LAST week Chinese chairman of the Council for Promoting South-South Cooperation, LV Xinhua and his delegation visited Zimbabwe to assess the country’s business environment and investment opportunities.
The Chinese met Vice-President Emmerson Mnangagwa, who was acting president, to discuss investment issues. Chinese Ambassador to Harare Lin Lin, Chinese embassy economic and commercial adviser Li Yaohui, Finance minister Patrick Chinamasa, Samuel Undenge (Energy), Mike Bimha (Industry and Commerce), Obert Mpofu (Transport), Walter Chidhakwa (Mines), Joseph Made (Agriculture), Christopher Mutsvangwa (War Veterans) and the 18-member delegation exchanged notes frankly on investment matters.
Mnangagwa briefed the Chinese on Zimbabwe’s social and economic situation to give them insight from a government perspective. He said Zimbabwe was keen on Foreign Direct Investment (FDI), especially from China.
After Mnangagwa’s remarks, the Chinese with LV in charge thanked government for welcoming them and indicated they were looking for investment opportunities across a wide range of economic sectors, including but not limited to mining, construction, pharmaceuticals and manufacturing.
Subsequently, LV tackled the elephant in the room: Zimbabwe’s hostile business environment and ease of doing business. He made it clear even if the Chinese want to invest in the country government must first improve the business climate and ensure barriers to commerce are removed to retain their vast investments locally and to attract new capital.
The Chinese also said Zimbabwe must remember it is competing with its neighbours and other countries for investment.
This was interesting, coming as it did from the Chinese — Zimbabwe’s “all-weather” friends as officials say — because all business delegations and investors have been giving government the same message. Whether it’s the Americans, the British and other Europeans, Russians, South Africans or Chinese, the mantra is the same: Create an enabling business environment if you want serious investment.
In fact, recently Zimbabwe’s own state investment agency demanded urgent policy and legislative reforms to attract FDI, which has remained stagnant at USS$400 million annually compared to billions for neighbouring countries in the past two years.
The World Bank has ranked Zimbabwe 171 out of 189 countries on its 2014 ease of doing business index, something attributed to negative perceptions about the country’s disastrous policies, especially the land reform and indigenisation programmes. Bad policies and inconsistencies have widely been blamed for keeping investors at bay.
Retrogressive politics and leadership failures have also been cited as responsible for economic regression, poverty and suffering.
Zimbabwe Investment Authority CEO Richard Mbaiwa recently told a parliamentary committee that the country continues to lag behind its regional peers such as Mozambique and Zambia whose FDI inflows have risen to US$5 billion and US$2 billion respectively because of poor policies and lack of reforms.
Political stability, policy consistency and investor-friendly reforms are critical to ensure investment, recovery and growth. That’s what the Chinese also said. Authorities must now listen, at least for once for a change.