Russians’ visit shows Mugabe’s Brics focus

Zimbabwean President Robert Mugabe and his Chinese counterpart, Xi Jinping, attend a signing ceremony at the Great Hall of the People in Beijing. China and Russia have emerged as the key eastern investment allies for Zimbabwe. File picture: Diego Azubel

Zimbabwean President Robert Mugabe and his Chinese counterpart, Xi Jinping, attend a signing ceremony at the Great Hall of the People in Beijing. China and Russia have emerged as the key eastern investment allies for Zimbabwe. File picture: Diego Azubel

Published Sep 21, 2014

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Johannesburg - The Zimbabwean government, which is battling to contain a fast deteriorating economic crisis, is wooing investors from Brics (Brazil, Russia, India, China and South Africa) countries, as Western and European investors shun the country.

China and Russia have emerged as the key eastern investment allies for Zimbabwe, which boasts plush mineral resources and climate conditions conducive for agriculture.

Zimbabwe’s economy has struggled, mainly as a result of investor apprehension over its regulatory and operating framework, according to fund managers and economists.

“The government needs to set the proper turn in order to better attract global investors. Right now, the country is viewed with a squint in the eye because of the country risk profile,” Jeffrey Kasirori,an economist, said.

Finance Minister Patrick Chinamasa has revised Zimbabwe’s economic outlook to 3.1 percent for this year. In November, he said the economy would grow by 6.1 percent to $15.5 billion (R171.03bn), anticipating stronger growth from mining, agriculture and tourism.

In July, the country launched an ambitious tourism policy aimed at increasing tourist arrivals and boosting revenue from the industry from $749 million to $1.8bn by the end of next year.

Tourism Minister Walter Mzembi said the government would leverage on new and potential markets constituting the Brics countries.

Zimbabwe Tourism Minister Walter Mzembi said in July that Zimbabwe was also targeting tourist arrivals from Brics countries, as Zimbabwe changed its investment attraction drive from traditional source markets in Europe and other western regions.

Relations between Zimbabwe and western nations soured after President Robert Mugabe embarked on a land reform exercise that displaced mostly white commercial farmers and disrupted productivity in the agricultural sector.

Mugabe’s government is also accused of gross human rights abuses and stealing elections over the past few years.

Mugabe and other government officials have visited Russia and China, looking for investment deals and capital to fund an economic recovery bid that has so far failed to kick in. Business leaders have complained of power challenges, limited access to lines of credit for retooling and re-capitalisation, as well as little interest by international investors.

“The advent of the Russians in Zimbabwe’s platinum scene will bring an additional 250 000 ounces to our current output of 430 000 ounces within the next 36 months,” Zimbabwe Mines and Mining Development Minister Walter Chidhakwa said.

Last week Zimbabwe and Russia commissioned a massive platinum mine in Darwendale, about 70km west of Harare.

Chidhakwa has threatened to takeover unused platinum claims from existing investors, with knowledgeable sources in Zimbabwe saying these would probably be given to investors from China and Russia.

Government officials and business leaders have also in the past month travelled to European countries to make presentations to investors, but there has not been any cash forthcoming. Officials are now hoping that it’s western and Brics allies will bring in the badly needed capital.

India’s ambassador to Zimbabwe, Jeitendra Tripathi said earlier this year that the country was keen to invest up to $10bn in the Zimbabwean economy over the next few years.

This, according to Tripathi, would be “the biggest ever foreign investment in Zimbabwe”. A greater portion of this would probably be poured into exploration for new mines, the building of power plants and a new rail line linking southern Zimbabwe and Mozambique.

“They (Russians) are keen on joint ventures, particularly in the manufacturing sector. There are industries that require retooling and new technology,” Industry Minister Mike Bimha said at a dinner for the Russian state and private delegation last week.

Business Report

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