via Zimbabwe has all elements of healthy economy | Opinion & Analysis | BDlive by Andrew Robinson June 05, 2014
ZIMBABWE is never far from the headlines of South African newspapers. This is understandable. We have close ties to our northern neighbour and SA has provided a home to fleeing Zimbabweans, both white and black, for decades.
That there are highly complex political, economic and social problems in Zimbabwe is beyond doubt. Its agricultural and industrial bases have been all but destroyed and its currency was discarded, to universal acclaim, in 2009 because it was just too degraded to be rescued from years of hyperinflation.
But while Zimbabwe’s past will shape its future, it need not define it.
I, for one, see the country as a slumbering giant about to awaken and I believe that when it does, it will rocket into a new era of prosperity that will fundamentally redefine our region. This isn’t something I am saying lightly. I am not shouting the odds from the sidelines safe in the knowledge that if I am wrong I have nothing to lose. I head up a group of private-sector investors who are looking over the year to inject more than $100m into Zimbabwe. I cannot disclose the details of the deal as it is at a sensitive stage, but this substantial investment is being made on the basis that the returns are there to be made and that we will be able to get the money out of the country again when and if we need to.
We do not for a second ignore the downside risks, which include political uncertainty, liquidity challenges and very high real interest rates on short-term credit, ballooning public-sector wage bills, ailing infrastructure and an unreliable power supply.
Rather, we put more stock in pent-up demand, an educated population, increasingly pragmatic policy makers and wonderful commercial opportunities — not only is much of the land lying fallow, so too is the industrial infrastructure.
We are taking a long-term view. History has shown that entrepreneurs make their money when everyone is running and we believe that, as investors, now is the time to be getting in.
I have visited Zimbabwe more than 44 times in the past 18 months and what I see is different from what the media are communicating. The reality is that the country has all the underlying components of a healthy economy. While its human and physical capital have been degraded over the past 20 years, I have seen a rising corps of sensible, educated and ideologically pragmatic business people, bureaucrats and politicians coming through.
Take the case of the policy on indigenisation. The latest elections were fought around a campaign of indigenisation, resource nationalism and job creation. Promises were made that locals would be protected from, and preferred to, foreigners. Certain sectors, such as retail, were demarcated as being entirely for locals, while others, including financial services and banks, were to be majority owned by black Zimbabweans.
In March, new Indigenisation Minister Francis Nhema went out of his way to say there would be no moderation of the indigenisation drive under his watch. His appointment had been seen as indicating there would be some. However, he later said the government would be prepared to be more flexible with banks if they agreed to lend more to local businesses.
There is also increasing contact between the state and the Commercial Farmers Union, which represents the remnants of the once vibrant white farming community, and real partnerships between the state and farmers that will restore the country’s “breadbasket” label are becoming possible again. These talks will probably not see title deeds returned to farmers, but could see them back on the land with the security of tenure needed to recapitalise the industry and return the land to large-scale farming.
I am also heartened by the appointment of the former CE of banking group CBZ Holdings, John Mangudya, as governor of the Reserve Bank of Zimbabwe. Because of his commercial-banking pedigree, he will be the right man to steer monetary policy.
The creation of a stable, understood and consistent investment environment and a reinvigorated agricultural sector will give Zimbabwe the boost it needs if it is to reindustrialise and grow employment again. Downside risks undoubtedly remain and, in investing as in life, there are no guarantees that things will work out the way we predict.
But we believe that a positive outcome is far more likely than a negative one — and we are betting heavily, using our own money, on being right about this.
• Robinson, an entrepreneur and private equity investor, is CEO of Siand.
Everybody knows that Zimbabwe has huge potential, but I cannot see any real hope of this being developed whilst the present “government” remains.
Also, fish will ride bicycles in Zimbabwe. Just a small note, no monetary policy exists as we’re using other peoples’ currency.
Well said Robinson, not only do we agree , we see the same.
Where are his zim investments ? Put your money where u mouth is.
Sup with the devil at your peril.
I can by a few writers and have a glossed up article on Zim economy hoping people will by in .
Just look at the recent court case on land.
I rest my case.
I mean buy.
As Zimbabwe is home I will always wish the best to happen for the country. All I can do of course is wish. We all know that if they were horses even the beggar would ride. Funganayi Mutamiri like the writer came on this website with the same jargon which thus far has come to naught. There is no one that is stupid here. The problem is not and will never be investment. Even if you invest one billion into the Zimbabwean economy as long as there is lawlessness, corruption,racism ,tribalism, regionalism and poor policies by the Government all this will mean nothing. You see a sleeping Giant. I see a Giant whose legs have been cut off and has now turned into an insignificant dwarf. There are three ways that Zimbabwe can try to get out of it’s dilemma. 1) The renewal of Zanu pf right now (we all know that this will not happen) 2 The removal of Zanu pf(we know where we stand with that) Divine intervention (That will happen) In other words the free fall of the economy is on Zanu pf’s hands.
Sounds great but no where near reality mr Roberson invest your money in a sea of lies broken promise s corruption theft ect, but hey you been here 40 odd times in 18 months. You know better than the 3 million honest Zimbabwean who have been forced 2 leave their country of birth to earn a living else where. Good luck mr Roberson would like to see you in a few years time,to help you count what’s left of your 100 million dollars it won’t take long.