The United Nations Conference on Trade and Development (UNCTAD)’s recent report that Zimbabwe’s foreign direct investments (FDI) inflows increased from US$349 million in 2017 to US$745 in 2018 is an indicator of the fact that, despite the myriad of challenges which are ranged against the country, it is chalking up success in its bid to turn around her economy.
This milestone success comes amid detractors’ various concerted efforts to depict the country as an unattractive investment destination. Some have taken to using the multiplicity of online news websites, which are mostly owned by Zimbabweans in the diaspora, to tarnish the image of the country so that would be investors would have to think twice before deciding to commit their funds to business projects in the country.
The opposition and its civil society organisations and labour bodies running dogs have also played their part in demonising the country through organising and carrying out violent and destructive protests which, although meant to score political points against ZANU PF and Government, have the effect of depicting the country as a negative investment destination. For example, during the 14 to 16 January protests the Botswana-headquartered pan-African retail giant, Choppies suffered losses to the tune of US$10 million which was made up of US$2.5 million in infrastructure damage and the remainder in looted stock. It has been a victim of MDC-organised violent demonstrations since 2016.
Fortunately, the Choppies group fully appreciates the characters behind the mindless protests and their warped motives and chose to keep invested in Zimbabwe. If anything the retail group intends to continue expanding its local footprint in the same way that it is spreading its presence on the continent.
The increased FDI was also attained against a backcloth of other challenges such as severe shortages of foreign currency which the country is facing that have seen some companies such as BAT Zimbabwe and Delta Corporation failing to repatriate dividends to foreign-based investors. The FDI feat was achieved in spite of other challenges such as cash shortages. This speaks a lot about the trust which some investors have in the Government of Zimbabwe’s ability to turn around the threats and challenges which it is grappling with into opportunities and success.
It is indicative of the value which they see in Zimbabwe’s potential, especially given its developed human capital and vast natural resources such as minerals. Unlike some would be investors who continue to watch from atop the fence, they know that the prevailing economic challenges are temporary in nature and that the time to stake a claim on the Zimbabwean economic landscape is now.
The foreign investors who sunk their investments into Zimbabwe over the past two years did not do so from the basis of thumb suck. They had a sound basis – Government’s ongoing efforts to improve the investment landscape so that it becomes competitive and match if not exceed those of its regional and continental peers.
Upon getting into office in November 2017, one of the changes which President Emmerson Mnangagwa rung was overhauling the controversial indigenisation law which stipulated that local people should own at least 51 percent of companies in the country. This obviously did not go down well with both existing and prospective investors alike who felt that this was grossly unfair especially for those who started from scratch and painstakingly built their companies only to be directed by law to cede 51 percent of their enterprises to people who had not put in a cent. Under the new administration only platinum and diamonds remain under the 51/49 regime.
Another major plank of the new administration’s economic recovery thrust is its “Zimbabwe is Open for Business” investment drive which seeks to lure investors to the country. This is not just an empty campaign. Government has moved to rationalise its investment legislation regime from the previous one, which was characterised by scattered and seemingly unrelated pieces of legislation on special economic zones, the Zimbabwe Investment Authority among others, and has already gazetted the Zimbabwe Investment Development Agency (ZIDA) Act which will consolidate all these bodies into one law. This is set to drive its one-stop shop thrust which will galvanise Government’s economic turnaround programme and improve the people’s livelihoods in line with the President’s Vision 2030. The new authority is already in the process of recruiting staff so that the project takes off as soon as possible.
It is gratifying to note that, despite the ridicule from doomsayers, the country’s “Zimbabwe is open for business” programme is bearing fruit. The President’s tours to various global destinations such as Davos to sell the country as a premier investment destination and woo international capital have not been in vain.
Going forward Government needs to build on the success registered in seeking investors to various sectors of the economy in order to drive economic recovery. Most of the investments which the country has secured so far have been targeting the mining sector. Zimbabwe’s economy is based on manufacturing which, in turn, is hinged on agriculture and mining as the main raw material sources. It is, therefore, very important to ensure that these two areas get investor funding to kick-start re-industrialisation.
When the news of the 2018 investment figures filtered on the market, some people especially from the opposition were quick to dismiss them as propaganda. The fact that the figures were released by a non-interested party, the UNCTAD puts to rest the propaganda accusations and should serve to inform Zimbabweans that, contrary to detractors’ views, Government is making considerable progress in its efforts to revive the economy and it is destined for success in this regard.
The development is very encouraging especially in view of the fact that some people have been very impatient with Government. The onerous task of turning the economy around was never going to be an overnight affair and people should, therefore, be patient and supportive of Government’s efforts.