in 2009. Since then, private investment has always continued to retrospectively contribute to
GDP. Hare and Fofie (2009) argue that countries (like Zimbabwe) who only invest 5-10% of their GDP are
unlikely to grow very rapidly as the more successful economies of recent decades have usually achieved
investment rates of at least 25% of GDP, sometimes considerably higher.
From the graph above, it is clear that private investment in Zimbabwe has always been hovering
significantly below the minimum levels (i.e. 25% of GDP). By 2015, private investment was still very low, 3%
of GDP, (which is well below 10%) as shown in the graph above. The economy of Zimbabwe is currently facing
a liquidity crisis, there is literally no cash in the economy. Investors and other economic agents in Zimbabwe are
currently stuck between cash crisis and political uncertainty. Such a situation apparently impedes private
investment growth in Zimbabwe.
III. METHODOLOGY
The study conducted a systematic review in order to get all the necessary information on the
determinants of private investment in Zimbabwe. Heterogeneous sampling was used to select the representatives
of sample. The criteria of selection were relevance of topic and geographical area of studies. Preference was
given to Zimbabwean studies and other recent African studies; studies from other countries around the globe
were also taken into account accordingly. The variables of this study were collected from 15 studies conducted
in 9 different countries. Of the 15 studies, seven (7) are from Zimbabwe. The review concentrates on both short-
run and long-run determinants of private investment. The study relied on a descriptive statistics tool,
percentages; to differentiate the most influential variables from other variables.
Table 2. Studies Selected for Review

Author(s) Year Country/Countries Title
Dailami & Walton 1992 Zimbabwe Private investment, government policy and foreign capital: A
study of Zimbabwe
Jenkins 1997 Zimbabwe Economic objectives, Public-Sector Deficits and
Macroeconomic Stability in Zimbabwe
Jenkins 1998 Zimbabwe Private Investment: Government policy and Foreign capital-A
study of Zimbabwe experience
Jecheche 2010 Zimbabwe Investment and growth relationship: An empirical analysis of
Zimbabwe
Muyambiri et al 2012 Zimbabwe The causal relationship between private and public investment in
Zimbabwe.
Bayai & Nyangara 2013 Zimbabwe Analysis of the determinants of private investment in Zimbabwe
Malumisa 2013 Zimbabwe & South Comparative analysis of the determinants and behavior of
Africa investment demand between South Africa and Zimbabwe
Sundararajan & 1980 India & Korea Public investment, Crowding out and Growth: A dynamic model
Thakur applied to India and Korea
Majeed & Khan 2008 Pakistan The determinants of private investment and the relationship
between public and private investment in Pakistan
Tadeu & Silva 2013 Brazil Determinants of long term private investment in Brazil: Using a
Cross section and a Monte Carlo Simulation
Attefah & Enning 2016 Ghana An OLS Approach to modeling the determinants of private
investment in Ghana
Magableh & Ajlouni 2016 Jordan Determinants of private investment in Jordan: An ARDL
Bounds Testing Approach
Elbanna 2016 Egypt Determinants of private investment in Egypt
Nkurikiye & 2016 Rwanda Effect of GDP, interest rate and inflation on private investment
Uwizeyimana in Rwanda
Source: Reviewed Literature (2017)
IV. RESULTS & DISCUSSIONS
Description of Reviewed Literature

This is a brief description of the characteristics of the reviewed literatures in terms of country, nature
of data, periods under study and model for analysis.
Table 3.
Author(s) Year Country Nature of data Period Model(s)
Dailami & Walton 1992 Zimbabwe Time Series 1970-1987 OLS co-integrated VAR Approach
Jenkins 1997 Zimbabwe Time Series 1975-1995 CGE Model
Jenkins 1998 Zimbabwe Time Series 1990-1970 Two-Step Engle-Granger
Approach
Jecheche 2010 Zimbabwe Time Series 1990-2009 OLS co-integrated VAR & VEC
Models
Jecheche 2011 Zimbabwe Time Series 1990-2008 OLS co-integrated VAR & VEC
Models
Muyambiri et al 2012 Zimbabwe Time Series 1967-2004 OLS co-integrated VEC
Bayai & Nyangara 2013 Zimbabwe Time Series 2009-2011 OLS
Malumisa 2013 Zimbabwe & Time Series 1980-2010 OLS co-integrated VAR & VEC
South Africa Models
Sundararajan & 1980 India & Korea Time Series 1960-1976 Dynamic OLS DOLS Approach
Thakur (India); 1958-
1976 (Korea)
Majeed & Khan 2008 Pakistan Time Series 1970-2006 OLS co-integrated VAR Approach
Tadeu & Silva 2013 Brazil Cross sectional 2012-2017 Monte Carlo Simulation
Attefah & Enning 2016 Ghana Time Series 1980-2010 OLS
Magableh & Ajlouni 2016 Jordan Time Series 1976-2012 ARDL Bounds Testing Approach
Elbanna 2016 Egypt Time Series 1983-2014 OLS
Nkurikiye & 2016 Rwanda Time Series 1995-2009 OLS co-integrated ECM
Uwizeyimana
Source: Reviewed Literatures (2017)
Determinants of Private Investment

Various factors affect private investment as observed from reviewed literature. In this systematic
review, however, five (5) influential variables are selected from literature review as shown in the table below.
The sign (*) shows that the variables have been found significant from reviewed literature.
Table 4: Determinants of Private Investments

Author(s) Year GDP PUI IR PSC PLTU
Dailami & Walton 1992 * *
Jenkins 1997 *
Jenkins 1998 * *
Jecheche 2010 * * * *
Jecheche 2011 * * *
Muyambiri et al 2012 *
Bayai & Nyangara 2013 * * *
Malumisa 2013 *
Sundararajan & Thakur 1980 *
Majeed & Khan 2008 * * *
Tadeu & Silva 2013 * *
Attefah & Enning 2016 * * *
Magableh & Ajlouni 2016 * * *
Elbanna 2016 *
Nkurikiye & 2016 * * *
Uwizeyimana
Summary (12/15)=80% (9/15)=60% (4/15)=26.7% (3/15)=20% (6/15)=40%
Key: GDP=real output; PUI=public investment; IR=interest rate; PSC=private sector credit; PLTU=political uncertainty
Source: Reviewed Literature (2017)
According to table 4, the factors affecting the performance of private investment are GDP (national
output, national income, real output, GDP per capita) (80%) and public investment (60%). As also shown in
table 4, they are found significant in the majority of the studies. The other variables: political uncertainty (40%),
interest rate (26.7%) and private sector credit (20%) are also important in explaining the performance of private
investment.
The impacts of change in independent variables on the dependent variable, private investment
Gross Domestic Product: Changes in national output (GDP) are the most important determinant of
private investment (Oshikoya, 1994). Neoclassical investment theory suggests that the growth rate of real output
is positively related to investment because it indicates changes in aggregate demand for output that investors
seek to meet (Chirinko, 1993; Ndikumana, 2000). This relationship can also be readily derived from a flexible
accelerator model with the assumption that the underlying production function has a fixed relationship between
the desired capital stock and the level of real output (Mlambo & Oshikoya, 2001).
In Zimbabwe, GDP contributes positively to private investment promotion and development as found
by Dailami & Walton (1992), Jenkins (1997; 1998), Jecheche (2010; 2011), Bayai & Nyangara (2013) and
Malumisa (2013). Similarly, Majeed & Khan (2008), Magableh & Ajlouni (2016), Elbanna (2016) and
Nkurikiye & Uwizeyimana (2016) also found that GDP contributes positively to private investment in Pakistan,
Jordan, Egypt and Rwanda respectively. Higher output is generally assumed to increase effective demand for
goods and services, thereby inspiring private investors.
Public investment: This is another influential variable that determines private investment. However,
the relationship between public and private investment is ambiguous in the sense that public investment may
either be crowding-in (positively affect private investment) or crowding-out (negatively affect private
investment) private investment. Crowding-out may occur through what is called the Ricardian Equivalence
Theorem. This situation may occur, as noted by Ghura & Goodwin (2000), if additional government borrowing
raises domestic interest rates and the future tax burden. In this case, the public sector competes for resources
against the private sector, thereby reducing the money (resources) available for private investment. Various
authors have uncovered the crowding-out effect of public investment on private investment and these include
Chhiber & Wijnbergen (1988), Evans & Karas (1994), Devarajan et al (1996), Nazmi & Ramirez (1997),
Balassa (1998), Ghali (1998), Seyoum (2002), Rossiter (2002), Zou (2003) and Eduardo & Christian (2011).
Crowding-in, as noted by Oshikoya (1994), is also possible via boosting of private investment by
increasing private returns through the provision of infrastructures such as communication, transport, energy and
so on. The crowding-in effect of public investment on private investment has been emphasized by many authors
such as Blejar & Khan (1984), Aschauer (1989), Munnell (1990) Berndt & Hansson (1992), Cullison (1993),
Ramirez (1996), Crowder & Hamarios (1997), Mallic (2000), Pereira (2001), Belloc & Vertova (2004), Erden &
Holcombe (2005), Bedia (2007), Samake (2008), Sahoo et al (2010), Dethier & Moore (2012), Xiaoming &
Yangang (2014) and Makuyana & Odhiambo (2016) among others.
Public investment should provide a favourable investment climate for the private sector to flourish
profitably. In this consciousness, the crowding-in or crowding-out effects of public investment on private
investment have significant effects on economic growth as implied in the Keynesian Theory of investment.
According to the Keynesian Theory of investment, economic growth will be stimulated if the positive effect of
public investment outweighs the negative effects of reduced private investment. However, in the reverse
scenario commonly known as the net crowding-out, the negative effect of reduced private investment
completely outweighs the positive effect of increased government investment and economic growth will not be
stimulated. In this case, the resources squandered by the government would have been more effective in the
hands of the private sector. Most of the developing countries may have a large component of public investment
concentrated on infrastructure projects, which may be complementary to private investment in the sense that
infrastructure developments promote private sector development and expansion.
The results from Zimbabwean studies by Jecheche (2010; 2011) and Muyambiri et al (2012) support
the crowding-in effect theory. According to them, public investment is complementary to private investment.
Their results confirm the findings of Tadeu & Silva (2013) who studied long term determinants of private
investment in Brazil. However, Sundararajan & Thakur (1980), Majeed & Khan (2008), Attefah & Enning
(2016) and Jenkins (1997); in India & Korea, Pakistan, Ghana and Zimbabwe, respectively; found the results
that support the theory of the crowding-out effect. According to them, public investment is inversely related to
private investment. In this regard, there will be competition for resources between the public and private sector.
Political Uncertainty: Political uncertainty refers to situations that threaten to untimely change,
influence or manipulate the political system in an unconstitutional manner. Political uncertainty involves those
events that usually bring sudden radical changes in property rights laws and rules governing business conduct.
Political uncertainty is a serious malaise, harmful to private investment and economic performance. Political
uncertainty accelerates policy uncertainty, which is very harmful to productive economic decisions. For
instance, a high probability of a change of government implies uncertain future policies; so that risk averse
economic agents may stop taking critical economic decisions or might dump the economy and choose to
invest abroad. According to North (1981), good political and governance institutions are important in reducing
economic uncertainties and promoting efficiency. Better political and governance institutions, as noted by the
World Bank (2004), improves the investment climate by enhancing bureaucratic performances and
predictability. This in turn reduces the cost of doing business.
Due to political instability, as noted by Rani & Batool (2016), uncertainty comes in an economy and as
a result investment decreases. Fosu (1992) points out that in the presence of political uncertainty, the risk of loss
of capital increases, which lowers the level of investment actually taken. Political instability is likely to shorten
policy makers horizons leading to suboptimal short term macroeconomic policies (Aisen & Veiga, 2010;
Zouhaier & Kefi, 2012). A government can choose short horizon forward flight and practice of the worst
economic policies which he hopes to reap the medium term (failure of his successor) (Ozler & Tabellini, 1991).
Politicians support and promote those policies which are in their own benefits (Tabassam et al, 2016). However,
as far as private investment is concerned, Alesina & Perotti (1996), agitate that political instability leads to low
growth; it creates risk and uncertainty in the country which results in reduced volume of investment. Dixit &
Pindyck (1993) show that, based on the assumption of investment irreversibility; firms can be prompted to delay
or forego investment out of fear that the economic environment might change for the worse. Political
uncertainty is expected to affect private investment negatively because this leads to policy uncertainty. As a
result, rational firms prefer delaying the investment, until the political uncertainty is resolved (Julio & Yook,
2012).
In Zimbabwe, political uncertainty contributes negatively to private investment promotion and
development as found by Jenkins (1998), Jecheche (2010) and Bayai & Nyangara (2013). Similarly, Majeed &
Khan (2008), Tadeu & Silva (2013) and Attefah & Enning (2016) also found that political uncertainty
contributes negatively to private investment in Pakistan, Brazil and Ghana respectively. In Zimbabwe, political
uncertainty continues to scare away private investment.
Interest rate: Interest rate is the price that relates to present claims on resources to future claims on
resources; the price a borrower pays in order to consume resources now (Kwak, 2000). Interest rate is the cost of
borrowing money by the borrower (Aftab et al, 2016). Interest rate can also be defined as the cost of capital or
simply the cost of investment. Changes in interest rate can reflect the basic situation of the operation of macro
economy (Khurshid, 2015), it also affects private investment as well as all other macroeconomic variables. In
deciding whether to invest or not in a certain project, a firm must compare the rate of return with the interest
rate. Therefore, the net investment apparently depends on the total volume of investment projects where the
expected rate of return exceeds the interest rate.
However, the impact of real interest on private investment is apparently ambiguous in the sense that it
may either be positive or negative. According to Ndikumana (2000), the sign of the real interest rate is an
empirical issue and depends on whether the data supports the McKinnon-Shaw hypothesis or the neoclassical
view. The McKinnon-Shaw hypothesis states that interest rates affect private investment positively (Agrawal,
2001). However, the neoclassical view is that real interest rates are expected to affect private investment
negatively since higher rates raise the user cost of capital and therefore reduce investment (Ndikumana, 2000).
The results from the studies show that interest rate is inversely related to private sector performance in
Zimbabwe, Jordan and Rwanda as found out by Bayai & Nyangara (2013), Magableh & Ajlouni (2016) and
Nkurikiye & Uwizeyimana (2016) respectively. According to them, an increase in the real rate of interest will
apparently raise the user cost of capital, consequently making investment less profitable. Owing to high cost of
investment capital, investment by both local and foreign firms is discouraged. However, Dailami & Walton
(1992) support the McKinnon-Shaw hypothesis. In this regard, a reasonable level of interest rate raises savings
and hence investment.
Private Sector Credit: Private sector credit refers to financial resources provided to the private sector,
such as loans and advances, purchases of non-equity securities, trade credits and other accounts receivables,
which establish a claim for repayment (Olowofeso et al, 2015). Private sector credits are claims of financial
institutions on non-financial sector to GDP, which reflects domestic asset allocation. This reflects an increase in
private sector activity in investment (Aftab et al, 2016). Changes in the volume of bank credit to the private
sector are suggested to have a positive impact on investment activity among developing countries (Oshikoya,
1994; Ndikumana, 2000).
The basic idea is that some business agents are unable to get financing directly from the debt market,
hence these agents are strongly dependent on bank credit (Loungani & Rush, 1995), which has remained the
most important source of investment financing among private enterprises in developing countries (Oshikoya,
1994). Additionally, this is based on the argument that the availability of loanable funds may affect the
investment decisions irrespective of the cost of capital (Chirinko, 1993). Therefore, private sector credit affects
private investment positively. This implies that private sector credit encourages and promotes private
investment.
However, in Zimbabwe, Jecheche (2010; 2011) found that credit to the private sector is negatively
related to private investment, confirming the results of Attefah & Enning (2016) who studied the determinants
of private investment in Ghana. Although paradoxical, in the sense that the results contradict economic theory;
this apparently implies that in Zimbabwe (just like in Ghana), increases in private sector credit, neither
encourages nor promotes private investment. This is not only true but also acceptable in the sense that funds to
the private sector do not go to finance new investments primarily because of poverty and economic hardships
prevalent in Zimbabwe. Most people in Zimbabwe actually borrow to finance other matters like education and
basic necessities.
V. RECOMMENDATIONS
The study recommends the following:
1) Since GDP has been shown to be a very powerful determinant of private investment in Zimbabwe, to
revive and stimulate private investment; policy makers should target increasing production (output). In
this regard, protectionist measures such as the Statutory Instrument 64 (SI 64) may be put in place and
properly implemented in order to control imports or encourage local producers in the private sector.
2) Based on the positive impact of public investment on private investment as shown in this study, the
government of Zimbabwe should focus on putting in place the necessary public infrastructures such as
roads, electricity, communication as well as better health delivery systems because such public
investments work as complements to private investment. Public-Private Partnerships (PPPs) (as already
emphasized in ZimAsset) in Special Economic Zones (SEZs) are also recommendable since they also
seek to promote private sector investment. Incentivizing investment (e.g through offering special tax
incentives) in SEZs is also commendable, in order to lessen the burden to private investors who
frequently face fierce competition from international players. This would apparently help private
investment to grow sustainably.
3) A stable political environment is recommended because it is a signal of a favorable investment climate.
VI. CONCLUSION
Private investment is one of the key ingredients in economic growth of any nation. In fact, the rate of
investment is a key factor that differentiates developed countries from developing countries. Since private
investment is undeniably more effective than public investment, relevant stakeholders and authorities cannot
afford to deliberately turn a blind eye on private investment in their strategic policy mapping processes. The
main aim of this study was to systematically review factors that determine private investment in the
Zimbabwean context.
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An Empirical Analysis of The Determinants of Private Investment in Zimbabwe

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Dynamic Research Journals (DRJ)

Journal of Economics and Finance (DRJ-JEF)

An Empirical Analysis of the Determinants of Private

Overview of the Economy and Private Investment in Zimbabwe

Timing of the Study

Purpose of the study

II. THE IMPORTANCE OF PRIVATE INVESTMENT

Figure 1. Private investment trends and Economic reforms in Zimbabwe (1980-2016)

Table 2. Studies Selected for Review

IV. RESULTS & DISCUSSIONS

Description of Reviewed Literature

Determinants of Private Investment

Table 4: Determinants of Private Investments

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