Online Reporter
THERE is an old adage in economics that private capital is the most honest pollster.
It does not respond to slogans or diplomatic overtures; it moves with the cold, hard conviction of a spreadsheet.
By that measure, Zimbabwe’s Second Republic has just received a resounding vote of confidence.
Last week, there were two stories that, taken together, paint a portrait of an economy on the cusp of transformation.
The first detailed President Mnangagwa commissioning a new Cheetos snacks plant for Varun Beverages, alongside the conglomerate’s announcement of a staggering US$650 million investment pipeline over the next five years.
The second revealed that Delta Corporation, the country’s largest beverages manufacturer, whose revenues rose to more than US$1 billion last year, plans to invest US$120 million in its expansion projects, after sinking more than US$40 million a year earlier.
The screaming headlines from the two industrial behemoths — Varun and Delta — are the unmistakable sounds of an economic takeoff.
For years, Zimbabweans have heard the mantra “Zimbabwe is Open for Business”.
Critics have dismissed it as mere rhetoric.
But Varun Beverages, a subsidiary of a global giant, is putting real money behind the slogan.
Since the President commissioned its first production line eight years ago, the company has grown from producing 10 million bottles a month to nearly 120 million.
It now employs 2 000 people directly.
The planned US$650 million injection — targeting 500 megawatts of green energy, recycling and further beverage expansion — is the single most compelling evidence that global investors see a stable, predictable and profitable future in this country.
Similarly, Delta’s performance is staggering.
Crossing the US$1 billion mark in revenue is not merely a corporate success; it is a macro-economic indicator.
Its current bet to inject US$120 million to expand brewing capacity because demand is outstripping supply is the definition of a high-growth economy.
The Second Republic deserves credit for creating the policy consistency that allows this to happen.
As the President noted, Cabinet has just approved slashing regulatory fees, licences and compliance costs across manufacturing, finance, real estate and healthcare.
This represents a deliberate and continuing effort to lower the cost of doing business.
The result is a manufacturing sector projected to grow by 3,4 percent this year, with capacity utilisation flirting with 60 percent.
However, as we celebrate these industrial milestones, we must soberly assess the foundation upon which they rest.
Both Varun and Delta are ultimately consumer-facing businesses.
Their success depends on the purchasing power of ordinary Zimbabweans.
And that purchasing power, in turn, rests squarely on the performance of two volatile sectors: agriculture and mining.
The current consumer demand driving Delta’s record sales is partly fuelled by a decent tobacco season and mining activity.
But the El Niño-induced drought that recently scorched the region is a grim warning.
If the rains fail again, rural liquidity dries up.
If mining output is constrained by power shortages or policy uncertainty, the demand for lager beer and Cheetos snacks contracts.
The private sector can build world-class factories, but it cannot conjure rain or dig ore.
Therefore, the Government must double down on policies that climate-proof agriculture.
The era of rain-fed subsistence is over.
Zimbabwe needs aggressive irrigation development, drought-resistant seed varieties and crop insurance schemes that allow farmers to plant with confidence regardless of the forecast.
Similarly, the mining sector requires policy certainty and infrastructure support — particularly energy— to maximise value.
Varun’s planned investment in 500 megawatts of solar power is a welcome private sector solution, but the Government must accelerate its own energy reforms to ensure mines and farms have the power to operate.
The success of the Second Republic’s industrialisation drive will ultimately be measured not by factory openings alone, but by whether those factories run at full capacity every month of the year.
To keep Varun’s lines spinning and Delta’s kegs flowing, the purchasing power of the farmer and the miner must be protected from climate shocks and global commodity volatility.
The signs of takeoff are undeniable.
But for this flight to reach cruising altitude, the Government must hold the line on macro-stability while investing ruthlessly in the primary sectors that feed the industrial beast.
Brick by brick, stone upon stone — but the foundation must be rock solid.
