Investors will be taking a closer look at Zimbabwe after the recent resignation of long-standing president Robert Mugabe. A once-functioning southern African economy, Zimbabwe promises a return to its status as a sound and solid frontier market space following a coup-that-wasn’t-a coup.

Semantics aside, Emmerson Mnangagwa’s inauguration as Zimbabwe’s new leader brings with it the potential to turn the country’s economy around. Its decline, as a result of stratospheric inflation, was such that Zimbabwe’s Reserve Bank had to issue Z$1000bn notes.

“The transition from Mr Mugabe to Mr Mnangagwa could mark a major and positive shift and put Zimbabwe back on the foreign investor radar,” said Hasnain Malik, head of equity research at Exotix Capital, an investment bank with a frontier and emerging markets specialism.

FDI into Zimbabwe could revive the country’s economic fortunes, and investor confidence will be essential. Ease of doing business will be key to potential investors looking for opportunity in Zimbabwe.

The presidency’s own website is mindful of the pressing need to create a positive business environment for both local and international entrepreneurs. The ZIM Asset Blue Print 2013-2018, launched by Zanu PF after the last election and now in its fourth year, said: “When we look at our competitiveness, we see that we have a skilled population and a relatively well-developed infrastructure but we are not receiving the FDI flows that we expect, hence the need to reform in order to reduce the cost of business and also to ensure that we have clearer investment policies that facilitate investment.”

The World Bank’s data from June 2017 ranks Zimbabwe at 159th out of 180 countries for ease of doing business. “Many of the ingredients of a great frontier market are in place in Zimbabwe: human capital, infrastructure, natural resources and diaspora," said Mr Malik.

Mr Mnangagwa’s presidency has given assurances that a peaceful political transition will develop. Of equal import will be how the economy expands from its current stagnant condition. Zimbabwe’s central bank, the Reserve Bank, on its website said: “The lower supply of US dollars (foreign dollars) is attributable mainly to limited access to foreign finance, declining foreign investor confidence which has reduced capital flows.”

The African Development Bank’s economic outlook for Zimbabwe is that the economy “has experienced cash shortages owing to rising informality, fiscal revenue underperformance, declining capital inflows and export receipts, a high fiscal and public indebtedness; external imbalances and capital flight”.

Old Mutual is one of southern Africa’s longest established asset managers. In its October 2017 monthly economic brief, it reported: “The IMF classifies Zimbabwe among countries in a ‘fragile situation’, citing the need for political stability as well as reforms on governance, public debt and exchange rate frameworks.”