TAFADZWA MHLANGATHE former chairperson of Zimbabwe Investment Authority (ZIA) says the country is not ready to compete in the African Continental Free Trade Area (AfCFTA) due to economic instability.
ZIA was disbanded and replaced with Zimbabwe Investment Development Agency (Zida).
But respected businessman Nigel Chanakira says his experience with ZIA gave him an impression of the investment climate, including Zimbabwe’s prospects in the 54-member AfCFTA, a bloc that began operating in 2021.
Speaking at the CEO Africa Roundtable annual conference in Victoria Falls recently, Chanakira said Zimbabwe should attract global capital to complement domestic savings and improve economic growth.
“As ZIA chairperson, having entertained a lot of these investors, (I know) they want to see macro-economic stability,” he said.
“My fright is, are we capable of competing in the African Continental Free Trade Area, punching within our weight? Sadly, I will tell you, no.
“We have a very low base in terms of domestic savings. In domestic savings, US$2,6 billion is in the formal sector, and probably about US$7,5 billion is in the informal sector, which I think is a pity because we should be utilising those savings in formal financial markets.”
Chanakira said businesses should be competitive to attract international capital and stabilise the economy.
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“Unless the bulk of our businesses wake up and stop overpricing, look for technologies, look for capital, and have a stable macroeconomic environment, we are going to be flooded with competitive companies,” he said.
“If you look at procurement, are we procuring at competitive prices so that we can export? Are we attracting international capital in line with what our neighbours are doing?”
The key elements of the AfCFTA agreement included the elimination of tariff and non-tariff barriers within member nations and liberalisation of trade in services progressively, among others.
The benefits of AfCFTA to African countries include making it easier to ship raw materials across the bloc. These are then expected to be sold at affordable prices.
Speaking at the same event, former finance minister Tendai Biti said the government was failing the economy due to lack of transparency when handling mining concessions.
“We are failing this economy through opaqueness,” Biti said. “We are failing this economy through failure to understand the value of what we are dealing with. We are failing to develop this economy through failure to transform the accumulation model.
“It is true that Zimbabwe is a rich country. We have 63 minerals. We have world-class chrome deposits, and world-class lithium deposits.
“But this country is not benefiting from this mineral. Botswana has one mineral. The per capita income of Botswana is US$6 500. The per capita income of Zimbabwe is US$1 200. But they have one mineral, we have 63.
“The difference is that Botswana has managed its one mono-mineral transparently. Its agreements with the De Beers group are transparent. Its revenue flows from De Beers are transparent. We can do that with our 63 minerals.”
