Michael Tome Business Reporter
The Insurance and Pensions Commission (IPEC) has engaged the Zimbabwe Investment and Development Authority (ZIDA) to highlight possible investment opportunities in the domestic economy in which players in the insurance and pensions industry can venture into.
IPEC Commissioner Grace Muradzikwa revealed this during a webinar on investment opportunities for the insurance and pensions industry in Zimbabwe, pointing out that the sector was keen on making large-scale local investment in strategic areas of the economy, which have mainly been considered a preserve for foreign direct investment.
She indicated that although foreign direct investments came with a number of benefits they did not outrightly benefit locals as foreign investors repatriate all their profits to their home countries where the money is used to develop those countries more than where the foreign investments are.
The insurance and pensions industry is one of the largest sources of local investment in most countries as funds from the sector increase capital supply to financial markets and wide-ranging areas of the economy.
Zimbabwe has lately seen the signing of major deals, particularly in the mining sector, a situation which the insurance sector feels shows insurers and pension funds can do projects of such magnitude.
On the other hand, some indigenous businesses have lately demonstrated the capacity to buy and operate big firms, particularly on the ongoing road and dam infrastructure projects underway across the country.
“As the regulator, one of our mandates is to develop the insurance and pensions industry, through working with the industry to identify growth opportunities for the benefit of policyholders and fund members and making an impact on the economy in line with the National Development Strategy 1 (NDS1).
“From the foregoing, it is evident that inward-looking when it comes to investments is more critical than ever. Local investors reinvest their profits in the local economy, they remain loyal to their country even when things go wrong, and essentially they also understand the business operating environment better than foreign investors,” Dr Muradzikwa said.
Insurance generates funds by collecting premiums which are then gainfully employed in the industrial development of a country for generating more funds and utilized for economic development.
ZIDA acting chief executive officer, Duduzile Shinya highlighted that some of the key sectors that local investors could venture into included infrastructure, transport (including rail), tourism, manufacturing, mining, health, student accommodation, agriculture, and food processing as well as information communication technologies.
Insurance plays a crucial role in the sustainable growth of an economy as it generates a significant impact on the economy by mobilizing domestic savings, accumulating capital into productive investments, promoting trade and commerce activities which result in the country’s economic growth and development.