Financial Matters: Tinashe Kaduwo
How do we convince foreigners to invest in our country if we do not even talk about our own domestic investment?
The country’s obsession with foreign direct investment, if we are not careful, may come at the expense of our indigenous entrepreneurs. In every circle, people are focussing more on attracting foreign direct investment (FDI), ignoring the role of domestic investment. Zimbabwe has some good local entrepreneurs who need the same treatment as foreigners. Interests and concerns of our local business are most of the times overlooked due to the emphasis the country places on FDI. Most of the time, local business leaders are treated with suspicion, while the red carpet is rolled out for foreigners, who most of the times have just come to scout rather than commit investment.
Those in positions of power quickly schedule foreigners’ appointments while locals are often set aside. One reason for the sidelining of local entrepreneurs could be the mistrust in official quarters. This confidence gap could be addressed by granting due priority to the country’s businesspersons in consistent reforms and incentives. It is the local businesses that build and sustain an economy. Foreign capital usually makes a swift exit in times of trouble and the country has witnessed this in the past when the country experienced an exodus of foreign companies due to economic woes. Compared to foreign investors, our local entrepreneurs deserve better deals as they re-invest their wealth and spend considerable share of their profits within the country apart from paying tax.
As Zimbabwe is now open for business, it should be our local entrepreneurs who should be luring their foreign counterparts due to their success stories. The local and international media should be awash with the Zimbabwean businesses’ success stories and that would help attract investment. Documentaries on our companies that have weathered the storm of economic meltdown should be aired on national television. In fact, it is high time the country dedicated business TV channels that present news reports and documentaries about local businesses and other stakeholders along with the spectacular journey of senior corporate executives. This will help send the right message to the right entrepreneurs.
The international audiences are yet to hear about the achievements of our corporate holdings directly from them. They want, for instance, to hear how listed banks such as ZB survived the Western sanctions, while some big names such as AfrAsia Bank failed.
Zuva Petroleum became a giant when BP and Shell left the country. The world is interested in how our businesses emerged successful in the face of challenges of both security, energy and financial uncertainties caused mostly by ever simmering political tremors. Statistics of domestic investment are important as they reflect the level of confidence of local entrepreneurs in the economy. It is good that President Emmerson Mnangagwa appointed a team of advisors, with some good faces from the private sector. I hope the entrepreneurs who are part of the Presidentian Advisory Council will emphasise the role of local entrepreneurs. The country has quite a number of entrepreneurs who are now plying their trades in other countries. It is, indeed, easier to call your own man back home than attract a total stranger. The authorities need to know that by wooing international entrepreneurs, they are playing down the success odysseys of our own businesspersons.
These are the enterprises, in most cases, that have helped sustain or limit the damage to the economy in all these years of trouble. When the financial services sector, for instance, was under pressure from both domestic and foreign issues, it is the local and regional institutions that extended the most helping hand.
It is time we balanced our diplomatic focus to include our own businesspersons, in order to achieve desired objectives of attracting foreign investors. The moot point is to increase the satisfaction level of native businesspeople, inextricably linked with business sentiment, in order to persuade foreigners to launch business operations in our homeland. After all, the local businesspersons are the prime stakeholders in the ecosystem and a central party to the charter of the economy.
Kaduwo is a researcher and economist, contact email@example.com.