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| President Emmerson Mnangagwa speaking at the World Economic Forum in Davos: Image Credit WEF |
Zimbabwe has been mired in deep problems that have manifested themselves economically and politically, for so long that most people are desperate for a way out. Against all hope, people still long for a singular political hero, a cataclysmic, fortune-turning event, a decorated rescue party from the international community, or an accomplished, yet exiled businessman (read Strive Masiyiwa) to rescue the country from the clutches of longstanding economic and political morass. Just anything to change people`s lives for the better!
As if to make the wait for Zimbabwe`s “messiah” – whoever or whatever this will be – more bearable, we seem to have fallen into the habit of telling ourselves some situational untruths with joyful abandon. Not only that, but we seem all the more eager to actually believe these fallacies that have little or zero attachment to reality. Consider the following:
“Zimbabwe is open for business”
Having to repeatedly mention such phrases to all and sundry, is the first and very telling indicator that an economy is not actually open for business. Just like how a man who daily stands atop a table in his house and shouts to his wife and children until his lungs give out, “I am the man of this house,” so is the situation Zimbabwe finds itself in. Such actions actually reveal the glaring failures of the husband to be a leader and father of the house.
In Zimbabwe`s instance, this reveals the failure of the country in being a destination favoured by investment capital. Making Zimbabwe attractive to capital will not happen by chance or through meaningless platitudes, however sweet to the ear they may be. Practical policy shifts, that make it easy for businesses to set up shop, trade meaningfully while their property rights are protected, and an environment that smoothens out the repatriation and/or reinvestment of profits is what curries favour with capital.
For instance, the United Arab Emirates (UAE) recently made a decision to freeze all federal government fee increases for the next three years, in an effort to improve the competitiveness of the UAE, and attract foreign investments. These are the sort of pragmatic policies government needs to pursue. Zimbabwe`s government on the other hand, seems happy to milk businesses through all manner of license fees and taxes, even before operations start, in some instances. Instead, why not relax these upfront fees and benefit from higher corporate tax income which naturally flows from profitable enterprises.
And what business exactly is Zimbabwe open for? There seems to be no coherent and lucid articulation of the specific investments that the new administration is looking for, taking cognisance of Zimbabwe`s competitive advantages. The gung-ho approach to courting investors currently being pursed is ineffective and will likely not yield the desired results, assuming of course that there are clear investment objectives – with figures and deadlines etc. – that have been laid down by President Mnangagwa`s administration. Take Dubai as an example, seeking to create a diversified economy not reliant on oil revenues, the city started reinventing itself from the mid-1990s as a tourism, real estate and financial services hub, that attracted leading businesses and qualified expats from all over the world.
Now, the territory has cast a new vision for its future premised on Artificial Intelligence, Science and Technology, and is set to launch a probe mission to Mars by 2020. Dubai`s vision is clear, and it will no doubt attract focused investments that will help it attain its goals. At present, the same cannot be said of Zimbabwe unfortunately. Chris Griffiths, CEO of Anglo American Platinum recently said to Zimbabwe`s Mines minister, Winston Chitando, “You think I will bring half a billion dollars to Zimbabwe when you guys keep chopping and changing the rules? There is no way I will do that.” Zimbabwe is just not yet open for business!
“Zimbabwe most sought after investment destination”
Citing a Mauritius Investment Attache, a Mr Maheswa Oodit, The Herald recently had a story of how Zimbabwe is now Africa`s most favoured investment destination, only second to South Africa. Interestingly, this assertion is primarily based on the number of investment inquiries. Unfortunately, investment inquiries and investment commitments do not measure up to anything in the real world. The sure and clearest indication that a country is a sought after investment destination, is in the actual investments made in the country.
Who will forget how The Herald boisterously cheered Aliko Dangote`s visit to the country in 2015, as the start of what is known in the state newspaper`s parlance, as “mega deals.” And to this day, nothing concrete has come out of Mr Dangote`s visit. The $3 billion in investment commitments that is being counted as one of the successes of President Mnangagwa`s first 100 days in office, unfortunately does not count for much, until these are translated into actual capital flows. And this brings us back to the first lie that Zimbabweans desperately want to believe as true – “Zimbabwe is open for business.”
Capital is colour blind, has no sympathy, and is self-serving, typically seeking the path of least resistance. It is not going to come simply because Zimbabwe has had a change in personnel or out of sentimentalism. So long as the underlying issues that turned it off in the first place are existent, then it will not be inclined to come to our shores. These issues include retrogressive corruption, choppy and inconsistent government policy, absence of a lucid national vision and development plan that everyone can rally behind. In my mind therefore, regardless of how these untruths are constantly shoved down our throats, it doesn`t make them any more palatable. Zimbabwe is not yet open for business because there are serious issues we have not yet resolved, and secondly, Zimbabwe is definitely not the most sought after investment destination!
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