Emmerson Mnangagwa. Picture: SUNDAY TIMES
Emmerson Mnangagwa. Picture: SUNDAY TIMES

Harare/Johannesburg — When Emmerson Mnangagwa took over the leadership of Zimbabwe from Robert Mugabe in November 2017, he promised to revive the moribund economy and adopted a mantra he’s repeated regularly ever since: “Zimbabwe is open for business”.

Mnangagwa, always wearing a scarf in the colours of the Zimbabwean flag, quickly set about traversing the globe to woo investment needed to revive the heavily indebted economy. By March, he’d been on at least 30 foreign visits, including trips to the US, Russia, China, the Middle East and the World Economic Forum in Davos.

Together with the enthusiastic support of state media, Mnangagwa and his officials have announced more than $27bn of planned investment ranging from new platinum mines to steel mills and hydropower dams.

Eighteen months into his tenure, he has little to show for it.

The economy is in its most dire state since 2008, when inflation surged to an estimated 500-billion percent. Medicines, fuel and foreign currency are in short supply, prices of basic goods such as bread are surging and the IMF has forecast the first economic contraction in 11 years. Many of the investment projects announced by the government haven’t progressed beyond the memorandum of understanding or feasibility stage.

“We are still very confident that the bulk of the investments and expressions of interest will materialise,” said government spokesperson Nick Mangwana. “Of course, there will be those that fail to get finances to invest in Zimbabwe because of the blight of sanctions, and there will be those who also delay whilst they monitor the success of our current reforms, but in the whole we are very optimistic.”

Zimbabwe has plenty to offer, with a cornucopia of minerals, including the world’s third-biggest platinum group metal reserves, and some of the best transport infrastructure in the region. Local ownership rules have been relaxed, as has a currency regime that hindered access to dollars.

Still, a disputed 2018 election, in which Mnangagwa retained power, and the violent suppression of protests earlier in 2019 have underscored the country’s instability.

Few companies with a “rational level of risk appetite” will invest in the country in its current state, said Jee-A van der Linde, an economist at NKC African Economics.

The African Development Bank estimated foreign direct investment in 2018 at $470m, about a third of the $1.1bn attracted by northern neighbour Zambia and a fraction of the $2.3bn that flowed into Mozambique.

For some Zimbabweans, the investment pledges evoke memories of Mugabe, who was prone to announcing mega-deals that didn’t materialise. For example, in September 2017 Mugabe announced plans to revive Zimbabwe Iron & Steel Works, once the second-largest steelmaker in sub-Saharan Africa. The project never got off the ground.

“Mega-deals may be mega-deals, they may be mega-nonsense,” said Joe Chabikwa, who sells potted plants to passing motorists in Harare. “These days you believe what you see with your own eyes.”

Bloomberg