Zimbabwe is on the threshold of rebounding from the damage done by Robert Mugabe, but strategic geographical positioning is not a guarantee that South African businesses will automatically benefit from our northern neighbour’s economic reconstruction.
Speaking at a recent presentation on Zimbabwe at the Johannesburg Chamber of Commerce and Industry in Milpark, Africa House director Duncan Bonnett urged potential investors to step up their readiness.
“You’ve got to position yourself,” he said, stressing that Zimbabwe’s rapid re-emergence as a regional and global trading partner was already well under way. Illustrating his point by reflecting on the misrule and mayhem of Mugabe’s last decade in office, Bonnett commented: “China and India are still present in Zimbabwe.
They never went away.” Additionally, during a recent trade mission it was noted that countries such as Italy, Canada, Japan, South Korea and Turkey were all in Zimbabwe looking at how they could gain market share, Bonnett said. He added that even Brazil was exploring ways of fostering bilateral cooperation with Zimbabwe – one of these areas being soya farming.
Interestingly, Brazil is poised to take over from the US as China’s main supplier of the legume because of the effect of US President Donald Trump’s tariff war on trade relations with the government of Xi Jinping.
These countries, argued Bonnett, all have a vision to benefit from the rebuilding of Zimbabwe. Alarmingly though, South Africa was conspicuously absent during the trade mission. If it serves as a sign that local investors are slow off the mark to get involved, “a lot of the low hanging fruit would’ve been snapped up by the time you do decide to get involved,” he warned. Of course there are obvious impediments to business in Zimbabwe, such as the court challenge that the ruling Zanu-PF is facing following its recent electoral victory against the Movement for Democratic Change (MDC). But Bonnett believes this impasse will be short-lived.
“Show me a country in Africa where an election hasn’t been contested. “The people of Zimbabwe, the regional community, and the global community all want change, they want to see progress. So I think there will be a softening of positions in the coming weeks,” he said about the stalled inauguration of Mnangagwa as president.
Reform and regulatory uncertainty were also identified as potential obstacles to Zimbabwean re-investment opportunities. Answering a question from the floor, Bonnett made it clear that one of the first barriers to business that had been dismantled after Mnangagwa deposed Mugabe, was the infamous Indigenisation Act which required all businesses in Zimbabwe to be locally owned. It meant investors could not own more than 49% of their own ventures, effectively paving the way for cronyism and corruption as foreign companies battled to remain involved in Zimbabwean business.
“Let’s be clear about it,” Bonnett said – “you can now own your own business as an investor in Zimbabwe.” As to additional restructuring, Mnangagwa had instituted widespread reform at all levels of government, Bonnett indicated.
His sentiments were shared by Harrison Muchenga, senior sales executive at business compliance company Bureau Veritas, who told a packed seminar room at JCC House that it was important for investors to familiarise themselves from the start with new rules regulating investment.
Muchenga was inundated with questions from the floor about issues such as tariffs on steel exported to Zimbabwe, and the repatriation of revenue from that country – a longstanding complaint. He assured attendees that these concerns had been addressed by Zimbabwe’s new government-in-waiting.
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Let’s be clear about it — you can now own your own business in Zimbabwe. – Duncan Bonnett
