Cape Town – It certainly is early days yet but if the confidence shown by the international community and investors in the new Zimbabwean government is anything to go by, the Southern African country is on course to fulfil its potential as a continental economic powerhouse, with the mining industry playing a central role.
And this, emanating from the resignation of long-time leader Robert Mugabe last
November, spells good news for the region and the continent as well, according to investment experts.
Mugabe and his government are blamed for the freefall of what was one of the most vibrant economies at independence in 1980. Zimbabwe is now the fourth biggest regional economy by gross domestic product.
Mining, one of the pillars of the Southern African country’s economy, was not spared the divisive policies.
During the turbulent period through which policies deterred investments, mineral production declined and thousands of jobs were lost.
Accounting for about 15 percent of gross domestic product (GDP), contributing over half of foreign currency earnings and employing thousands, when mining sneezes, the entire economy catches a cold.
Upon succeeding Mugabe, President Emmerson Mnangagwa and his administration have embarked on a mission to lure investors and revive the country’s economy from its spectacular collapse.
The signs are positive.
“It’s early days yet but things have never looked promising these past three months than they ever have been for Zimbabwe,” said Victor Kgomoeswana, well known African business expert and author of ‘Africa is Open for Business’.
“If it is promising for Zimbabwe, it is promising for the Southern African Development Community (SADC) region and optimistic for Africa as a continent. It is a golden moment for Zimbabwe literally and figuratively,” Kgomoeswana said at the just-concluded Mining Indaba in Cape Town, South Africa, at a breakfast meeting for Mining in Zimbabwe Dialogue.
There was an overwhelming response from prospective and current investors to the event that was among the highlights of the Africa, hailed as the world’s largest mining investment conference, dedicated to the capitalisation and development of mining in Africa.
Mnangagwa’s government has made this a priority.
“Zimbabwe is indeed open for investment,” said African Chrome Fields national project director, Ashruf Kaka.
According to the South African company, which recently invested overUS$220 million (about R2.640 billion) in its operations in the Midlands
Province of Zimbabwe, the “new Zimbabwe” under the leadership of Mnangagwa has abundant human capital and natural resources that can see the country achieve its potential of becoming the breadbasket of the SADC region.
Kaka said Zimbabwe was endowed with more than 60 different minerals, including asbestos, coal, chromium, diamonds, gold, iron ore, nickel, platinum, emerald, tin and lithium, among others.
The country houses more than half the world’s chromium reserves and the second-largest platinum reserves after neighbouring South Africa.
“This creates myriad investment opportunities, especially in the mining sector,” said Kaka, who is also chief executive officer of the Moti Group.
Speaking at the Mining in Zimbabwe Dialogue, Zimbabwe Minister of Mines and Mining Development, Winston Chitando, pledged that the government would make the environment conducive for investors to exploit the country’s vast mineral resources and ultimately breathe new life into the economy.
“The changed political leadership has created an environment that unlocks the country’s investment opportunities especially in the mining sector,” Chitando, a respected mining industry executive before his appointment, he said.
Among the moves poised to lure investors is the relaxation of the indigenisation regulations, which previously compelled foreign-owned firms to cede at least 51 percent stakes to indigenous Zimbabweans.
Foreign firms can now enjoy full ownership except in the diamonds andplatinum sectors, where the government or its agencies must hold a majorityshare.
Among the cornerstones for mining revival and eventually economic resuscitation is lithium.
Government has sealed a deal with South Africa’s Prospect Resources for the exploitation of the metal, which is set to earn the country US$1.4 billion over eight years.
In addition, two other lithium projects are on the cards with the firms to be involved finalising feasibility studies.
“Most of the enquiries from potential investors have been on lithium. A major announcement will be made in the coming weeks,” Chitando said.
He added, “We are gearing up to ensure investors are speedily attended to and make the country going.”
While the country’s mineral endowment is well-documented, Zimbabwe’s real wealth lies in its human resources.
“One has to admire the work ethic of Zimbabweans, their class and their resourcefulness,” said Kgomoeswana.
“If you are to combine this with the country’s resource base, any investor that does not have Zimbabwe on its plans has a major page missing.”
Kaka said the potential of the country of 16 million people to achieve its “post-liberation destiny” was enhanced by the abundance of both human and natural resources.
“Zimbabwe’s greatest asset is not its natural resources but the unwavering spirit of its people,” Kaka said.
He attributed this to Mugabe focusing on education when he became the leader of independent Zimbabwe in 1980.
“The legacy he left for his people was to make Zimbabwe the most educated nation in Africa,” Kaka added.
Nonetheless, despite the wave of optimism, government has been urged to address remaining impediment, including “red tape” according to Wilfried Pabst, Chairman of the South African-based African Metals Management Services Limited.
Batirai Manhando, Zimbabwe Chamber of Mines President, concurred but with buoyancy.
“The industry is optimistic government will endeavour to resolve all legislative and policy bottlenecks,” Manhando said.
Mnangagwa recently told a joint sitting of the country’s two houses of parliament that his government would introduce new policies to re-engage the world community and attract foreign investments. The tweaking of the 51-49 percent indigenisation compliance threshold is one of the major legislative and policy shifts.
“My government is committed to opening Zimbabwe to investment by building a free and transparent economy that benefits Zimbabweans and is welcoming to outsiders,” the president said. – CAJ News