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Article Title:
The Feasibility of Value Addition in the Mining Sector in the Wake of the Indigenization Policy in Zimbabwe
by Tracquilister Shangahaidonhi and Bryne Gundani

Abstract:
This study seeks to establish the effect of the Indigenization Policy in the country against the Value addition strategy which has been called for by policy makers to ensure that the country fully benefits from its resources. The purpose of the study is to explore the feasibility of funding value addition motive when the country employs the indigenisation policy. The study is significant because it contributes to existing knowledge on economic development in Zimbabwe and creates a base for further studies. This work assists policy makers to be equipped with the requisite knowledge on Indigenization and its relationship to foreign investment so as to ensure their viability and the growth of the economy as a whole. The period under study is from 2009 to 2012. Secondary data and empirical studies by other researchers assisted in the formulation of the methodology. Data was fetched from Chamber of Mines, Reserve Bank of Zimbabwe, International Monetary Fund (IMF), World Bank reports, Ministry of Finance and Failed Nations. Monthly data for (FDI), Risk factors, Interest rates, Inflation, Gross Domestic Product (GDP) and Labour costs was used to make a total of 47 observations. The classical linear regression model, Ordinary Least Squares was used to analyse the variables. The research found that, risk factors are significant albeit with a negative sign showing a negative relationship between Risk Factors and FDI. It was concluded that policies such as the Indigenization Policy are not yet forthcoming given that the country is still recovering from the economic downturn. The indigenisation policy has a negative impact on FDI. Policies that reduce country risk levels and that promote peace, anti-corruption and transparency should be encouraged if the economy is to realize long term inflows of FDI.

Keywords: indigenisation, value addition, foreign direct investment, feasibility, policy

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