Zimbabwe is undergoing major change following the toppling of former President Robert Mugabe. His replacement, Emmerson Mnangagwa, a former vice-president who is backed by the military, is striking a reformist tone and has been quick to allay investors’ fears by rescinding some of the populist policies of his predecessor and installing respected technocrats in key government ministries. Consequently, investor interest in Zimbabwe is picking up noticeably.
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Mnangagwa faces a daunting task putting the economy back on track. By far the most pressing issues are addressing the country’s crippling shortage of US dollars (on which the economy almost entirely depends given that Zimbabwe lacks its own currency and which makes importing difficult) and re-establishing credit lines with multilateral lenders such as the World Bank (to access loans to invest in much-needed public services and infrastructure). Neither issue is likely to be resolved in the coming months because politicians will be preoccupied with the general election, which most likely will be held in July.
If Mnangagwa eventually addresses these issues, and sustains momentum on reforms, the opportunities available to multinationals are considerable. The market boasts considerable natural resources, offering B2B opportunities in mining and agriculture, one of SSA’s larger consumer classes, as well as an abundance of high-caliber talent. Moreover, its relatively good infrastructure and geographical proximity to South Africa makes Zimbabwe fairly easy to access through local distribution partners.
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