Investing in Zimbabwe: Africa’s new hope
“Zimbabwe is a song which, once heard, is never forgotten; a mood to suit the needs of any soul, any time; a spell that binds all those who know her. Her voice brings forth many melodies. Welcome to Zimbabwe, a land rich in diversity ranging from low-lying semi-desert to lush highlands strewn with forests and lakes. Situated on a high plateau in Southern Africa and covering 390 245 km,” goes the welcome message of the Zimbabwe Tourism Authority.
Zimbabwe is positioned between Zambia and South Africa placing it at the centre of the transport grid. The country’s well developed road and rail networks ensure that exports are able to reach regional markets hassle free. Telecommunications, rail and road networks extend to many Southern African Development Community countries, as well as continental and global markets.
According to survey carried out by an international investment research group, the United Kingdom-based Economist Intelligence Unit (EIU), Zimbabwe is one of the top three African countries that offer the best investment returns between now and 2016.
Zimbabwe is a signatory to a number of treaties and bilateral Investment Protection Agreements, which include the World Intellectual Property Organisation (WIPO) and the African Regional Intellectual Property Organisation (ARIPO), which has its secretariat in Harare
Zimbabwe is also among Eastern and Southern Africa nations negotiating for a freer trade agreement with the European Union under the Economic Partnership Agreements (EPAs) as a successor to the Lome Convention.
Zimbabwe has got a relatively well developed infrastructure in the form of good quality rail link 3 247 km and 978 627 km networks to all major cities and neighbouring countries and has three international airports. There is adequate provision of electrical power (hydro and thermal), postal and telecommunication services, which are continually being upgraded.
Zimbabwe’s highly diversified industrial base provides the investor with a number of opportunities. The broadly based manufacturing sector produces in excess of 6 000 products or commodities ranging from food and clothing to fertilisers and chemicals, metal products of all kinds, electrical machinery and equipment and motor vehicle assembling.
The manufacturing industry is closely linked to agriculture with an excess of 60 percent of manufacturing value added either related to agro-industry or to the provision of inputs to the agricultural sector as stated by the Zimbabwe Investment Authority.
“Investing not less than US$1 million in a project approved by the ZIA, will qualify (an investor) for permanent residence on application. Investing at least US$300 000 in a sole business venture in a project approved by ZIA will qualify (an investor) for a residence permit for three years at the end of which permanent residence may be granted.
“Investing US$100 000 in a joint venture, approved by the ZIA, with a local or permanent resident of Zimbabwe will qualify for a three year residence permit at the end of which permanent residence may be granted.”
President Robert Mugabe is on record telling potential investors that Zimbabwe’s wide range of unprocessed resources were vital to attracting investment into value adding industries.
Officially opening the 55th edition of the Zimbabwe International Trade Fair in Bulawayo last month, President Mugabe invited potential investors to come and do business in Zimbabwe. He said that there is huge potential for joint venture partnerships between investors, manufacturers, industrialists and the public sector.
“We want investment from abroad,” said President Mugabe.
In an interview with How we made it in Africa in Nairobi, Kenya, leading Zimbabwean hospitality group Rainbow Tourism Group chief executive officer, Tendai Madziwanyika, underscored that Zimbabwe has the potential to give investors high returns.
“Zimbabwe is the place to be today. I can tell you that if people don’t come to Zimbabwe now, they are going to miss the boat because that is the next frontier. There are going to be good returns in Zimbabwe.”
Madziwanyika noted that after a decade of difficulties, things are falling into place in Zimbabwe.
He argued that the country is a viable investment opportunity due to political stability, its human capital, sound infrastructure and a robust telecommunications network.
“We have the highest literacy rate in Africa and one of the highest in the world, at about 93 percent. So we have got people who are capable. We have got colleges that are churning out graduates like no man’s business. Infrastructure; we have got a great road network connecting all the major parts of the country,” said Madziwanyika.
“We now have stability politically because now there is a conclusive leadership.”
Exporting from Zimbabwe is made easier by the proximity of seaports in neighbouring countries such as Richards Bay and Durban seaports in South Africa, Walvis Bay in Namibia, Beira in Mozambique and Dar e salaam in Tanzania.
Zimbabwe has developed a one stop shop where goods are cleared for export making exporting from Zimbabwe different from shipping from the coast. It also has a regionally linked electricity supply network that provides a reliable and competitively priced service to all businesses.
Added to that, Zimbabwe embraces technology at the highest level with the Government having put in place legislature to promote the use and learning of information communication technologies.
There are also competitively priced factory buildings readily available from the Zimbabwe Investment Authority and the private sector.
Zimbabwe has low levels of crime and the population makes doing business, a friendly driven experience.
The Zanu-PF government has positioned Zimbabwe as an export oriented economy a, position that is enhanced by strategic market access agreements covering about a billion people in Africa alone.
For instance market access from Zimbabwe is guaranteed as the country is signatory to a number to a number of preferential trade agreements that ensure duty free access into the Common Market for Eastern and Southern Africa, SADC, the United States, the EU and Asia as well as other regional and international markets including South America.
Critical investments have been made in the aviation rail and road networks telecommunication and energy sectors to facilitate the seamless flow of trade and investment into the SADC region, greater Africa and beyond.
These efforts have been major catalyst for growth and have enabled the country to navigate and survive some of the challenges that resulted from western induced sanctions and the global economic meltdown.
The government has placed emphasis on all sectors to ensure that they continue with strategies and programmes to further diversify Zimbabwe‘s economy.
The Zimbabwe’s economy is fairly diversified with agriculture, tourism and mining accounting more than 50 percent of GDP, and manufacturing contributed 23 percent of GDP at its peak according to the Ministry of Industry and Commerce.
Over the past 30 years the economy of Zimbabwe been characterized by massive progress stemming largely from foreign direct investment in mining, agriculture, forestry, tourism and manufacturing
According to the Food and Agriculture Organisation, agriculture accounts for about 40 percent of direct investment and employs about 60-70 percent of the country’s workforce.
The country has played host to a number of multinational corporations such as Coca Cola, Unilever Africa and Anglo American. Zimbabwe also exports cotton lint, raw sugar, tea and coffee, horticultural products and maize to markets in the EU, US and Asia.
With a literacy rate of more than 90 percent there is abundant hardworking competitively available, skilled and trainable human capital that broadens the competitive edge of Zimbabwe in the region.
Moreover investors can utilise the wealth of talent in the form of Zimbabweans who hold key positions in the region and internationally in major industries such as finance, mining, engineering, aviation, science, research and medicine, law and government.
Zimbabwe’s established infrastructure is one of the biggest selling points for potential; investors.
Zimbabwe has modern infrastructure facilities that are suitable for export oriented and global companies that want to gain grip in global exports and reduce the costs of their production while ensuring a safe and well established.
The Plumtree-Bulawayo Harare-Mutare highway is being renovated to world class standards. The road inks some of the key cities of the country and can be used as a gateway into the region and other African countries, according to the Zimbabwe National Roads Administration.
Zimbabwe maintains a strong financial services sector with 26 banks and other financial institutions. These include international banks such as Barclays Bank and Standard Chartered, regional banking group BancABC as well Zimbabwean majority owned banks such as CBZ, FBC and ZB which are well connected internationally.
Zimbabwe has over 40 exportable minerals, including gold, silver, tin, copper, chrome, nickel, platinum and diamonds.
The country possesses almost half the world’s known ferro-chrome reserves and the world‘s largest platinum and diamonds.
Zimbabwe’s asbestos and gold reserves are also amongst the largest in the world and the Marange diamonds fields are reported to be the planet’s biggest deposit in the world of alluvial diamonds.
Recently, stockbrokers Imara Edwards Zimbabwe said that Zimbabwe is at an opportune moment to attract foreign investment, and those investors who delay getting into the country will lose opportunities.
“There are very few places around the world where the return from commodity and other investments yield more return than Zimbabwe,” said Imara executive director, Tino Kambasha
Economic analyst, Joseph Sagwati, argues that every investment decision is a function of an appreciation of the business environment now and into the future given by all manner of factors impacting on the operational environment.
“Zimbabwe presents such an opportunity, despite the 49/51 share ownership that is required by the government of Zimbabwe,” he said.
The government is currently implementing an economic blue print – the Zimbabwe Agenda for Sustainable Socio-Economic Transformation, which aims to turnaround the country’s economic fortunes.