WHILE President Robert Mugabe’s state visit to South Africa — after 21 years — was long overdue because of an array of critical issues ranging from immigration to trade which needed to be addressed, it has turned out to be a wasted opportunity after all.
By Dumisani Muleya
South Africa and Zimbabwe not only share strong historical relations and cultural identities, but also close ties and integration such that their economies are now inextricably linked.
Over the years, the nature of their dynamic relationship has been shaped by the various political leaders and events. Strong economic ties were maintained despite sometimes conflicting political dispensations on either side of the border.
Although there have been diplomatic tensions between the two countries mainly due to political troubles in Zimbabwe in recent years, Harare and Pretoria’s relations have been generally cordial since the end of apartheid in 1994.
Given this, Mugabe should have taken the window of opportunity provided by his visit to effectively tackle a series of lingering issues that need to be urgently fixed.
Even though Mugabe and his counterpart, South African President Jacob Zuma, said they had “very fruitful talks” and signed agreements on a bi-national commission, diplomatic consultations, water, customs and trade, a lot more could have been done.
Let’s take, for instance, three critical issues: trade, investment and immigration.
Mugabe could have seized the opportunity offered by South Africa’s growing investment outlays in sub-Saharan Africa to further attract its available capital.
Foreign direct investment (FDI) into Zimbabwe remains awfully low at around US$400 million annually, while South Africa attracts over US$10 billion. As the most sophisticated continental economy, South Africa, now second to Nigeria, is the largest investor in Africa.
Its companies in mining, telecoms, banking and retail sectors, among others, are all over the continent, including in Nigeria. Research shows by 2008, South African companies had shelled out US$8,5 billion into the sub-continent. Its investments spread beyond the traditional southern frontier markets, into West, East and even Central Africa.
FDI by South African companies in Zimbabwe between 2003 and 2013 amounted to over US$1 billion, creating 2 485 employment opportunities in a very difficult economic environment. The firms continue to find ways to deal with Zimbabwe’s hostile climate to maintain their presence in expectation of eventual political change and economic recovery.
South African companies in Zimbabwe include Impala Platinum (which owns Zimplats), Standard Bank (Stanbic), Old Mutual, Nedbank (MBCA), Tongaat-Hullet, Pretoria Portland Cement and Group Five, among many others.
About 27 of South Africa’s biggest listed companies have operations across the Limpopo, and a number are also listed on the Zimbabwe Stock Exchange.
Mugabe could have taken advantage of this trend by effectively dispelling the perception Zimbabwe is hostile to foreign investment and offering serious incentives around policy, regulatory, labour and tax issues.
In other words, he could have addressed the ease of doing business in Zimbabwe which keeps cropping up whenever investors make enquiries. This implied properly clarifying the toxic indigenisation policy, which he dismally failed to do.
But instead, he dwelt on history, Rhodes’ statue, Tony Blair, UN reform, Libya, Iraq and other such red-herrings.
Only by attracting investment and reversing the current massive wave of de-industrialistaion could Zimbabwe narrow the huge trade deficit with South Africa.
Between 2005 and 2014, South Africa’s exports to Zimbabwe grew by 247% from R7,1 billion to R24,8 billion, while Zimbabwean exports to South Africa fell by 54,7% to R2 billion from R4,4 billion reported in 2005.
On immigration, Mugabe also badly failed to seriously tackle the problem of growing illegal exodus and resultant xenophobic attacks on Zimbabweans. He was pathetically apologetic, not helpful. Instead of adopting a candid position, he was rather sheepish, probably because he knows his misrule is root cause of the problem, and didn’t deal with nuances of the issue. In the end his visit was a missed opportunity.