via ‘Arrears strategy boosts investor confidence’ | The Herald November 11, 2015
THE Confederation of Zimbabwe Industries says the endorsement of Zimbabwe’s strategy of clearing its arrears with multi-lateral financial institutions has boosted investor confidence, with several investors already making enquiries for investment opportunities.
This comes when ShoreCap II, an international investment company said the deal struck between Zimbabwe and its international creditors on how the country intends to clear its debt will rejuvenate business relations between Harare and the global community. Zimbabwe’s debt clearing strategy was supported by its creditors last month in Lima, Peru during the annual meetings of the International Monetary Fund and the World Bank.
Zimbabwe intends to clear its arrears to the three multinational institutions, the IMF, ($110 million), the World Bank ($1,15 billion) and the AfDB ($601 million) by the end of April 2016.
“There is quite a lot of excitement around Zimbabwe after the Lima meetings; there is confidence among foreign investors and we are receiving enquiries from Turkey, South Korea and Germany. This is very positive,” CZI president Mr Busisa Moyo said yesterday.
ShoreCap II Representative Mr Franklin Kennedy told The Herald Business that his company was optimistic about Zimbabwe’s prospects. ShoreCap II owns 7 percent shareholding in FBC.
“We had excellent meetings with the governor of Reserve Bank Dr John Mangudya and the Minister of Finance and Economic Development Patrick Chinamasa and we were told of Government’s direction towards economic recovery,” said Mr Kennedy.
“We think some of the adjustments from the political side and efforts towards clearing the debt issues will really open the relations again with the international global community. The population is small but again if you look at the history, look at tourism, all the resources are here, the hotels and the nature that is an added advantage. From an agricultural side, there is hope considering that farmers are sitting on an asset capable of attracting finance for them. Zimbabwe has a potential to grow its economy.
“We see an optimistic picture and there is need for a lot of work and adjustment in thinking but we believe that Zimbabwe being what it is has a bright future. We are fund managers for ShoreCap Limited and we made an investment here in Zimbabwe three years ago in FBC Holdings and we have brought some of our investors into our fund because we have been talking about the country and the investment to them and then they decided to come and see for themselves. So it has been an opportunity for a number of them, some of them getting really connected with Zimbabwe considering that some of them have been or are here for the first time.
In response Minister Chinamasa said Zimbabwe had been on the investment radar for years and has witnessed an increased appetite for investment in various sectors.
“New development will always make some people uncomfortable. Despite some negative publicity about the country in foreign countries aimed at positioning Zimbabwe as a doomed country, this nation continues to enjoy glowing recognition as a propitious investment destination,” said Minister Chinamasa.
Recently, according to the World Bank Ease of Doing Business report — Doing Business 2016: Measuring Regulatory Quality and Efficiency — Zimbabwe moved 11 places to 79 from 90 in respect of getting credit and six places to 81 in terms of protecting minority investors out of 189 countries.
The country has also received various line of credit to support various economic sectors.
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