Investors Can Find Opportunities in Zimbabwe Despite ‘Mugabe Rules’

On the other hand, Rafi said sectors like mining are to be avoided. Zimbabwe has a huge mining sector but it’s one of the areas that is most subject to risk, he said. “Although Zimbabwe has been through a lot in recent years and the economy is in dire straits, it has all the pillars in place to make a quick corporate recovery – and there’s no need to wait post-Mugabe,” Rafi said. “People have just got to live with Mugabe being the leader of the country and know that Zimbabwean companies have learned to work with ‘Mugabe rules,’ so as an investor, it’s a question of working with these rules rather than against them. This is why it’s important to have a local presence because the locals know which companies may be victims of indigenization and which ones won’t and will be great buying opportunities.”

Rafi also noted Zimbabwe’s history and some of the solid institutions it has in place. “We forget that this is a country that once upon a time and not too long ago, was the most advanced economy in Africa alongside South Africa,” he said, “so it has institutions that typically take most countries a hundred years to build.”

Larry Seruma, chief investment officer and managing principal at Nile Capital Management, also said Zimbabwe’s highly educated population—it has an adult literacy rate of 90%, one of the highest in Africa—is one of the country’s greatest strengths and a building block for the future.

“There is a silver lining in that whoever succeeds Mugabe will see the need to have a different environment and a need to change the growth profile of country,” he said. However, the current policies are counter-productive for Zimbabwe and frustrating for foreign investors, and they are affecting a number of Zimbabwe’s key industries, Seruma said, notably agriculture.

Several years of repossessed farms and land grabs have resulted in experienced Zimbabwean farmers leaving the country and taking their expertise elsewhere. Rampant corruption and weak institutions have exacerbated the situation, and while other African nations are now benefiting from Zimbabwe’s agricultural expertise, the country itself has gone from being a food exporter to a food importer and is facing a massive food security issue that’s a drain on an already stretched economy, Seruma said.

In Africa, too, regional cooperation is becoming more and more important, but a number of countries have made it plain that Zimbabwe is on outs of that dynamic. This will make it tougher for the country to attract investment, no matter its potential.