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BizDay Zimbabwe

Chanakira predicts economic boom

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ZIMBABWE Investment Authority chairman Mr Nigel Chanakira says Zimbabwe will experience an economic boom after elections, provided the country holds a credible and peaceful poll.

In a wide-ranging interview yesterday, Mr Chanakira, a significant shareholder in AfrAsia Kingdom Bank, said if the country could maintain the peaceful spirit shown during the referendum last March, its economic and investment prospects were “clearly bright”.

“I can tell you for certain from the investment perspective . . . if (the election) is peaceful and credible, which all political parties have pronounced, clearly the future is bright for Zimbabwe, because we are entering the region of multibillion-dollar investment flows into Zimbabwe,” he said.

“What encourages me are the indications of the resumption of trade and investment from the Western countries who have been really out of the picture in terms of investment. They want a peaceful election and an environment which is conducive to do business. That is the number one clarion call by the investors.”

Zimbabwe is expected to hold harmonised elections this year, ending a four-year coalition Government formed by the country’s three main political parties under the Global Political Agreement.

The Confederation of Zimbabwe Industries, which represents manufacturing companies and one of Zimbabwe’s most influential industrial lobby groups, yesterday repeated calls for peace during elections.

The ZIA chairman said significant investment enquiries were coming from Mauritius, South Africa and China.

Mr Chanakira also urged investors not to read too much into the country’s indigenisation policy which requires foreign-owned companies to turn over their majority stakes to black indigenous Zimbabweans.

Citing the acquisition of Zimbabwe Iron  and Steel Company’s 54 percent shareholding by Essar Holdings, Mr Chanakira said “that has given us scope that there is room to manoeuvre (negotiate the thresholds)”.

He noted that while Zimbabwe registered successive growth in terms of the GDP in the last four years, there was concern over the country’s negative trade position and low capacity utilisation by the manufacturing sector. Zimbabwe has managed to keep the economy growing at an average 7,3 percent since 2009 and this year it is projected to grow by 5,2 percent.

But the country’s trade gap has been widening. In the first quarter of 2013, Zimbabwe’s trade deficit widened to US$845,51 million, according to the Zimbabwe Statistics Agency. The value of exports amounted to US$813,57 million while imports totalled US$1,66 billion.

Analysts expect a wider trade gap by year-end as they would be generally importing more during the second half of the year.

The immense export growth potential of the Zimbabwean economy continues to suffer from lack of ability to beneficiate primary production in agriculture and mining, forcing the country to continue exporting raw materials, with mineral exports accounting for about half of total exports.

Zimbabwe is also importing 60 percent of basic commodities, mainly from South Africa, as local manufacturers are producing at an average 45 percent, according to the Confederation of Zimbabwe   Industries.

“That scenario points to a need to reverse that by fostering an environment of great domestic production,” said Mr Chanakira. “There are goods that we are importing which can be easily grown, if it is food and then manufactured locally. We have (huge) unutilised capacity . . . it is simply not        good.”

He commended the Finance Ministry and the Reserve Bank of Zimbabwe for taking a bold move towards resolving the country’s US$10,7 billion external debt overhang by adopting an IMF staff-monitored programme. Herald

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