- Published on 24 October 2015
I would like to first of all thank H.E the President of the Republic of Zimbabwe CDE RG Mugabe together with his South African counterpart H.E Jacob Zuma for according us the business people from both Zimbabwe and South Africa the opportunity to gather and share experiences.
Indeed this is an important occasion.
Zimbabwe and South Africa have a common and long history of regional affiliation and cultural ties. Several South African companies operate in Zimbabwe in sectors such as mining, tourism, agriculture, banking, manufacturing and retail among other sectors.
This particular Trade and Investment Forum is coming against the background of an unimpressive trade balance between South Africa and Zimbabwe. The competitive edge that South African companies possess against Zimbabwe is directly linked to the weakening of the South African rand against the greenback which is the dominant currency in Zimbabwe following dollarization.
A number of measures are on the cards to try and correct the trade imbalance which currently exist between Harare and Pretoria with the move by South African companies to fund a number of infrastructure projects using a public private partnership [PPP] approach. South Africa has also remained a destiny of choice for Zimbabwe professionals with about 72% of diaspora remittances directly emanating from Zimbabweans resident in South Africa. This is no mean feat given that about 25% of the liquidity sources within the economy are from diaspora which is only second to export proceeds.
This has seen almost 70% of retail products traded in Zimbabwe originating from Gauteng province alone. It is in the interest of us as a chamber of commerce to see to it that sustainable trade measures are implemented to achieve a win-win scenario in as far as trade between the two countries is concerned.
That we also have ministers from Mining and also Tourism represented is a clear testimony of how as Zimbabwe we believe in forums of this nature in our quest to turn-around the economic fortunes of our two beautiful countries.
South Africa remains Zimbabwe’s major trading partner; however this might not mean a lot given that South Africa is arguably the biggest trading partner to all the sub-Saharan African states due to its enormous stature within the continent. The nation of Zimbabwe has witnessed a major shift in its economic structure with the emerging economy dominated by the informal sector. The latter is dominated by goods mostly from South Africa and China given that the two are the major trading partners to date.
One area of contention in as far as Zimbabwe’s operating environment is concerned has been the Indigenisation and Economic Empowerment Act, a policy which was promulgated into law in 2008. The bilateral investment promotion and protection agreement ratified in 2009 between Zimbabwe and South Africa allows for South African firms to be ring-fenced in their investment exploits in Zimbabwe as the Indigenisation laws will be relaxed in quite a number of dimensions. This implies the greater potential for private investors within Africa’s 2nd largest economy to come and invest in Zimbabwe. The mobility of labour between the two countries and Zimbabwe’s concerted effort to revise its labour laws will make recruiting and retrenchment a very smooth and efficient exercise.
As ZNCC we have been hosting several business delagations from South Africa. Only three months ago, we had a delegation from the Durban business community which came to Zimbabwe to explore investment and business opportunities.
Many South African firms continue flocking into Zimbabwe and the government of Zimbabwe has set up a number of steering committees to address the Ease of Doing Business factors as espoused by the World Bank. By addressing such factors coupled with an attractive currency regime, it is our hope that a number of South African firms will open shop in Zimbabwe.
A number of Zimbabwean professionals in the medical, banking, academic and engineering disciplines are also becoming a household name in our southern neighbour and to us we see it as an opportunity for “brain gain” contrary to the traditional perception where bureaucrats used to view it as a loss.
Zimbabwe's economy has been growing since the country adopted the Multicurrency regime in February 2009.
Following a decade of contraction from 1998 to 2008, Zimbabwe's economy recorded real growth of more than 9% per year in 2010-11, before slowing to 5% in 2012, due in part to a poor harvest.
Our country also still faces a number of difficult economic problems which represent opportunities especially in areas of infrastructure, agriculture and mining. A large external debt burden has made it difficult for the country to attract capital for investment in these critical areas.
However Zimbabwe’s investment value proposition is more than a resource boom.
The key growth driver, about 50% of GDP, is now coming from consumer facing industries like retail, ICT, banking and services.
Mining and agriculture though very important, are not contributing as much as they should to the country’s overall GDP. Even in these traditional sectors, emphasis is on the potential impact of secondary industries driven by processing and value addition. Zimbabwe must move up the global value chains.
There is also a potential demographic dividend, i.e., converting population into economic leverage through skilled human capital. There are many well-trained and competent people in Zimbabwe. The categorical imperatives are talent, ICT, advanced science and technology, entrepreneurship, and innovation. While infrastructure – water, energy, transportation, ICT, public works – is a key enabler of the entire economy, it also presents major opportunities to the innovative and risk-taking investor.
As already indicated, South Africa is Zimbabwe’s main trading partner, accounting for more than 64 percent of Zimbabwe’s international trade volumes.
From the above you can see that we have massive trade dividends opportunites in Zimbabwe.
I am happy that during our deliberations we will have the chance to discuss the following topics:
- Cooperation and investment opportunities in Agriculture,
- Textiles and Clothing,
- Water and Sanitation,
- Mining and Energy.
- Finance and Insurance,
- Health and Pharmaceuticals.
These are a few of the areas where increased cooperation among our business people can result in tangible economic benefits to increase bi-lateral and intra-regional trade and development which is key for the prosperity of our nations.
I thank you.