AfrAsia Bank is pleased to post the following from guest blogger Nigel Chanakira. Nigel is the founder and anchor shareholder of AfrAsia Kingdom Zimbabwe Limited and here outlines Zimbabwe as the emerging market dynamo and the potential investment opportunities in the country.
Zimbabwe is being recognised largely as a re-bounding economy after a decade of lacklustre performance and the country still has some fundamental structural issues which need to be addressed from a policy perspective. Sub-Sahara Africa inevitably is a new and possibly, the remaining fast-growth frontier given the current global landscape and, Zimbabwe will be at the heart of growth within SADC.
Zimbabwe has for the past three years been churning out annual GDP growth rates of 5,7%, 8,1% and 9,3% respectively in a time of the global recession. The country may currently fit into a classic high risk, high return profile but without the exchange rate risks associated with an African developing country due to its multi-currency regime. Foreign investors who want to invest in Zimbabwe will find at least US$9,2 billion worth of opportunities over the next couple of years as identified by the 2011-2015 Medium Term Plan of government in the following sectors. Click here to view the table.
As a matter of fact, many investors are concerned with the political upheavals in Zimbabwe. On the economic front the adoption of the multiple currency system in 2009 by Zimbabwe coupled with the cash budgeting policy by the government has brought the much needed macroeconomic stability. Although many new investors have entered into the mining, telecommunications and banking arenas, many others continue to watch from the sidelines anticipating to move in as soon as the signals are more position. Emphasis should now be placed on reducing Zimbabwe’s sovereign risk through working towards more stabilisation of the political environment so that we can harness international resources to augment domestic ones.
Following the direct involvement of SADC and the African Union, we expect that fresh elections will take place within the next year or so under a new constitution and these should be free and fair. This will foster a more conducive economic environment which creates space for significant infrastructural and private sector investments will drive sustainable economic growth allowing Zimbabwe to once again take its place as an African economic dynamo under a new dispensation. Interestingly, the appetite for investment by the Chinese in Zimbabwe remains very high and it is a strategic moment in time where global investors should focus more on Zimbabwe sifting between reality and the negative media frenzy because returns are very attractive.
Zimbabwe is undergoing some reforms by promoting local and foreign joint venture investments, tourism from the East, and exploiting its huge mass of a variety of valuable minerals (spanning 60 in number). Foreign savings and investment is now seen as a mechanism to compliment the domestic savings pool which was decimated by hyperinflation and dollarization of the economy. The ideal situation is for Zimbabwe to do business with all countries of the world especially the European countries that it had traditionally been doing business with like United Kingdom, etc. This is what will put Zimbabwe’s economy back on its feet.
Read more about 'Investing in Zimbabwe' in our Newsletter (page 8-9).
Read more about 'Investing in Zimbabwe' in our Newsletter (page 8-9).
Etienne Viard, PROPARCO’s CEO: ”PROPARCO supports AfrAsia’s strategic vision of Mauritius as a value-adding platform for Africa-Asia financial flows, in line with the idea of development of the South-South trade fostered by the AFD Group.”
Councillor Logie Naidoo, Deputy Mayor of Durban (South Africa): “Our business community can only benefit from a new alternative to smart and sophisticated banking by looking at AfrAsia Bank's developed regional outreach and repositioning itself to facilitate cross-border trade and investment flows into Africa and Asia.”
Ian WS Kilbride, Chairman and Chief Executive of The Warwick Group: “ I have been very impressed by AfrAsia Corporate Finance (ACF) and the professionalism that you showed throughout the deal. I am actually even more excited about the future, rather than just this deal in isolation, the future opportunities that we will generate as a business within Warwick now have a young dynamic and professional team that we can utilise and seek advice from. Your style is a refreshing reminder that South Africa does still produce top quality people who are smart and able to see opportunity, rather than just reasons as to why deals should not be done! Thanks again for your attention to detail and I look forward to working with you on many other projects in 2011.”
James Benoit, AfrAsia Bank’s CEO: “AfrAsia Bank was among the first to recognize the growth potential of the African Lions to match the rise of the Asian Tiger economies. Much of our strategies and growth are coming from this mission to be the reference Private and Corporate Bank in the region to facilitate Africa-Asia trade and investment flows. This can be seen in our strong customer and financial growth which is hard to find elsewhere in the world these days”.
