Investors wary of currency conundrum in Zim
PHILLIMON MHLANGA
Offshore investors are wary of the de-dollarisation roadmap which only permits the use of the United States dollars and other major currencies until 2025 , making it difficult for local businesses to access international credit because lenders are unsure of what will happen after the deadline, WestPro Holdings top officials have said.
A return to the Zimbabwe dollar system in its entirety is the government’s ultimate goal, and it was announced last year that US dollars and other foreign currencies would continue to be accepted alongside the local currency until 2025.
To strengthen the local currency and rein in rising consumer inflation, the administration implemented policies to promote the use of local currency rather than the US dollar.
Investors, however, are perplexed by the 2025 deadline because it is unclear what will happen after that date.
Speaking at the Zimreal Property Investment Forum, WestProp Holdings Limited CEO, Ken Sharpe said:
“In this post-election period, we need clarity and consistency. The biggest issue is about currency. There is a 2025 deadline for the multicurrency regime. No one knows what will happen after that date. So, investors are worried and they don’t know what permanent currency in Zimbabwe will be,”Sharpe said.
He asserted that his business could attract investments to Zimbabwe totaling up to US$20bn.
“We have US$1bn worth of development happening just in the northern suburbs of Harare.
“Surely, we can bring US$10bn or US$20bn worth of investment in the country. We aspire to bring Dubai to Zimbabwe,” Sharp said.
In an interview with Business Times, WesProp Holdings Limited board chairman, Dr Michael Louis said the uncertainty was driving away investors.
“One of the biggest challenges we face is when we are looking to finance our projects is the long term economic currency.
“When it comes to financing very large projects, like the Warren Hills, Pomona, and Borrowdale projects stand out as multi-billion dollar undertakings.
When making such large scale projects, you need international financial support because no local bank will be able to raise the necessary funds. Therefore, you must seek out foreign investors and the first question they ask you is what is about the securitisation of your currency as 2025 is the deadline for dollarization in Zimbabwe. Securitisation will give us more confidence in the future,” Dr Louis asked.
In addition to the proposed Zimbabwe Mall, he desclosed that WestPro Holdings Limited has identified the retail sector as the group’s next target market.
“We have long considered the retail industry to be one of our commodities.I believe that we could monitor the market and likely look at REIT.
We should be able to do one of the largest malls in the region, Zimbabwe Mall next year and we should make announcement very soon.”
