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Zimbabwe is open for business

Zimbabwe is open for business WORDS: FARAI MUTSAKA The newfound optimism in the country after the change of government is a boon for foreign direct investment and a major boost for tourism After decades of isolation and political and economic turmoil, Zimbabwe is reaching out to the world in the hopes of ending its economic woes and securing a brighter future. A new breeze of optimism is sweeping the land in the wake of longstanding leader Robert Mugabe’s fall from power and President Emmerson Mnangagwa’s inauguration six months ago. Zimbabwe is suddenly in the sights of forwardthinking investors who see the country’s enormous potential, and the tourism sector is showing signs of revival. True, factories might not be roaring yet, and many industrial areas still resemble forlorn scrapyards, but positive energy is reverberating throughout the country. For President Mnangagwa, the positivity and conditional commence shown by the international community are a firm foundation on which to build in his mission to return the country to its former glory. Rejoining the world “Zimbabwe is on the rise again. At the moment, everybody is excited about the opportunities in the country. We just have to put in the work,” said Zimbabwe Tourism Minister Prisca Mupfumira before flying out to the Arabian Travel Market in Dubai in April. At the trade fair, Mupfumira hosted a cocktail event, where she said that “the new dispensation is serious about reengaging the world”. She pointed to some reforms that have been implemented in the short time the new regime has been in power. These include the retaxanon 01 an mulgentsanon taw mat torceu foreigners to cede majority shareholding to locals, the introduction of businessfriendly investor guidelines, reengagement and a freer political atmosphere. Zimbabwe has also legalised marijuana farming for medicinal and scientific purposes a bold move in such a conservative country. President Mnangagwa attended the World Economic Forum in Davos, Switzerland, this year a first for a Zimbabwean President. He wants Zimbabwe to rejoin the Commonwealth. His ministers have visited major world capitals to attract goodwill, as well as foreign direct investment from the international community. The change in policy and efforts to reengage with the world have one clear message: “We’re open for business. A long way to go This would have been a tough pitch to sell to the world a few months ago. A country that became prosperous soon after independence from white minority rule in 1980, Zimbabwe has been battling a vicious economic and political climate that included a currency collapse, deindustrialisation, massive unemployment and economic sanctions. In 2016, the resourcerich nation recorded $319 million of the $21,2 billion foreign direct investment that flowed into southern Africa, according to the United Nations Conference on Trade and Development. Unemployment forced thousands of people to flood the streets as vendors. According to the International Monetary Fund, Zimbabwe’s informal sector accounts for more than 60% of economic activity. On a street corner in the capital, Harare, Jonah Machinya sells cellphone airtime vouchers. He gets 12c for every dollar US$. He says that on a good day, he takes home only about $3. “I need a job that pays a salary:’ says the 36 year old vendor. Analysts say it will take time to turn the economy around, given the massive losses of the past two decades. “Job creation is the key challenge says Roddy Barclay, Director at AfricaPractice, a risk and financial advisory services firm. “Although the country has attracted significant amounts of foreign direct investment in the first half of 2018, there’s a considerable lag before these injections translate into jobs and increased tax receipts to fund social spending. There’s no quickfix solution.” Still, many are rightfully hopeful and more investors seem to be responding positively to the government’s overtures. ABOVE: President Emmerson Mnangagwa. BELOW: Tourism Minister Prisca Mupfumira. OPPOSITE: Zimbabwe’s capital, Harare, is in the northeast of the country. It’s the country’s political, financial and communications centre. In February, the Zimbabwe Investment Authority said early projections showed it could approve investment projects worth $2,5 billion this year as a result of renewed investor confidence. This figure is likely to increase significantly if more investors honour their commitments. In 2017, the investment agency approved projects worth $1,5 billion. Many of these projects failed to takeoff, however, because of a restrictive environment, according to the investment agency. This is set to change. Tourism turnaround For airlines, the new atmosphere is a plus as it attracts business and leisure travellers. “Incoming traffic is increasing significantly’ says Winnie Muchanyuka, the South African Airways SAA Country Manager for Zimbabwe. Tourism, a key pillar of the Zimbabwean economy, was the collateral damage in the country’s longrunning crisis. While the sector is improving, it may take time and a lot of work to turn it into the truly golden sector it once was. Positive talk and reengagement efforts after years of isolation are sparking optimism in the country, which is rubbing off on the tourism sector. “This is lowhanging fruit with potential for quick wins. I believe tourism will become the second, if not the biggest, contributor to the economy if we move speedily. Our fortunes are changing for the better:’ says Mupfumira, adding that Zimbabwe can “easily” record three million arrivals this year. The country recorded 2,4 million arrivals worth $967 million in 2017, according to government figures. For major airlines such as SAA, a rebound in Zimbabwe tourism is good news. Demand for flights has increased, says Muchanyuka. “Zimbabwe is one of the key markets for the airline. Its proximity to our hub, OR Tambo International Airport, makes connectivity very swift; it’s only an hour away. Then we have the Victoria Falls, which is on the bucket list of every tourist:’ she adds. In March 2017, SAA introduced a 222seater aircraft on its JohannesburgVictoria Falls route to replace the 157seater it had been operating on the route. “Tourism operators want us to increase the flights from the current one flight a day,” says Muchanyuka. SAA also flies a 140seater on the HarareJohannesburg route three times a day. For industry players, nothing highlights the changes in Zimbabwe’s new attitude better than the absence of the onceubiquitous police roadblocks that frustrate many tourists. “When I went to London and even to South Africa, everyone complained about roadblocks:’ says Mupfumira. “We’ve resolved that issue. Under the previous regime, we had about eight roadblocks between the airport and Victoria Falls town, a distance of 22km. It was totally unacceptable. “For these plans to be truly effective, the Minister says road rehabilitation ZIMBABWE and access to cash must also be addressed if Zimbabwe is to attract more tourists. Mupfumira’s ministry aims to grow tourism earnings to $7 billion by 2030, according to a strategy document released in February. “We’re increasing our visibility, not only in our traditional source markets in the West and South Africa, but also in areas in which we’re relatively unknown, such as the Middle East and Eastern Europe:’ she explains. Promoting domestic tourism, as well as diversifying from the Victoria Falls, are also big on the agenda. “Our people should experience what’s in their surroundings,” says Mupfumira, adding that village cultural tourism will expose tourists to Zimbabwe’s vibrant heritage. In addition, she proposes that Zimbabwe should work closely with regional airlines to create a new market in the region. “Domestic and regional tourism should be promoted vigorously. We cannot rely on international tourists all year. We need to tap locally as well as internationally to survive the offpeak periods.” As more vistors venture into the country, Machanyuka observes that “the passenger profile is changing too. There’s an increase in the number of businesspeople coming to look for opportunities in mining, tourism and other sectors:’ she says. Some investors are plunging in. Others are adopting a waitandsee attitude. Cyprusbased Karo Resources has said it will sink $4,2 billion into platinum mining. Nigerian billionaire and Africa’s richest man, Aliko Dangote, has expressed renewed interest in investing in mining and other sectors in the country. In March, South Africanbased company, the Moti Group, said it had plans to double its investment in Zimbabwe to $500 million, investing in diamondpolishing, pharmaceuticals, fertiliser and chrome ore mining. “These firms are likely taking the view that firstmover advantage is necessary in a country like Zimbabwe, which presents many opportunities. They’re prepared to accept the inherent political risk in this approach:’ explains Barclay. He says some major investors, such as Anglo American, would like to see more clarity before committing to further investment: “Private equity funds have generally also adopted a more cautious approach and are waiting for the policy environment to stabilise and success stories to emerge. “The international community seems to have embraced the change in Zimbabwe, despite the controversial intervention of the military in the regime change. Relations with Western countries that imposed sanctions are thawing, as evidenced by highlevel official visits, but the test for full reengagement is an election, which will be held no later than August. It may be too early to tell how things will pan out, but the signs of a comeback are promising and the international community seems ready to welcome Zimbabwe back to the table of nations. Amid pressure to maintain the momentum, President Mnangagwa has pleaded for patience for his policy changes to bear fruit. “Rome wasn’t built in a day,” he wrote in a Facebook post in February as he counted down to his first 100 days in office. 11%. GETFING THERE SAA flies direct to Harare three times a day and to Victoria Falls daily. Visit: flysaa.com

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