Eyes of investors light up on potential of new Zimbabwe
Series of high-profile visitors to Harare in post-Mugabe period
● A tendency among South African businesses to “wait and see” could mean they miss out on opportunities in Zimbabwe while investors from elsewhere in the world flock in.
This is the view of Duncan Bonnett, director for strategy and business development at Africa House, a research and consulting specialist firm, who said the spirit in Zimbabwe had changed dramatically since Robert Mugabe was ousted as president in November.
“Zimbabwe’s public and private sectors are more positive than they have been in possibly 15 years, but with a sense of realism,” he said.
Challenges in the way
“Significant infrastructure and industrial revitalisation projects are planned, but there are still certain challenges in the way of realising them.”
Bonnett said delegations had been flying into Zimbabwe from across the world to investigate opportunities.
“There are reports that delegations have visited from the US, Canada, Brazil, Turkey, Japan, Korea, China and India, with a view to either making their first inroads into the country or expanding their existing business there,” he said.
Over the past few months, visitors to Harare had included the CEO of the Commonwealth Development Corporation, Nick O’Donohoe; Russian fertiliser mogul Dmitry Mazepin; the CEO of Russian diamond giant Alrosa, Sergey Ivanov; and the chairman of the London- and Johannesburg-listed Tharisa group, Loucas Pouroulis.
GE looks at hydropower
In February, a high-level delegation from US multinational General Electric visited and expressed interest in the 2 400MW Batoka hydropower project.
Zimbabwean President Emmerson
Much of this investment narrative is a kind of theatre in some respects. We don’t have transparency Piers Pigou Regional director, International Crisis Group
its support for Islamist groups.
They have accused it of supporting “terrorism”.
Ignoring the tension
But officials of Harare’s new administration, who have become regular visitors to New York and London as they seek to thaw relations with the West and get fresh funds from multilateral financial institutions, appear to be little bothered by the tensions in the Gulf region.
The Zimbabwe government owes the World Bank and IMF a total of about $6billion (about R74-billion), and needs to pay back at least 25% of the debt before those institutions will consider extending new loans.
Last month Mnangagwa was in Beijing but failed to persuade Harare’s “allweather friend”, China, to provide more financial aid.
Open for business
Despite the huge debt burden around his administration’s neck, Mnangagwa has claimed that since he took over from Mugabe nearly six months ago with his mantra of “Zimbabwe is open for business”, the country has secured foreign direct investment commitments of $3billion.
But the Zimbabwe Investment Authority, the state agency responsible for licensing and overseeing inward foreign investment, appears not to agree.
It said it had licensed projects worth $950million in the first quarter of this year.
The trip to Qatar was the third abroad this year for Mnangagwa, who is keen to achieve some semblance of economic turnaround and job creation ahead of elections set for later this year.
Piers Pigou, the Southern Africa director of the International Crisis Group, said the Qatar trip raised eyebrows in view of the diplomatic crisis surrounding the Gulf state.
Taking sides in the Gulf?
“Qatar has been very interested in investing in the continent in a number of ways,” he said.
“[The trip] is part and parcel of the drive to seek investment; what’s interesting is where else has he [Mnangagwa] been in the Middle East? Because if it’s only Doha, then he would be playing to the existing faultlines.
“Much of this investment narrative is a kind of theatre in some respects,” Pigou said.
“We don’t have any transparency on what’s being offered, how the amounts are being calculated and what’s committed.”
He described Mnangagwa’s claims of success in luring new funds as no more than “indicators of interest”.
Pigou added: “No one is going to seriously invest, in terms of long-term needs. It’s not just about getting FDI into anything, it has to go into priority areas.”