Years of underinvestment means that there are lucrative opportunities in Zimbabwe’s infrastructure and mining sector, according to George Guvamatanga, managing director of Barclays Bank Zimbabwe. He said that although Zimbabwe’s business environment continues to score low on the World Bank’s ‘Ease of Doing Business’ survey – it ranked 170th out of 189 countries in the latest report – there is a considerable difference between the government’s political rhetoric and the realities of operating in Zimbabwe.
Speaking in London at a conference hosted by Business Council Africa (BCA) in late January 2014, Mr Guvamatanga assured investors that there remains a marked distinction between the ruling elite’s political rhetoric and the actual impact that local policies have on foreign businesses, and he said that firms’ assets will be safeguarded when operating in Zimbabwe. The conference was part of a tour by a Zimbabwean business delegation across Belgium, France and the UK. The private sector initiative aimed to reignite foreign investor interest in Zimbabwe.
Mr Guvamatanga was keen to stress that while the ruling government has decided to implement indigenisation policies, they would be applied in a “flexible” manner. Thus, rather than scale back on any prospective ventures, Mr Guvamatanga assured investors that their assets in Zimbabwe will remain safe and foreign firms will continue to be allowed to repatriate their profits from the country.
In mid-February 2014, the EU eased a select set of sanctions against Zimbabwe, these included lifting a visa ban and asset freezes against members of Zimbabwe’s ruling Zanu-PF party. But, the country continues to face a host of sanctions from countries such as the US, which bars American firms from investing more than $50,000 in Zimbabwe. David Lamb, the chairman of BCA, said that these limitations have been overstated, adding that UK businesses should not let the country’s fractious politics prevent them from seeking opportunities there. “Don’t let pride get in the way of sense and let [the country's president] Robert Mugabe score a quick point… let’s put politics to one side and engage with Zimbabwe,” he said.
Pointing to the government’s decision to rehabilitate the country’s deteriorating infrastructure, Mr Guvamatanga said that prospective investors could earn significant returns if they invested in such long-term projects. The government’s decision to seek $15bn-worth of FDI for energy, transport and water projects, as well as an additional $7bn to increase production in the country’s mining sector, means that mining and infrastructure will be significant sources of growth in coming years.
How far these statements will go in persuading investors of Zimbabwe's investment potential, is yet to be seen. It is likely that many businesses will still remain cautious about investing in the country, especially after a decision by the central bank governor, Charity Dhliwayo, made it the only country in the world that accepts nine different currencies as legal tender. A decision that has had huge practical implications for businesses operating in the country.