Mnangagwa wooing investors

HARARE: Zimbabwean President Emmerson Mnangagwa has embarked on a charm offensive to attract investors as the country’s top companies warm up to his rhetoric.

Mnangagwa, who took over power from Robert Mugabe following political turmoil in the country, said his administration would step up its efforts to restore financial sector stability, saying the “culture of high costs to depositors must end”.

“The bottom line is an economy which is back on its feet,” he said. “People must be able to access their earnings and their savings as and when they need.”

He said his government welcomed partnerships with international investors. However, he said there was no going back on the land reform programme, which displaced white commercial farmers and devastated the country’s agriculture sector in 2000.

“All foreign investments will be safe in Zimbabwe,” he said. “We will abide by the terms of bilateral investment promotion and trade agreements.”

Mnangagwa is expected to launch re-engagement efforts with multilateral funders.

He yesterday said his push for Zimbabwe’s economic revival would be premised on curbing “externalisation” and smuggling of goods into Zimbabwe as well as ensuring that domestic and foreign debt obligations were settled.

Zimbabwe is expected to pursue discussions with the African Export-import Bank for a finance package to offset arrears owed to the International Monetary Fund and World Bank.

Last week, IMF head of mission to Zimbabwe Gene Leon said: “Immediate action is critical to reduce the deficit to a sustainable level, accelerate structural reforms, and re-engage with the international community to access much-needed financial support.”

In June, the IMF said Zimbabwe was in debt distress, and its public and external debt was unsustainable, with long-standing external arrears making foreign financing scarce.

The domestic, foreign and arrears debt stands at more than $13 billion and the country has been unable to clear this over the years, a situation that was choking the government in terms of ability to access fresh funding.

Former finance minister Ignatius Chombo said the budget deficit was set to rise from around $400 million to $1.2bn this year.

Analysts said immediate challenges included a need to shore up its business community and work to restore investor confidence in the quickest time possible.

The change of leadership in Zimbabwe has raised hopes that the new administration would have business-friendly policies.

Implats spokesperson Johan Theron said: “Our Zimbabwean platinum operations are more profitable than many of our South African operations and so at far less risk of being halted.”