At the turn of the century, Zimbabwe’s economy was starting to decline. This was characterised by dwindling lines of credit, low investor confidence and negative marketing of the country by detractors. The situation was worsened when the land reform programme was effected which saw vast tracks of land being transferred from a few white commercial farmers to the majority of locals. The latter move caused ill-legal sanctions to be imposed on the country.
Fast forward the above scenario to 24 November 2017, when power was transferred from former President Robert Mugabe to the new President Emmerson Mnangagwa. The latter hit the ground running. President Mnangagwa introduced the concept of “Zimbabwe is open for business” by introducing a raft of economic measures to open up the economy to both local and foreign investors. The strategy was calculated to lure investors to leverage Zimbabwe’s good climate and rich treasure of over 60 mineral resources which are yet to be tapped.
In May 2018, the United Kingdom government extended a loan of US$100 million meant for revival of companies, which is set to be administered through Standard Chartered Bank. On the heels of this commitment, a delegation of British investors visited the country and held a meeting with President Mnangagwa on 4 June 2018 at his Munhumutapa Office. The delegation which was representing some 21 organisations was led by Invest Africa founder, Mr Robert Hersov and Simpion Power chief executive officer, Paul Hinks. Hersov was quoted in some sections of the media commenting that “The President and his ministers were very open, honest and frank about the situation that Zimbabwe is in right now but also the potential that your country has.”
Energy availability in any economy will parachute development and the current administration also focused on that aspect. To this end, the Chinese Import and Export Bank (EximBank) of China has released US$200 million of the US$1 billion required for the construction of units 7 and 8 at Hwange Power Station. When completed, the two units will add 600 Megawatts to the national grid.
Mining is one of the country’s cash cows owing to demand for minerals which are readily available in Zimbabwe such as lithium, gold , diamond, coal, tantalite and platinum, to mention just a few. In this regard, a US$4.2 billion deal was signed with a Cypriot investor to develop a platinum mine and refinery in Zimbabwe.
As a way of expressing its confidence in the Mnangagwa administration, the Chinese government unlocked a US$100 million loan facility for the mining sector. The loan was initially pledged during the Mugabe administration, but for unknown reasons was withheld. While addressing the Youth Convention in Gweru last week, President Mnangagwa said that there was no need to seek reasons as to why the loan was withheld, but the important thing was that finally the money will be availed and youths in mining will be the beneficiaries.
In another exciting development, Government was embroiled in a battle with platinum miner, Zimplats Holdings Limited over a request for the latter to cede 27 948 hectares of unexploited platinum claims. The wrangle which started in 2013 was finally resolved in a move which shows that the miner has seen sense and developed confidence in the new business strategy. The released claims will see other platinum players coming on board increasing production and creating jobs thereby improving the living standards of Zimbabweans as the country moves to attain the middle income status by 2030.
Infrastructure-wise China extended a US$153 million loan facility for the refurbishment of the Robert Mugabe International Airport. As the nation is expecting a boost in tourist arrivals, the refurbished airport will facilitate smooth flow of air transport in line with international standards.
Another strong pillar of the Zimbabwean economy is agriculture. The sector also got its fair share of loans to boost production. Mauritius domiciled British company the Financial and Commodities Ecosystem (FinComEco), which is fronted by Hirander Misra and Rt Honourable Mark Simmonds, extended a US$1.5 billon to the agricultural sector. When fully implemented, the deal has a potential to create 630 000 jobs.
While many would-be investors are still sitting on the fence pending the outcome of the 30 July harmonised elections, the President’s “Zimbabwe is open for business” initiative is already bearing fruit and is set to yield more after the polls. This is set to improve the livelihoods of Zimbabweans which had regressed over the past two decades under the stewardship of the previous dispensation.