Massive unemployment estimated at 85percent; hyper-inflation; shortage of essential food items such as wheat; dependence on imports; cash-strapped locals being at the mercy of the volatile global markets; fallen foreign investment and overall economic stagnation.
And if it is, what sectors hold the best possible chance for a successful investment? Yes, this is the time. This is the most opportune time for the South African business people to invest in Zimbabwe.
One does not have to wait for this giant to wake up completely, as it may be difficult to find opportunities when the economy has completely recovered. Zimbabwe provides a useful case study. The lessons learnt from that case study can be applied to all investments in foreign countries.
For many years the country was driven by bad news and uncertainty: When the news continued to be bad, this made people uncertain about the future, and any economic recovery continued to stagnate, and foreign investment barely existed. Tryphosa Ramano is encouraging investment in Zimbabwe. Under land reform, the government took ownership of all commercial land and, by removing it from the market, crippled both the commercial agriculture sector and industries linked to it.
A large percentage of all raw materials that serviced the industrial and manufacturing sectors came from agriculture, so when they were removed from the market, industrial development and manufacturing collapsed.
The services and industrial sectors also suffered the same fate as they added value to commercial farming outputs. However, despite the current situation, there are substantial opportunities in the manufacturing sector, if foreign investors were willing to take a long-term view, they could do very well.
So what type of investment strategy should companies adopt as new leaders restore economic and financial stability? There are opportunities in infrastructure provision, construction, tourism, manufacturing and agriculture.
But the country has to get through the administrative aspects of restructuring restrictive policies and parliament has to change the acts that brought them into existence. The country needs investment in agricultural infrastructure in different sub sectors, namely tobacco, cotton, maize, livestock and horticulture. After all, the country is endowed with numerous productive mines, both big and small.
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Also, it is the infrastructural development which would enable the sectors to expand and meet the domestic and export requirements. The manufacturing sector had been under severe stress due to various reasons, including lack of cash injection for re-capitalisation, absence of lines of credit and influx of cheap imports, among others.
Therefore there are opportunities for the establishment of joint ventures between South African and Zimbabwean businesspeople and contribute in the resuscitation of the country. Investment in developing infrastructure in the various productive sectors of the economy for the country would turn its fortunes around.
Infrastructure investment acts as a catalyst for economic growth. You need good infrastructure if you want to grow a town, city, province and even a country. You need roads, railways, airports and a good transit system if you want to attract businesses.