eBusiness Weekly
Martin Kadzere and Kudzanai Sharara
Zimbabwe holds massive potential to become one of the fastest growing economies in Africa, but the bright prospects hinge on its ability to translate rhetoric into action, top local business leaders heard yesterday.
Panelists, who spoke at an exclusive CEO’s Conversation breakfast meeting hosted by this publication concurred that while the positive sentiment was coming through, transformation could be achieved if the government walked the talk on reforms.
President Mnangagwa has repeatedly declared that the country is “open for business”, a policy meant to attract investments as he seeks to end Zimbabwe’s almost two decades of economic decline.
Invest Africa (US) chairman Paul Hinks, who was part of a delegation of 21 investors who were in the country this week–and met the President–said they were encouraged by the government’s thrust on the economic reforms.
“If those things happen quickly, Zimbabwe is going to be a giant of Africa. It’s going to fly again,” said Hinks.
Already, the President has pledged sweeping reforms including tackling corruption, which stifled economic growth during the 37-year rule of his predecessor President Mugabe.
In nearly six month, Zimbabwe has attracted investments commitments worth more than $16 billion as the country opens the economy more to foreign investors.
The World Bank has in its latest forecast revised upwards Zimbabwe’s Gross Domestic Product to 2,7 percent from the 1,8 percent it had projected in January this year. This is, however, still lower than Government’s projection of 4,5 percent.
The President also promised that the country will hold free and fair elections this year and has allowed international observer missions, including the European Union to monitor the harmonised polls to be held on July 30, while committing to mend relations with the international community following several years of isolation.
Frontier Markets Editor of the Wall Street Journal, Dan Keeler said Zimbabwe, being a pre-frontier market was positioned to attract capital from investors focusing on frontier markets.
“The investors who focus on frontier markets actually want to understand what is happening here,” said Keeler.
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“You have to be clear. They have opportunities all over the world, but they are interested in coming here (as) they see there is a new market; they recognise the growth potential, but they don’t want to be in something in anyway unclear (and) confusing.
“The first thing that you need to do when interacting with the investors is to present yourself at a standard that is considered to be of international standards.”
He urged the private sector to “to put pressure on government to not just say the right things, but to start doing the right things.”
Investment banker George Manyere said the message that had been coming from global investors had been “extremely” positive.
“The investors are looking (at) how genuine are we in our desire to attract investment and open up the country for business and for foreign investors,” said Manyere.
“I think hard work has been significantly done and that has been evidenced by significant influx of real genuine foreign investors. We are seeing a different profile of foreign investors really looking at Zimbabwe.”
Manyere, however, expressed concern in terms of how ready Government as well as local economic players are with regards foreign investments.
“My biggest challenge is that when you meet investors and you don’t have an instrument for them to invest in, it’s almost a talk show. And to me this issue of saying you are ready is critical, because what instrument of investing are you offering.
“Even as a company if I meet billionaires in one room, at the end of the day they might love my story, but the question is am I selling shares, at what price, when do they get issued or what debt instrument am I selling? If I can’t answer or explain those things clearly, the meeting would not be meaningful.
“I think we may look right now at a country level. What are we offering investors to invest in. We may talk of privatisation and see whether all the laws are ready and investors can simply come in and say we want to invest in this business and our offer is X.”
Manyere, a renowned international banker, said Zimbabwe needed help from the London, New York, in terms of bridging that credibility gap and making the country’s message clear to investors in terms of what we are offering them.
“Before elections I want to see more of investment bankers coming here, talking to companies and Government, to help them structure our offering to the global and international capital markets,” Manyere said.
He said this will make sure that straight after the elections people will know exactly where they want to invest in. He noted that before the elections, not a lot of money is going to come into the country.
Nicoz Diamond chief executive Grace Muradzikwa said while the level of investment was huge, local companies needed to start self-introspecting to reach out to foreign investors.
“We need to look in and say to our self what do we need and start reaching out to investors instead of wanting the investors to come to us.”
“We have to be clear about our ask. As a country, are we clear about our ask? Are we ready when we say Zimbabwe is open for business,” said Muradzikwa.
