Foreign investor interest in Zimbabwe has picked up since a power-sharing government was formed in February, but it is not yet translating into investment on the ground, Zimbabwean officials said on Saturday.
“Since February … we’ve seen a significant increase in the level of investment inquiries and project approvals,” said Richard Mbaiwa, head of the Zimbabwe Investment Authority, the government’s investment promotion agency.
“But of course investment … is not something that happens overnight. This interest is exciting but it is still to be translated into actual investment on the ground,” he told a Zimbabwe investment conference in London.
Investor interest was coming from China, Pakistan, India, Mauritius, South Africa, Kenya, Nigeria, Britain, the United States and Canada, he said. Mining attracted most interest, followed by manufacturing, tourism, services and construction.
Veteran President Robert Mugabe formed a national unity government with Prime Minister Morgan Tsvangirai in February to end a political crisis that shattered the once prosperous southern African nation’s economy.
Emmanuel Munyukwi, chief executive of the Zimbabwe Stock Exchange, said there was investor interest in Zimbabwe but people were mostly just “watching the situation”.
“There is a lot of interest in mining because the potential there is huge,” he told Reuters. “But (for) mining, you need technology, you need capital, and we don’t have those things.”
NEED FOR POLITICAL PROGRESS
Hardly a week went by without him seeing a fund manager from Europe or America, he said.
“There is a ray of hope, but it’s all contingent upon the politicians sorting out their problems. If the politicians move fast, business can move very, very quickly,” he said.
It was time for the rest of the world to re-engage with Zimbabwe, he said, pointing to the country’s mineral wealth. He urged Britain and the United States to resume aid to Zimbabwe.
Western donors are waiting to see more reforms in Zimbabwe before they resume large-scale development aid.
Niels Kristensen, head of Rio Tinto’s (RIO.L) diamond unit in Zimbabwe, told a mining conference there last week the country would not see new investment in its mining sector unless uncertainty over a mining law and fiscal policy were resolved.
An empowerment law adopted last year compels foreign-owned firms, including mines and banks, to give up at least 51 percent control to local people.
Munyukwi said he disagreed with the local ownership law, saying the most important thing was to create wealth, jobs and infrastructure.
The Zimbabwe Stock Exchange, with a current market capitalisation of around $3.5 billion, began denominating trades in U.S. dollars in February and Munyukwi said it would be a retrograde step to go back to the Zimbabwe dollar in either stock exchange trades or the broader economy