P resident Emmerson Mnangagwa’s administration is on a crusade to lure foreign direct investment (FDI) to help reboot the economy.
This drive comes after foreign investors have in the past given Zimbabwe a wide berth due to policy uncertainty and toxic laws such as the Indigenisation and Economic Empowerment Act which stipulated that at least 51% shareholding of all businesses operating in Zimbabwe should be in the hands of locals.
The legislation has been reviewed meaning foreign investors can exceed 51% shareholding. Former DTZ-OZGEO executive director Ismail Shillaev (IS) tells Business Times reporter Tinashe Makichi (TM) that government needs to implement policies that enforce investor protection in order to attract meaningful investment, as confidence in the current environment remains unclear.
Shillaev is now chief executive for an investment advisory firm, Keshidale Investments, which has been instrumental in bringing investors mostly in agriculture and infrastructure sectors.
Find excerpts of the interview below:
TM: How long have you been in Zimbabwe?
IS: I have been in Zimbabwe for almost two decades now and have grown to love Zimbabwe as my own country. This country is blessed with natural resources and it’s the wish for any investor to be in Zimbabwe. What I can tell you is that I have really enjoyed my time operating in Zimbabwe despite challenges.
TM: This is rather shocking considering the general investor sentiment about Zimbabwe. What makes Zimbabwe a darling investment destination in your opinion?
IS: Zimbabwe besides the natural resources, it is also blessed with an educated population. That makes it one of the most attractive investment destinations in Africa. Yes, there may be some negative sentiments being raised in some quarters by some investors but that cannot take away what Zimbabwe has to offer in terms of investment. It is paramount to note that Zimbabwe is blessed with qualified, educated and experienced personnel for any form of project to succeed. Protect foreign investors: Shillaev.
TM: What is your take with regards to the Zimbabwe investment destination? Does it offer enough opportunities?
IS: I am of the opinion that Zimbabwe offers a lot and still has a lot to offer with regards to resources for any investor; all that is required is to develop certain areas so that they become more attractive for investment. Russian investors in particular are by nature good at paying attention to detail before making any meaningful investment. I want government of Zimbabwe to understand that mineral resources must be utilised now because with the coming of technology most minerals will be redundant soon. Technology is now creating synthetic minerals for instance on diamond and platinum.
TM: Do you think Russian investments have been treated well in Zimbabwe?
IS: We are fully optimistic of the Zimbabwean investment climate and what is only required is sincerity on policies. Like I said this is the investment environment to be and Zimbabwe is a sleeping giant. The time to invest is now.
TM: So what is your next course of action with regards to the closed operations and your general opinion of what you think must be done by government to improve FDI.
IS: I am of the opinion that government of Zimbabwe needs to take seriously the issue of investment protection. It must come up with consistent laws that are there to protect foreign investors. There is need for clear guidelines on investment protection for Zimbabwe to attract the right investors. This country is a good area for investment considering its location and the vast resources that it possesses but there has to be assurance by government on investment protection. There is need for government to scrap all exchange control regulations in order to attract enough investments. The 50-45 percent foreign currency retention policy at the moment is not doing any good to the economy. Government needs to understand that investors at most instances bring more into the economy and take out less. That’s a fact.
TM: What is your opinion on Zimbabwe’s corporate social responsibility policies?
IS: I think there is need for minimum interference by government on private sector operations. The issue of begging bowels has been a cause of concern for various private sector players. Corporate social responsibility should come from within and should be well-coordinated.
TM: What has been the general sentiment by other Russian businesses towards Zimbabwe?
IS: The sentiment has been negative in the past up until President Emmerson Mnangagwa visited Russia. So at the moment some Russian businesses are still taking a wait-and-see-approach taking from how some Russian businesses operating in Zimbabwe have been treated in the past. There is hope.
TM: Going into the future, what are your plans in Zimbabwe?
IS: We are definitely here to stay and we are trying to engage government through the Mines and Mining Development Ministry on possible areas of investment. Agriculture remains a focus area as well. We have been instrumental in bringing new investors from Russia who have to date been scouting for investment opportunities in Zimbabwe. We will continue selling a good Zimbabwean narrative to investors because we now know what Zimbabwe can offer in terms of opportunities.
TM: Thank you for your time Mr Shillaev.
IS: Thank you for having me.