10 November 2017

Zimbabwe: Have Investment Deals Gone Sour?

opinion

Zimbabwe has over the past few years hosted trade and investments missions from Europe, Asia and the African region among others, but of concern is the fact that these have not yielded much. Although it is quite understandable that setting up shop is not a one-day event, but a process that takes some time, we still have not seen much being done given the volume of delegations that we have received. The mismatch is too wide, it needs prodding.

While the economy needs to anchor on solid home-grown solutions for sustainable economic growth and development, trade with other countries and foreign direct investment are critical pillars. In a global village that the world has become, economies need foreign investments and the participation of multinationals firms that foster technology and skills transfer.

These induce more efficient ways of doing business and hence increase the competitiveness of countries such as ours, among an array of benefits. Africa has generally not been the best recipient of FDIs, but this should not be an excuse. Zimbabwe has the potential to break ranks and be a pacesetter for the continent. The fact that this country has hosted many delegations means that the opportunities for business are there.

The mining sector, energy, tourism, manufacturing, agriculture and other sectors are replete with opportunities where Zimbabwe needs joint ventures and other forms of partnerships with foreign investors, who normally have the financial muscles and expertise to take projects off the ground. It is in this regard that we are quite concerned at the few results showing from all the delegations that have come from France, Russia, South Korea, China, United Kingdom, Turkey, South Africa, Kenya, Ghana, Botswana, India, Egypt, Iran and many more.

What we have noticed as the greatest undoing is lack of follow-through. While pomp and ceremony has marked the visits by these investors, somehow it all fizzles out as time progresses. It would be naïve of me to fail to understand that the challenges in the economy do affect progress, but it would also be lame for anyone to think that with more effort and zeal, the environment is the best for some investors, particularly those in for the long haul, to come and set-up shop.

The economy has experienced immense challenges over the past decade or so, but the fact that we have still raised investor interest and lured them here means there is something that this country has. The economy just needs to leverage on this and ensure we attract a fair share of investment.

Recently, we received the good news that, according to the latest World Bank annual ratings, Zimbabwe is now ranked 159 in 2017 from 161 last year. A movement of just two places may not be much to write home about, but it is indicative of efforts being made to improve the business environment. Trading Economics revealed that the Ease of Doing Business in Zimbabwe averaged 162,60 from 2008 until 2017, reaching an all-time high of 171 in 2011 and a record low of 153 in 2014.

With more effort, the 2014 levels can be surpassed soon. We notice that the Office of the President and Cabinet is really at work in terms of ensuring significant improvement in the ease of doing business. We pray that the same energy be directed towards ensuring that any trade deals or potential deals secured during trade and investment missions are followed through and massaged to ensure fruition.

We need to hear more news of companies opening or expanding instead of the usual dose of hose that are they closing and laying off employees. They say when the going gets tough, the tough get going. So we should get going as an economy and foster trade and investment deals that will positively impact the economy.

The emphasis over the past few years has been on value addition, particularly at a time when primary exports are fetching very low prices. In this regard, more investors, both local and foreign, are critical to invest in new plant and machinery to promote value addition. Strong-muscled companies such as Zimplats, Delta, Econet, Seed Co and a few others may not have any difficulty in terms of expansion programmes, but the bulk of local firms are presently hamstrung by challenges and they need foreign capital to increase capacity.

On trade, Zimbabwe has strong ties with most countries on the region, but there is scope in boosting these. Furthermore, such countries as China, India and Iran have said there is immense potential to grow trade with Zimbabwe. We thus need to capitalise on this kind of interest so that we can sell all we can to those countries and earn foreign currency, while also sourcing our needs from those markets.

Trade agreements will make these happen. Moreso, capitalising on the trade and investment missions will secure better and more concrete deals from which the economy will emerge victorious. We should not sleep on the wheel, but ensure we maximise on every opportunity that comes our way. We have no luxury to treat these missions as if we are already sorted as a country. Let's rise up and make the most of the interest that the world continues to show on us.

Our brand has not been the best performing on the globe by any measure, so if we manage to attract interest regardless of this, we have no reason to be lackadaisical about it. Apathy, half-heartedness or a lasses-faire approach to business is doing more harm than good. These are words that should even appear in our vocabulary.

It is in this regard that I commend Foreign Affairs Minister Dr Mzembi for expressing great desire to re-engage the UK and the United States to strengthen trade and economic ties. Barring politics, Zimbabwe's economy has a lot to benefit from stronger relations with these two and other players on the globe. Of course there is no harm in reminding them about our sovereignty here and there.

"I shall seek an honest and forthright dialogue with these countries in order to let go of the past and pursue mutually beneficial economic opportunities. The rapprochement we seek shall be anchored in new vibrant trade and economic relations," said Dr Mzembi yesterday as he addressed diplomatic missions in Harare.

We hope to see more missions over the next few months, but these should not just be futile exercises, but should instead result in more FDI and increased trade. Zimbabwe has a precarious balance of payments position that needs redress while its GDP needs to grow by higher margins to improve the standards of living for its citizenry. The sum total of all efforts will surely result in a better Zimbabwe that should occupy its rightful place in the global village.

In God I trust!

Zimbabwe

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