Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

***The views expressed in the articles published on this website DO NOT necessarily express the views of the Commercial Farmers' Union.***

Zimbabwe investors find glass half-full

Zimbabwe investors find glass half-full

31 May 2012 07:38 – Jason Moyo

Uncertainty has become a way of life for businesses eyeing Zimbabwe’s 
consumer boom. Jason Moyo reports.

For foreign investors willing to take a risk on Zimbabwe, it is always a 
question of which news to trust. Just as foreign investors at a conference 
in Harare last week were being plied with the good news – a growth forecast 
of 9.4% and a property and consumer boom – an order given by the central 
bank ordering the country’s biggest investor to close all its foreign bank 
accounts brought reality home.

But Zimbabwe looks attractive to some investors, despite the 

Reserve Bank governor Gideon Gono has ordered local banks to cease dealing 
with Zimplats, the 78%-owned Implats unit and the country’s largest foreign 
investor, to force the company to close its foreign accounts and repatriate 
all its funds to Zimbabwe.

The government hopes that, by ordering mines to close all their offshore 
accounts, the repatriated funds will ease the liquidity shortage that has 
slowed growth.

Zimplats was deliberately targeted to force others into line. “If it defies, 
everyone else will defy,” Gono said.

Looking for reassurance
Such controversies have a habit of popping up when investors are in Harare, 
sniffing around for opportunities and looking for reassurance about the 
safety of their interests.
The news came as about 100 investors from around the world, including South 
Africa, were gathered at a conference arranged by Imara, one of Zimbabwe’s 
biggest fund managers. Tino Kambasha, head of sales at Imara, said: “Some 
are jetting in from the eurozone, which just reported zero first-quarter 
growth. They arrive at a time [when] Zimbabwe is predicting 2012 growth of 

Much of the growth will be driven by mining, which is set to grow by 15% 
despite worries about empowerment, and agriculture, which will grow by 11% 
as increased funding begins to undo the damage land reform caused.

John Legat, head of asset management at Imara, said many investors were 
taking the leap.

“What is encouraging is the seriousness of the investors who are already 
here,” he said.

The country is experiencing a consumer boom. Its two largest firms, telecoms 
firm Econet and brewer Delta, are used by analysts as a barometer to gauge 
the state of the consumer market. Their most recent financial results were 
above expectation, with Delta reporting that beer sales had beaten the 
previous record set in 1998.

Consumer boom
The president of the Retailers’ Association of Zimbabwe, Themba Ndebele, who 
heads Truworths Zimbabwe, said, although capital inflows remained slow, they 
would pick up over the medium term.

To take advantage of the new money driving the consumer boom, South African 
companies are raising their investment in Zimbabwe. Pick n Pay has increased 
its share of TM Supermarkets, one of Zimbabwe’s big three retailers, and 
plans to open several Pick n Pay stores.

A proposed $100-million mall development in Harare’s upmarket Borrowdale 
suburb, to be built by a consortium including South African investors, has 
already had half its space taken up by South African retailers.

Some investors are looking past the uncertainty and stepping up their game. 
Harpal Randhawa, whose private equity group, Global Emerging Markets, 
recently bought 25% of miner RioZim, is bidding to buy the diamond assets 
Rio Tinto is selling in Zimbabwe.

“We’re now in discussion with Rio Tinto to acquire the 78% of Murowa 
[diamond mine] that it wants to offload,” Randhawa said.

Mass exodus
The threat of nationalisation has not caused the mass exodus that many 
predicted and many have learned to accept the uncertainty.

Empowerment Minister Saviour Kasukuwere has shown two faces in his crusade: 
the belligerent hardliner when speaking to Zimbabwean audiences and the 
conciliatory technocrat when meeting with investors. Speaking to investors 
in Harare, he addressed what he called “the elephant in the room” – the 
indigenisation law – but stressed it was not nationalisation.

“Let us [have a] dialogue and not confront each other over the matter. Let 
us have dialogue, let us find each other. Companies should not run away from 
us,” he said.

But the trouble large investors such as Zimplats have faced has kept 
Zimbabwe from realising the major investment deals it had hoped for when the 
unity government was formed.

Essar Africa had hoped to invest $4-billion in Zimbabwe over four years 
after it was allowed to buy the country’s biggest steel-maker, but the deal 
remains bogged down by a row over access to ore reserves.


Tobacco sales fetch US$258m

Tobacco sales fetch US$258m    Herald 3/7/2020 Herald Reporter Tobacco sales have reached 110 million kilogrammes worth US$258 million, with deliveries to contract companies and

Read More »

Agric tops micro-finance loan book

Agric tops micro-finance loan book  Herald 12/9/2019   Mr Chitambo Fradreck Gorwe Business Reporter Good rains anticipated countrywide during the 2019/20 farming season, have seen agriculture

Read More »

New Posts: