Johannesburg — Zimbabwe's economic crisis is accountable for shift in regional trade matrix
MOZAMBIQUE has now overtaken Zimbabwe as SA's African largest trading partner, official statistics show.
Statistics for last year show that trade between SA and Mozambique was R5,72bn, SA/Zimbabwe R5,38bn and SA/Zambia R4,89bn.
Over the past three years, Zimbabwe continued to experience a net flight of portfolio investment during the continuing crisis.
In 1997 portfolio investment accounted for about 32m net inflows annually. The trend has, however, continued to deteriorate, with the country registering net outflows between $10m15m over the past two years. Investment analysts say the country has experienced a shrinkage in offshore trade finance.
"Total trade finance facilities, which averaged 289m during the first four months of 2000, had shrunk by 28% to an average 209,5m over the same period last year," said one analyst. "This reflects a general unwillingness of global financial markets to extend credit to Zimbabwe."
Mozambique is turning out to be Africa's fastest growing economy while Zimbabwe is gaining the reputation of being the continent's fastest shrinking economy. This has seen SA turning away from Zimbabwe to Mozambique where the investment climate is hospitable. Investments worth more than R25bn have been channelled into Mozambique by SA companies over the past few years.
Addressing a Special National Assembly in Maputo recently, SA President Thabo Mbeki said his country has large investments in Mozambique. "With R25bn investment by South African parastatals and private companies, SA has become Mozambique's largest foreign investor."
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Zimbabwean companies have also been leaving in droves to set up operations in Mozambique.
But SA companies have literally invaded Mozambique. SA has taken over all the breweries in the former Portuguese colony.
Mozambique's largest brewer, Cervejas de Mocambique, in which SA Breweries has 78% of the shares, has taken over the country's only other brewery, Laurentina. Australian-based BHP Billiton, the world's largest mining resources company, has aluminium smelter Mozal in Mozambique.
The tourism sector is another area where South Africans are big players and recently the Absa group took over Banco Austral, formerly Popular Development Bank. SA's biggest sugar producer Illovo, has vast operations at Maragra sugar project in Mozambique.
Cellular services provider Vodacom has also targeted Mozambique, Zimbabwe, Namibia and Ghana as new areas of investment.
