Arrears clearance to restore Zim’s status in the world 

Source: Arrears clearance to restore Zim’s status in the world – herald

THE European Union (EU) is set to host the inaugural EU-Zimbabwe Business Forum this month in partnership with the Zimbabwe Investment and Development Agency (ZIDA) and the Confederation of Zimbabwe Industries (CZI). The event represents a significant milestone in strengthening economic, investment and trade relations between Harare and Brussels. Below are excerpts from an interview between Zimpapers Radio’s LINDA MURIRO and EU Ambassador to Zimbabwe JOBST VON KIRCHMANN that was aired on the “Muriro on Monday” show on Star FM.

****************

Q: You are about two-and-a-half years into your tour of duty in Zimbabwe. How has that been for you?

A: I think it’s a very interesting journey; and I think we have developed a very solid relationship with Zimbabwe.

In political terms, I think we are a reliable partner; we have been there all the time and we will be there all the time as a partner.

We saw this in the political dialogues we had in the past that we are able to have very respectful interactions. We might not always agree, but I think that is part of it as well.

But it became a very, very solid relationship. In economic terms, I think it’s thriving, it’s going forward, and you just mentioned the first-ever EU-Zimbabwe Business Forum, which I think is just one element among many to show that on the investment, economic and trade front, we have really driven this relationship forward.

Q: How would you describe the current state of EU-Zimbabwe relations in terms of economic cooperation? We saw the EU at the just-ended ZITF (Zimbabwe International Trade Fair) and we have the upcoming EU-Zimbabwe Business Forum. How are the relations on the economic front?

A: As I was saying, I think I described it as solid. When I say solid, I mean we have a solid base, and the solid base, for example, is marked by the Economic Partnership Agreement (EPA). We have a free trade agreement between Zimbabwe and the European Union, and that is a solid base.

Then, I think the European Union, and here I am talking not only about us but also the EU member states and our bank as team Europe, we collectively want to move forward with the private sector in Zimbabwe and also the European private sector.

I think that is part of what we call the Global Gateway — bringing in the private sector as an engine . . . because, as I often say, it’s not the European Union in Zimbabwe that is creating jobs or investing money: it is the private sector doing that and governments are a facilitator or enabler and we are a partner.

So, I think collectively, we are moving forward on that agenda and that has also strengthened the economic relationship with Zimbabwe.

Q: I would like to take you back a bit. I am sure before you came to Zimbabwe, there were perceptions that you had; those perceptions vis-a-vis the lived experience after two-and-a-half years into your tour of duty in Zimbabwe. How has that been?

A: I think it’s different in the sense that you don’t know Zimbabwe.

Often, I think, uh, Zimbabwe’s reputation is overshadowed by a lot of things, which are maybe not in favour of Zimbabwe.

But when you live in the country, you discover actually it is a great country with great people; very educated people and friendly people.

I think it’s a very pleasant country to be in and also maybe you better understand the context . . .

That is why often I say when companies come from abroad from Europe, for example, it’s very wise to work together with a local company because you must know the local context. You cannot just come and believe that you know everything . . .

So, I very profoundly believe it’s important for anybody who wants to invest or trade with Zimbabwe to come here and to explore what Zimbabwe is.

Q: But in terms of the other global audience, what more can the country do to address that perception which you say is overshadowed by negative things?

A: I would start with something Zimbabwe is actually currently doing, and His Excellency, President Mnangagwa, has put underway an arrears clearance process.

That sounds very technical.

Zimbabwe currently has debt and arrears a bit over US$21 billion and that prevents Zimbabwe from getting access to sovereign lending.

Now, His Excellency has put underway a process to, in the long term, get rid of the debt and arrears to pave the way for sovereign lending.

In reality, that process potentially brings Zimbabwe back in the international community as a fully respected partner.

So, whenever I have a moment, I commend that process as a very good process, and I really hope that in the foreseeable future we will be able to move forward because I think that is a key process; a key process which goes beyond arrears clearance.

It is much more than that and I think that’s probably also the reason the President attaches so much importance to it.

Q: Now, turning to the EU’s support to Zimbabwe. Can you elaborate, Ambassador, on the EU’s support for Zimbabwe’s economic reforms and what conditions or expectations are attached thereto?

A: Now, my reply will probably surprise you. There is no expectation because we are not pushing for economic reform or anything.

I think the economic reforms Zimbabwe wants to undertake as a sovereign country are probably being done for two reasons.

First of all, to create what I often call a fertile environment for the private sector to invest and thrive.

Secondly, because Zimbabwe has . . . the National Development Strategy 1, which committed itself to do certain economic reforms in arrears clearance.

So, it’s a Government-led process.

It’s not something we suggest or we impose or we have any conditions to.

I would say we are there and we look at it and, as I said before, it’s applaudable that economic reforms are undertaken.

I think we, of course, hope that they will be successful and that, for example, Zimbabwe, in the foreseeable future, will be able to sign a Staff-Monitored Programme with the IMF (International Monetary Fund).

That is something which was just discussed in Washington . . . the Minister of Finance (Prof Mthuli Ncube) was there, the World Bank was there . . . so we hope that will be coming soon.

But it’s a sovereign decision of the Government of Zimbabwe.

Q: How far have Zimbabwe and the EU gone in the implementation of the Economic Partnership Agreement?

A: So, on one hand, we have gone very far and on another hand, we haven’t gone far enough.

I would say because the Economic Partnership Agreement has been in place for quite a while and it allows Zimbabwean companies to export duty- and tariff-free to the European market. It does actually not allow exactly the same for European companies.

European companies can only export to Zimbabwe around 80 percent of products; quite a number of products are accepted, ranging from beverages to cars to a lot of other things. But that’s actually fine with us.

So, I think when I look at the trade figures over the last couple of years, it’s been quite successful because it is continuously growing. The European Union today is the biggest buyer of horticulture products (from Zimbabwe).

That’s, I think, something amazing.

So, there is a huge interest in the European Union to buy from Zimbabwe and I think we have also seen an increase in imports. We see that Zimbabwean companies are buying machinery from several EU member states.

I think that’s also positive.

So, somehow, we have reached, I think, fourth or fifth place in the trade statistics, which is good.

But, on the other hand, I think it’s not good enough. When I go around and talk to a group of companies I haven’t seen before, I always find at least two, three that say they have never heard about the free trade agreement or an EPA.

So, they simply do not know that they can export duty- and tariff-free to the EU, or that they can import a lot of goods from the EU tariff- and duty-free.

And I think that’s something I really would like to work on and I am currently actively working on it.

It could be information; it could be seminars; conferences or the EU-Zimbabwe Business Forum. These are all means to broaden the knowledge about that.

And I hope . . . in the foreseeable future, we will hit the US$1 billion mark in terms of trade volume.

Q: Now, moving on to the EU-Zim Business Forum, Ambassador, what are the primary objectives that the EU seeks to achieve?

A: That, first of all, it’s the first-ever EU-Zimbabwe Business Forum.

What does it mean?

Why we are setting that up?

Because we feel the time is ripe and there is an opportunity for European companies to come here and they could look into opportunities in Zimbabwe.

But we also believe, like what I just said, there is room for increasing the trade between Zimbabwe and the European Union. Let’s not forget that the European Union is the biggest trade bloc in the world, with 27 member states and 460 million people. It’s enormous.

So, our expectation is that we have an opportunity for European companies there to do a lot of match-making.

I believe Zimbabwean companies and European companies should work together, because for a European company to come here and do a grassroots development, I think it’s not so easy. So, you need a local partner.

I believe it is interesting for the Zimbabwean private sector to meet, for example, financial services providers who do equity funding and others because there is a shortage of capital in the market.

So, the whole seminar is, first of all, built for businesses. I really tried to keep any institutional part in that forum as small as possible because I know out of experience that if you have a company, you are interested in the facts — what do I need to know for investing in Zimbabwe? How do I get my money in and how do I get my money out?

What paperwork do I have to do and who are my potential contact points?

So, we try to make it as practical as possible.

And then secondly, I think we did a fantastic job together with ZIDA and also CZI, ZimTrade to identify value chains which are good for Zimbabwe and the European Union.

So, we have identified three groups of value chains which are mutually beneficial. The first one is horticulture, agriculture and agro-processing.

The second is renewables and the third one is the mining value chain.

And these are three value chains where there is mutual interest on both sides.

And I feel there is good interest and a good chance also to do some match-making between European companies and also local companies.

Q: How does the EU plan to ensure that the forum does not just benefit large corporations but also women and youth entrepreneurs?

A: So, first of all, I don’t know exactly who will, at the end, participate.

Of course, because we still have a couple of weeks to go . . . I don’t think such a forum is essentially for the very big companies to start with. Because if you are a very big company, then you have your own network and you have your own context.

You don’t necessarily need a business forum to learn about it. I think the business forum in itself is probably addressed more to the mid-range of companies to start with.

So, I don’t think it is a problem that there will be only big companies because it’s more for the companies that might not have a specific international investment department.

For example, they would come to a business conference because they are interested in learning and getting a crash course on what it means to invest in Zimbabwe and do trade with Zimbabwe. So, I think there is no real competition from the big ones.

Secondly, all our programmes have a specific focus on youth and women.

And then, during the forum, we have the International Youth Business of Africa as a specific programme that helps startups, in particular women and the youth, with capital to grow and to help.

So, there is a lot of focus also on the youth, on women.

Then let me give you just one example: a couple of weeks ago I signed an on-lending facility. On-lending means our bank, the European Investment Bank, has made available €20 million. We signed with Stanbic for on-lending.

That means Stanbic Bank is able to give a loan with a longer tenure, up to seven years, with a lower interest rate, and the focus is women and SMEs (small and medium enterprises).

Q: Ambassador, the EU participated at this year’s edition of the Zimbabwe International Trade Fair. How would you assess your participation and were there any notable successes or challenges?

A: I think it’s not the first time we were participating; it is the third time.

We started small three years ago and then got bigger and bigger, and I think it’s a growing success. I must say the ZITF in Bulawayo is a fantastic platform.

It’s called the Zimbabwe International Trade Fair, but it’s actually much more than a trade fair.

It’s a platform for exchange, for meeting people. Companies can meet others, et cetera. And if I look at our own growth as EU, I think we started with two or three member states a couple of years ago; then we had five and this year we had eight.

We have more and more companies.

I must say also we were originally thinking perhaps to do the EU-Zimbabwe Business Forum at the ZITF, but then when we tested the waters, we saw there is actually quite an interest in Zimbabwe as an investment destination.

So, we did a standalone event, but to tell you that also there was more presence of companies at our stand this year.

They were quite pleased with the with the traffic, with the people coming and with the exchanges they had with other companies.

So, I think it’s positive.

I also am very proud that we won for the third time a gold medal this year for the best engagement in trade and investment.

I think that’s very rewarding, and I must honestly say we do a lot for trade and investment with the Zimbabwean private sector.

Q: And what feedback have you received from those eight member states and the EU businesses that participated and how does that form a foundation for future engagements?

A: I think it was really positive.

For example, there was a Swedish company that specialises in battery-powered tools.

They had a lot of traffic and interest in their products, which went well beyond their expectations.

The same, I think, for a Belgium company that specialises on lead lighting, lighting and outdoor lighting.

I think they had a huge interest as well.

So, I think, yeah, the companies that participated were very satisfied.

Then we also figured out that we had quite a lot of European companies as well which were spread out in other pavilions, which were bigger ones . . .

I was joking and said maybe one day we must have the entire pavilion with the European companies and that would be fantastic.