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Mr Busisa-Moyo

Only a month after Zimbabwe’s debt strategy was endorsed by international creditors, a lot of positive things are starting to happen, and of significance, the growing interest by the international community to start doing business with Harare.

As confirmed by Confederation of Zimbabwe Industries president Mr Busisa Moyo, the outcome of the Lima meetings has boosted confidence among investors particularly from the West, as potential investors are already making enquiries for opportunities.

This also comes when ShoreCap II, an international investment company said the deal struck between Zimbabwe and its international creditors on how the country intends to clear its debt will rejuvenate business relations between Harare and the global community.

Zimbabwe’s debt clearing strategy was supported by its main creditors last month in Lima, Peru during the annual meetings of the International Monetary Fund and the World Bank.

Zimbabwe intends to clear its arrears to the three multinational institutions, the IMF, ($110 million), the World Bank ($1.15 billion) and the AfDB ($601 million) by the end of April 2016.

The ongoing process instils confidence among investors who now see Government’s commitment to institute reforms that address their long standing concerns.

Such positive perception will definitely attract an avalanche of foreign investment Zimbabwe requires to improve liquidity in the economy, enhance industrial productivity, support industrial expansion and ultimately result in creation of more formal jobs.

Arguably, Zimbabwe is richly endowed with innumerable natural resources and has abundant investment opportunities in many other sectors such as tourism, ICTs, finance and manufacturing and the only missing link remains the requisite funding.

Despite the diversity of investment opportunities Zimbabwe offers, it has over the years played second fiddle to regional neighbours such as Mozambique and Zambia, which attracted FDI running into billions of dollars compared to its half a billion dollars, on average.

Reforms attractive to investors have worked wonders for countries like Rwanda, Mauritius and Ethiopia, which received significant inflows of FDI.

It is heart-warming to note that only a short while after the Lima meetings there already is significant growth in investment enquiries from Turkey, South Korea and Germany.

It would be worth the while to keep in mind that continuing on such a trajectory will no doubt further put Zimbabwe in the lime light as a preferred investment destination.

Apart from positioning Zimbabwe as a premier destination for foreign investment, the arrears strategy will also unlock long term and affordable credit from the IMF and World Bank and AfDB, as well as open up lines of credit from other international institutions.

This is because other financial institutions take cues from the stance or position taken by the Bretton Woods institutions with regards to credit worthiness of borrowers.

This also reduces the country risk profile, thus enabling the country to get loans at lower rates as opposed to the current situation where credit is being extended at punitive rates.

Accessing low cost long term capital is critical to avoid further cost build up in an environment replete with numerous high costs that compromise the viability of businesses.

Zimbabwe has been running on tight budget, mainly recurrent expenditure, leaving very little to fund infrastructure and other productive sectors of the economy.