From Monday to Wednesday, the continent’s focus was on Johannesburg which hosted the second edition of the Africa Investment Forum (AIF), an innovative, multi-stakeholder transactional marketplace conceived by the African Development Bank (AfDB), aimed at raising capital, advancing projects to the bankable stage, and accelerating financial closure of deals.
The 2018 inaugural AIF secured investment interests for deals valued at US$38.7 billion — in less than 72 hours. This year’s edition did not disappoint: 56 boardroom deals valued at US$67.6bn were tabled. Fifty-two deals worth US$40.1bn secured investor interest compared with U$37.8bn last year.
The attendance was massive: 109 countries were represented at this year’s conference. The bulk of them (61) were not African, indicating growing international interest in the annual gathering. The opening ceremony lured three Africa Presidents – Cyril Ramaphosa (South Africa), Nana Akufo-Addo (Ghana), Paul Kagame (Rwanda) – and Prime Minister Agostinho do Rosario of Mozambique.
It was an event in which investment-starved Zimbabwe should have dispatched a strong delegation. Sadly, it was not a priority. Ironically, captains of mining industry and senior government officials met at a local hotel yesterday to deliberate on a US$12bn mining industry roadmap unveiled by President Emmerson Mnangagwa last month. The US$12bn would be achieved by 2023 from about US$2bn. That dream requires investment since the mining sector is capital intensive and requires one to be deep pocketed.
It will not be financed from government coffers which are empty and have forced the government to borrow from the domestic market. A forum which drew the participation of three sitting Presidents cannot surely be Mickey Mouse. This means Zimbabwe is not getting its priority right.
The “Zimbabwe is open for business” rallying cry will be just another cry if it is not buttressed by holistic approach to attract investors. This entails attending the right investment fora, one of which is the Africa Investment Forum, and putting in place a conducive environment to lure investors.
Countries are competing for the same investors and the one with the best climate will win the hearts and minds of foreign investors. FDI has been giving Zimbabwe a wide berth over the years due to policy inconsistencies and red tape, though economic sanctions imposed by the West have played a huge part. While there are attempts to improve the investment climate, would-be investors testify that red tape is prevalent even under the Mnangagwa’s administration.
There could be celebrations in government corridors that FDI inflows jumped to US$745m last year from US$349m in 2017 on the back of reforms, but that is not good enough, though there is a silver lining on the horizon: Six Zimbabwean companies were at the African Investment Forum as they scouted for capital for their businesses.
Three of the six firms were looking for capital to invest in infrastructure (transport and solar energy), while one firm intended to raise capital to establish an agriculture commodity exchange facility to improve the bankability of agriculture in the country.
The remaining two are into corporate advisory services and were looking for potential financiers to invest in diverse companies and projects with good returns. They took it upon themselves to rub shoulders with investors.
Unlike the government, the companies do not want to make mistakes. They are cognisant of the fact that any mistakes made is an investment into the future, according to American athlete Rose Namajunas.
The government may well borrow a leaf from their philosophy, and attend next year’s AIF. It might do the country more good than bad.