FILE PHOTO: Zimbabwe's President Emmerson Mnangagwa attends the World Economic Forum (WEF) annual meeting in Davos
JOHANNESBURG - Zimbabwean President Emmerson Mnangagwa has taken his “open for business” drive to China, where he is leading a delegation of business leaders and cabinet ministers on a state visit.

His visit will also be used to bid for foreign direct investment, which the country desperately requires.

China is a key trade partner for Zimbabwe after South Africa, with investors from the economic powerhouse already involved in the country's chrome mining, cement manufacturing and retail sectors, among others.

Zimbabwe also exports tobacco to China and is reliant on the country for heavy machinery and equipment for mining and construction, telecommunications equipment and vehicles, among others.

The country has also been strengthening trade ties with Russia as Western investors adopt a wait-and-see attitude, according to economists.

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“Chinese investors have had preferential treatment from Zimbabwe in the past and they have not been exposed to stringent laws, such as indigenisation. They are more likely to be first movers compared to funders from other regions because they are aggressive and would be keen to capitalise on the ties that Zimbabwe and China enjoy,” said independent economist Moses Moyo.

China, however, has been a long-standing ally of Zimbabwe after former Zimbabwean leader Robert Mugabe adopted a Look East policy in 2000 following an agrarian reform that saw Western countries sever ties with the country.

The Chinese Embassy in Zimbabwe says China will “make an announcement on the new batch of assistance to Zimbabwe”. Knowledgeable officials said this would likely be a grant to help Zimbabwe stabilise its economy.

“We came here as a private sector contingent accompanied by technicians. Our mission was to sign public-private sector initiatives to help Zimbabwe’s economic recovery,” said Dakarayi Mapuranga, a business executive accompanying Mnangagwa to China.

State media has reported that by yesterday afternoon, Zimbabwe and China had signed a $500million (R5.9billion) package for the supply of agriculture and mining machinery to the southern African country.

This includes a $40m facility inked between Zimbabwe and China’s Good Agro-Rising for chemicals for crops such as tobacco.

The state visit is expected to run up to Friday and Mnangagwa is accompanied by ministers from Finance, Information and Communication Technology, Mining, Industry and Commerce, Transport and Tourism, among others.

Zimbabwe Foreign Affairs Minister Sibusiso Moyo said as many as 77 business leaders were in China for business meetings and investment opportunities during the state visit.

“The thrust is that the government is there to provide the appropriate business environment and the private sector is the foot soldier and in that regard there are 77 business people to attend several meetings that have been lined up,” he said.

Zimbabwe is suffering from foreign currency and liquidity constraints that have seen companies resort to the parallel market for hard currency to fund imports and other obligations while foreign shareholder payments are still crippled.

Mnangagwa has sought to open up the country for foreign investments after partially abolishing the indigenisation policy and moving to restore ties with the international community.

- BUSINESS REPORT