SA firms make inroads in Zim

Godfrey Marawanyika

DESPITE the high political risk associated in investing in Zimbabwe a number of South African firms have shown keen interest in investing locally. If the enquries do materialise into inve

stments, Zimbabwe’s southern neighbour is set to maintain the balance of trade heavily tipped in its favour.

The SA Trade and Industry department director general Allister Ruiters, was last week quoted in the South African publication This Day, as saying despite Zimbabwe’s negative image and economic problems, a number of their firms were interested in coming to the country.

“I have been amazed at how many inquires the department has received from South African companies that are interested in wanting to invest in Zimbabwe,” he said.

“Maybe they see this as an opportunity to go and invest against the grain and get in there before others,” Ruiters said.

Since 1999, a number of firms who had initially shown keen interest in investing in Zimbabwe either put their projects on hold or shifted the investments to other neighbouring countries.

Local firms were not spared either in the risk perception from both regional and international firms, as they were asked to pay an extra 5% political risk charge on all imports.

The latest interest by the South African firms comes against a backdrop of that country’s political leaders “quiet diplomacy” towards Zimbabwe as trade figures between the two countries indicate that trade is heavily tipped in favour of South Africa.

During the first nine months of last year, Zimbabwe imported goods worth R4,8 billion, ahead of Mozambique’s R4,3 billion.

In turn South Africa imported goods worth R1,9 billion, a R300 million drop compared to the previous year.

The decline in trade volumes between South Africa and Zimbabwe has largely been caused by the decline in production levels from local companies whose operations have largely been handicapped by reduced working hours.

A number of South African firms are already established locally.

Some of the firms include Anglo-American, Stanbic, Murray and Roberts, Edgar’s, Barloworld, SAB Miller and Metallon Corporation. Over the past two years, two South African firms, Impala Platinum and Absa bank have increased their stake in the country.