The Herald (Harare)

3 April 2014

Zimbabwe: Investment: Zim Is the Place to Be

editorial

"We basically want to be like Norway, we want to be like Sweden, we want to be like Germany where you can basically talk of a German economy, a Norwegian economy, a Swedish economy. "It is a dream that we have and it is a dream we are committed to fulfil. We appreciate it is a process and it will take time . . . But surely we must get to a point where we can say we have a Zimbabwean economy."

These were Finance Minister Patrick Chinamasa's words to diplomats accredited to Zimbabwe in November last year as he outlined Zim-Asset and indigenisation to them.

He went on to say, "What we now need to do is to define a path which is transparent where investors can come and exploit to our mutual advantage as we go along. By addressing you today we are basically inviting you to be partners in that journey and you must look at indigenisation as a journey and not an event."

Yesterday, Minister Chinamasa was again telling international investors that they were welcome in the country, adding: "We can sit down and talk if there are any challenges."

The statement yesterday, more than the one made last year, was even more significant for two particular reasons.

Firstly, there has been the general lie spread to many parts of the world - often with some sections of our own media and local economists, politicians and activists playing the lead role - that Zimbabwe is not friendly to foreign investment.

It is a lie that has been thrown about since the start of the Fast-Track Land Reform Programme. And it is a lie that was brought back into currency when the country embarked on its indigenisation and economic empowerment drive.

But no matter how often a lie is repeated, it remains a lie. Which brings us to the second factor that made Minister Chinamasa's statement yesterday quite significant.

The Finance Minister was speaking within the particular context of the acquisition of majority shareholding in ABC Holdings by Atlas Mara for more than US$200 million.

For those that don't know, Atlas Mara is led by former Barclays Bank boss Mr Bob Diamond and Africa's youngest billionaire, Mr Ashish Thakkar.

This is the biggest such deal in Zimbabwe since the country switched to a multiple currency system in early 2009.

Of course, the usual naysayers who have made a living from badmouthing Zimbabwe will say ABCH is not a Zimbabwean firm and thus the deal does not directly benefit the country.

They should consider this: US$500 million will be invested in Zimbabwean operations over the next five years at a rate of US$100 million annually. Further, and more immediately, Zimbabwean shareholders will be paid US$40 million in cash and US$25 million in Atlas Mara shares.

This is taxable income, which means zimra benefits; and this is money that is coming into Zimbabwe, which means improved liquidity.

It also means the economy gets a stronger, better-capitalised bank with international leverage and local ability to extend lines of credit to our businesspersons here.

Investors of this scale do not just take a plunge. They conduct thorough due diligence and when they come to the conclusion that this is an area worth putting their money in, they take out the cheque books.

Atlas Mara looked at Zimbabwe critically and decided that it wanted to be here; we hope other international investors come to the same conclusion too.

Apart from the money that will be coming into Zimbabwe, this is also a major vote of confidence not only in the local financial services sector, but is also a big nod for the indigenisation policy.

Atlas Mara has said it has no problems with complying with the law, and it is already working on a plan to meet the requirements of the law in letter and - hopefully - in spirit as well.

Furthermore, this also poses a major question to those foreign-owned banks already operating in Zimbabwe.

If a new - and mind you, a major - foreign investor has no problems with complying with indigenisation, what exactly is making those players already here choke whenever they hear mention of empowerment?

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