The Germany-Africa Business Association has said investments from Germany will start flowing into Zimbabwe once transparency, rule of law and a concerted anti-corruption drive start to bear fruit in the African nation.
BY FIDELITY MHLANGA IN BERLIN, GERMANY
Michael Monnerjahn, the German-African Business Association manager for customer relations and publications, told journalists attending the International Journalism Programme last week that German companies’ decision to invest was informed more by a good political landscape.
“There are no special challenges, especially for German companies.
“For all investors — local and international companies — great topics regarding investments are: rule of law, political stability, transparency, good governance, no chance for corruption,” he said.
German investments, Monnerjahn said, would not flood into Zimbabwe overnight, as investors would first seek scope out the country before committing any investments.
“First of all, German companies will have a strong interest to establish business relations.
“This will start with trade; after that we will see investments. It will take some years,” he said
Monnerjahn said investors were watching Zimbabwe’s elections with keen interest and the outcome of the polls would help them make comprehensive investment decisions.
Last month, a 14-member German delegation met President Emmerson Mnangagwa and showed interest in investing in Zimbabwe, state media reported.
Mnangagwa has been singing the Zimbabwe is open for business mantra since his ascendancy to the presidency last year in a military coup that deposed his predecessor, Robert Mugabe.
Mnangagwa has tweaked the Indigenisation and Economic Empowerment Act leaving the 51:49% threshold only applicable to diamond and platinum sectors, as part of a cocktail of measures to lure foreign direct investment.
Analysts say Mnangagwa has to pass the litmus test of delivering a free, fair and credible election.
Monnerjahn said Zimbabwe had a lot of opportunities, adding that Germany companies were interested in investing in the mining and agricultural sector.
Monnerjahn said German companies’ investment decision was informed by the World Bank doing business report, advising African governments to leave no stone unturned to improve the ease of doing business.
He said Rwanda has attracted the interest of automaker, VW as it has performed well on the “doing business” ranking.
Last month, a VW assembly plant was commissioned in Rwanda due to the East African country’s favourable investment policies.
Rwanda was rated 45 out of 190 in the 2017 World Banks ease of doing business report, while Zimbabwe was ranked 159.
Monnerjahn said Germany had invested 10 billion euro in Africa, with 40% of that being in South Africa.
He said Zimbabwe had slid lower on the ranking from being Germany’s second largest trading partner in Africa after South Africa, 25 years ago.
Foreign investors have been giving Zimbabwe a wide berth due to a deteriorating political and economic environment.
Once a darling of the West, Mugabe’s administration was abandoned by Western allies as he plunged the once promising economy downhill due to democracy and governance deficits.
The Germany-Africa Business Association was formed 80 years ago and convenes events in Africa helping Germany companies find markets and make investments on the continent.