Chinese investment needs to benefit Zimbabwe economy – senior Zim business leader
15:34 / 12 JAN 2016
HARARE, January 12 (ANA) – The so called mega-deals penned between the Zimbabwe government and China and the adoption of the Chinese Yen will not do much to improve the economic situation in the Southern African country, a senior business leader said Wednesday.
John Mufukare, executive director of the Employers’ Confederation of Zimbabwe (EMCOZ) told the Africa News Agency (ANA) in an interview that not much had changed economically for Zimbabwe this year as the country continued to suffer from the liquidity crunch.
“I don’t know if bringing the Chinese Yen or having the Chinese coming to undertake projects in the country will benefit Zimbabwe. If they (Chinese) are coming to build Hwange Power station and they bring their things and personnel, and they do not sub-contract to local companies, then it would not make any difference.
“If they are making projects by themselves, there will be no difference except that we will have more electricity,” Mufukare said.
He said the Chinese deals would only make sense if local companies were sub-contracted to carry out the projects – a development that would see some money flow into the country’s economy.
Mufukare said there was no significant change on the ground in as far as business was concerned, adding that the employers’ federation was still taking stock of the situation on the ground.
“There is no quantitative evaluation of what is happening because some companies opened on the 4th (of January), others on the 11th and some will open on the 18th, so we are still to get the clear picture. However, we all know what needs to be done,” he added.
“The challenge we have is the so-called liquidity crunch. We simply have to get new money into the economy; we need to persuade those with the money that it is worth their while to put their money into this economy.”
Prosper Chitambara, a senior economist at the Labour and Economic Research Institute of Zimbabwe (LEDRIZ), said the situation was even more difficult this year as most industries were in a precarious position, with quite a number of companies reportedly failing to open shop.
“The situation is further exacerbated by the drought situation in the country, which is likely to also affect industry in one way or the other,” he said.
Zimbabwe and China signed deals in December last year which will cover infrastructure development in the energy and communications sectors following the visit to the landlocked country by Chinese President Xi Jinping.
African News Agency