The study employs the autoregressive distributed lag (ARDL) approach to examine the relationship between foreign direct investment (FDI) in the mining sector on the Zimbabwe economy, while controlling for both non-mining FDI and domestic investment. Using data over the period 1988–2018, this research results show that foreign direct investment in the mining sector has a significant positive relationship with the country’s GDP in the long run. Mining FDI is revealed to have relatively higher effects as compared to FDI in non-mining sector and domestic investment. The short-run analysis observed that mining FDI as well as non-mining and domestic investment still has positive and significant impacts on growth but at a relatively lower extent. This implies that it takes some time for such investments to have their full effect on the economy.

The paper analyses the determinants and the effects of foreign direct investment inflows (FDI) in the Zimbabwe Mining Sector (ZMS) in a specific study for 14 minerals from 2005-14 estimating a random effect model. Mineral specific variables examined include capacity utilisation, volume of manufacturing index, labour cost, sectorial contribution to Gross Domestic Product (GDP), political instability, mineral price and mineral output. FDI inflow in the ZMS can be explained by capacity utilisation, volume of manufacturing index, labour, sectorial contribution to GDP and political instability. No statistical evidence could be established to support mineral price and output as major determinants of FDI in the mining sector. All these variables confirmed with literature except for volume of manufacturing index. As a result, the government is recommended to put in place supportive policies that encourage investments and recapitalization in the mining sector so that local firms can effectively compete at both domestic and international investment markets.