Obstacles in way of potential investors anticipating economic revival

International investors hoping to bet on economic revival in Zimbabwe if the era of longterm ruler Robert Mugabe is over face two obstacles: it’s difficult to put money into the country’s markets and almost impossible to get it back out.

Within 24 hours of the military seizing control in Harare, investment firms say their phones have been ringing with client inquiries about the chances of a turnaround in Zimbabwe from decades of decline and bouts of financial chaos under Mugabe.

But any new leadership may be no better and, without using a proxy, going into Zimbabwe now would mean investing in an economy that is heading back into hyperinflation.

“From what we can see, Mugabe is out and that is a good thing,” said Peter Bartlett of Renaissance Capital.

“Mnangagwa (Emmerson) is in, which is not such a good thing. But I would have thought that he does now have a window of opportunity to re-engage with foreign investors and the IMF, and that is good news.” On the face of it, Zimbabwe’s stock market has chalked up spectacular gains, with the industrial index soaring 264% since the start of the year, while MSCI’s Zimbabwe country index rocketed 420%.

Yet those gains were driven by local investors ploughing their money into equities, as their savings in bank accounts are being rapidly eroded.

Severe shortages of dollar cash have set in

Some Zimbabweans are turning to the volatile cryptocurrency bitcoin to try to preserve their savings.