Faith Zaba ZIMBABWEAN diplomats in Turkey have been engaging firms in that country to invest in several sectors, including mining, agriculture and infrastructure development.
To date 15 memorandums of understanding (MoUs) have been signed in education, health, ICTs, aviation, rail and agriculture.
In an interview on the side-lines of the Turkey-Africa Media Summit in Istanbul, Zimbabwe Ambassador to Turkey Alfred Mutiwazuka said: “We want to ensure that we have a legal framework in terms of our cooperation with Turkey. This is to say that in our business dealings, we want to ensure that Turkish investments are well protected by this legal framework”.
However, there has not been much movement since a delegation from Turkish industries attended a Confederation of Zimbabwe Industries congress three years ago.
While Mutiwazuka says it has to do with the Covid-19 pandemic, we must, however, bear in mind that Zimbabwe came last in Africa and eighth worst globally, according to Fraser Institute’s Investment Attractiveness Index, which assesses various investment destinations globally.
All respondents claimed that the uncertainty regarding the administration, interpretation, or enforcement of existing regulations, the country’s legal system, its taxation regime, its infrastructure, trade barriers, its political stability, and security were major areas of concern that discouraged investment.
Zimbabwe needs to address these issues if it is to attract more foreign direct investment (FDI).
FDI to Zimbabwe doubled to US$745 million in 2018 from just US$345 million in 2017 before plummeting 62% to a paltry US$280 million in 2019. According to the United Nations Conference on Trade and Development’s 2021 World Investment Report, FDI inflows declined significantly to US$194 million in 2020.
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Consistency in policy pronouncements and implementation are key to building confidence with investors. Government must implement long term monetary policies that guarantee business certainty.
International investors possess a plethora of investment options in the form of asset classes and projects. The administration in Zimbabwe should know that Zambia, Malawi and even South Africa are competing for the same share of the investor’s pocket. In other words, Zimbabwe’s economic demise has been — in a way — an advantage for other Southern African states.
To be an attractive investment destination, Zimbabwe needs to create an investor friendly business environment. It takes just six hours to open a business in Rwanda online. No wonder it ranks the highest in Africa on the Ease of doing business Index. Zimbabwe ranks 140 out of 190 countries.
It must introduce tax free holidays and establish functional special economic zones (SEZs). This was a tried and tested model for China’s rapid growth and investment rush. The first SEZs were established in 1979–80 and included Shenzhen, Zhuhai and Shantou in Guangdong, and Xiamen in Fujian province. With the addition of an SEZ in Hainan in 1985, there were five major SEZs.
The Southern African state must deal decisively with corruption. Zimbabwe has lost US$100 billion to corruption since 1980, according to Transparency International Zimbabwe. The country ranks 157 out of 180 countries, worse than Nigeria where corruption is endemic.
President Emmerson Mnangagwa has echoed the need to curb corruption. Investors will need to see more of his crackdown on corruption that has clogged the economy. More arrests, demotions of corrupt leaders, seizure of stolen assets and a review of the land redistribution process will do the trick!
Key is international re-engagement and respect of property rights: land, mining claims, etc. It must invest in the digital economy. Rwanda, Nigeria and Egypt lead in IT infrastructure and receive the largest chunk of start-up investment, according to the Briter Bridges report.
Zimbabwe needs to focus on competitive advantages: There is no Silicon Valley in Zimbabwe, but agriculture can grow the economy and mining can generate the cash.
The advantage is that Zimbabwe has arable land and vast mineral resources – most of which are unexplored.
The government must remove capital movement constraints to enable investors to move money in and out of the country through the banking channels. This will ensure banks transfer dividends.
There is need to implement a managed floating exchange rate or proper market driven interbank rate. This reduces foreign exchange losses and stabilises the foreign exchange market.
Zimbabwe must do what other emerging markets are implementing to attract foreign and regional partners to survive in the new global economy.
