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Oliver Kazunga Senior Business Reporter
ZIMBABWEAN companies still retain the competitive edge to attract foreign direct investment despite hurdles presented by issues around perceived political risk, which is not only peculiar to Zimbabwe, but a global phenomenon.
Ms Pamela Wadi, who is a managing partner with United Kingdom-headquartered risk advisory firm, Causeway Partners, said this yesterday while responding to questions from the floor after her presentation at the Confederation of Zimbabwe Industries (CZI) annual conference in Harare.
This comes as Zimbabwe has seen heightened investor interest since the Second Republic came to power in 2017, with President Mnangagwa declaring the country open for business while his Government has instituted a cocktail of reforms to make investors more comfortable.
Recently, he said the implementation of reforms across the socio-economic spheres of the country ws ongoing in line with the Constitution and national interests, as his administration pursues development that “leaves no one and no place behind”.
“Political risk is a global dynamic even in Europe if you look at the UK (Brexit) with the conflict in Russia and Ukraine, those are all political risk issues and it’s up to an investor to decide whether they want to invest or not.
“Political risk is much more widespread than we think, it’s not something affecting Zimbabwe alone,” she said.
“Political risk takes various forms and l think what we need to be conscious of is that, especially investment capital, is flirting and while you may think that your competition today is the guy sitting next to you or even the country next door to you, it’s much more global.
“Investors can choose to do business in Africa or choose to do business elsewhere, but the risk still remains the same.”
In this context, Ms Wadi challenged local businesses to be proactive and strategise ways to attract investors going into the future.
The three-day event, which began on Wednesday ends today, is running under the theme, “Glocalise”.
The theme’s thrust entails that local businesses must embrace global trends for them to remain competitive on the international arena.
Zimbabwe’s country risk profile has been on the high side following the successful Land Reform programme the country embarked on in 2000 to address imbalances on land distribution created by the white colonial regime.
It is against this background that the country was in 2000 slapped with the illegal sanctions by Britain and her allies, raising Zimbabwe’s political risk.
However, the Second Republic, which came into being in November 2017 led by President Mnangagwa has been on an international offensive re-engaging the global community to improve Zimbabwe’s relations and perception after close to two decades of international isolation.
Earlier in her presentation, Ms Wadi quoted the World Bank report released early this year indicating that Egypt led African countries in foreign direct investment inflows, after it realised US$56,2 billion in 2021 followed by Nigeria (US$45,1 billion), South Africa (US$41,3 billion) while Mozambique and Ghana were on fourth and fifth positions receiving US$37,17 billion and US$32,5 billion respectively.
Ms Wadi said at the moment there is a lot of international political crisis where global inflation was rising rapidly with countries such as neighbouring South Africa recording a 13-year high in inflation while the United Kingdom registering an inflation rate of 10,1 percent.
“This (rise in global inflation) makes business very expensive because of the rates of inflation that we are seeing globally.
“Analysts at the moment are also speculating that a global recession is on the horizon; there are speculating that this recession is even tougher than what we saw in 2009/10 during the global economic downturn.
“There is a lot of currency volatility as well and what we are finding is that sudden changes and fluctuations of currencies result in making it harder for international businesses to trade overseas,” she said.
Online Reporter