Mega deals should not be at the centre of an investment push, but rather focus should be on small investments which are able to contribute to the socio-economic growth of the country, according to the Japanese Ambassador to Zimbabwe Toshiyuki Iwado.
In a wide ranging interview with BT Inside Politics Iwado said government should not focus only on mega deals, the bulk of which fail to take off, but should instead treat all investors equally. He said that while Japan has not given Zimbabwe any mega deal, the projects the country was working on, such as Nyakomba Irrigation and the Chirundu North Corridor construction had significant ripple effects on the economy and would easily alter the standards of living of the general populace.
The following are excerpts of an interview the Ambassador (TI) had with our writer Tinashe Makichi (TM).
TM: What is your overview of the current situation in Zimbabwe and what is the policy position of your country with regards investments.
TI: We are closely following political and policy statements being made by the new political administration led by President Mnangagwa. The contents of the President’s statements are encouraging but economic activities are almost always driven by the private sector. They usually don’t act on statements but they act on reality. So far a number of initiatives have been put in place. That is my observation.
So for the Japanese investors to invest in Zimbabwe, they need to operate here and make money. How do investors operate without free repatriation of dividends back in Japan and how do they procure raw materials in a country where foreign currency is a challenge? These investors are not there to make donations but are there to make money. I am trying to be very honest because I believe that this political administration is not limited but I want them to act on their statements. So many Japanese people including private sector are keen to watch if the statements being made will come to fruition.
TM: How in your view should government handle its investment message?
What I would want to say is that if you look at everyone in Zimbabwe, talk at the moment is about economic relations. It should not only be about mega deals. According to our experience as Japan, companies like Toyota and Honda, did not start big but they started small. Therefore, we should not treat companies according to the size of investment but we must treat them equally. That is my perspective, treat investors equally.
TM: Considering the coming of the new dispensation, what has been the performance of trade between Japan and Zimbabwe?
TI: There has been no real change and this is from the fact that seven to eight months is too short to see any meaningful change. What’s important is to see is the real intention of the new administration, so it’s too early to say and we will see.
TM: Do you think the prevailing political environment is conducive for a free and fair election?
I think it is up to Zimbabwe to honestly answer that but it is very important for us not to only look at it from a political point of view but from an economic point of view. The economic relations usually prosper if the political situation is stable. Elections are certainly very key and the political climate in general is relatively good. There are some concerns over some political statements coming from different political parties and some specific issues claimed to not have been solved, so I look at the situation in a positive manner because there are several good things happening.
There has been a shift of late where newspapers have been giving coverage to all political parties or presidential candidates. It means that the current situation is trying to stick to the rule of law. The rule of law seems to be prevailing. This is such a good sign. But I understand there is a divided opinion in some newspapers.
TM: What has been the size of grant aid channeled towards Zimbabwe in recent times
TI: We have been a good partner for Zimbabwe and on the Chirundu corridor we have made available $21 million and since independence to date our ODA is over $1 billion and just before my arrival, there was the Nyakomba irrigation scheme which is a $15 million project and that is a grant. $1 million was also made available to support the electoral process through UNDP.
We call this funding a grant because at the moment we think Zimbabwe is not in a right position to receive huge amount of loans. All the aid coming from Japan are grants. So as a diplomat I have been very keen on seeing how this Government and some stakeholders are utilizing the funds because we are responsible and we need to be accountable.
TM: Please can you provide an update on the progress made on the Chirundu North Corridor construction.
TI: Japan availed $21 million for this project, which is meant to make the road safer especially between Makuti and Chirundu road. We learnt that the area is the most dangerous in terms of accidents. This is in fact the third project that Japan has supported to improve the North-South Corridor’s infrastructure. At the beginning of this century, Japan supported the construction of the new Chirundu Bridge in order to address another bottleneck of the corridor affecting regional trade.
Japan also supported the establishment of the Chirundu One-Stop Border Post to facilitate economic exchanges between Zimbabwe and countries in the region. The North-South Corridor facility is not a loan aid but a grant aid and that means we will not do the whole corridor but we will focus on the critical part of the corridor and the needy area.
TM: Why have Japanese companies not considered setting up a vehicle plant in Zimbabwe considering its centrality to the Sub-Saharan Africa market?
TI: It’s a question that I think must be asked the Japanese private sector people. But the very short history since Independence, most Japanese companies focused on Zimbabwe because of its geographical location. From my understanding there are a lot Japanese companies looking at Zimbabwe. If the economic circumstances in this country are made conducive, the investors from Japan are bound to come and at least as far as I know in the 20th Century many Japanese companies had offices in Zimbabwe but that changed when the Southern African country’s economy started going down.
