Published by the government of Zimbabwe
21 August 2008
Harare — SOUTH African investment experts say that companies in their country which are not risk averse are continuing to take positions ahead of an anticipated political settlement.
According to reports in the South African media the companies are pinning their hopes on a political settlement.
Mr Roelof Horne, who manages about US$1 billion in pan-African funds for Investec Asset Management told the SA media that "A booming, growing Zimbabwe can only be a net positive for the region."
Control Risks analyst Anne Fruehauf was of the opinion that post-crisis investment should depend on a security and monetary policy overhaul and came with a "clear health warning".
A deal acceptable to international donors, she said could usher in some US$1,5 billion in aid and ease risk across the region, boosting the rand and prompting a re-rating of South African equities, particularly those with Zimbabwe exposure.
"We'll see an immediate boost for local stocks," said one investment banker.
"Then there's specific companies that will benefit from an on-the-ground investment perspective."
South African firms already operating in the country were reported to be well positioned, as they have an edge over other foreigners, having not had political pressure to stay out.
"You have the length of service argument -- a large number of South African firms are already there and know the market extremely well, which can have a multiplier effect for business partners," said Fruehauf.
Platinum miners are the most obvious and immediate corporate beneficiaries of a stable Zimbabwe economy despite steps to nationalise foreign firms, inadequate power capacity and a skills shortage.
Impala Platinum, the foreign mining firm with the biggest investment in Zimbabwe, has already indicated a willingness to soldier on with its operation and to prioritise its local operation once the situation improves.
A World Bank report ranks Zimbabwe in 152nd place of 178 countries for ease of doing business.
But while the economy could take years to stabilise, once it does, Zimbabweans will want to go shopping.
Zimbabwe has one of the lowest levels of mobile phone use in Africa and government could raise foreign exchange fast by selling new licences to the likes of South Africa's MTN or Vodacom.
Standard Bank, the continent's number one banking group by assets, has virtually written off profits from its Zimbabwe unit due to soaring inflation, but CEO Mr Jacko Maree told Reuters it was ready to inject capital once a political solution is found.
South African retailers Shoprite, Pick 'n Pay and Woolworths all have experience in Zimbabwe and could quickly open new stores.
"Will South African companies immediately open 20 new stores? No. But they are definitely already at the drawing boards," said a senior banker at the South African arm of a major international investment bank.
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