ABOUT THIS COUNTRY
Zimbabwe is a landlocked country in southern Africa known for its dramatic landscape and diverse wildlife, much of it within parks, reserves and safari areas. On the Zambezi River, Victoria Falls make a thundering 108m drop into narrow Batoka Gorge, where there’s white-water rafting and bungee-jumping. Downstream are Matusadona and Mana Pools national parks, home to hippos, rhinos and birdlife.
Before the COVID–19 pandemic, Zimbabwe’s economy was already in recession, contracting by 6.0% in 2019. Output fell because of economic instability and the removal of subsidies on maize meal, fuel, and electricity prices; suppressed foreign exchange earnings; and excessive money creation. The onset of the COVID–19 pandemic and continued drought led to 10% contraction in real GDP in 2020. Inflation soared, averaging 622.8% in 2020, up from 226.9% in 2019. Foreign exchange reforms were instituted in June 2020, which dampened an inflation that raged an annual rate of 838% in July.
Reasons to invest in Zimbabwe:
Mining
Healthcare
Manufacturing
Education
Mining
- Zimbabwe has the second largest reserves in the world of platinum and equivalently large diamond reserves. Gold and coal prospects are nothing to ignore. The capital requirements are too big for some investors while the typical politics of extractive industries confound other investors. The reality of the on-ground situation is less tricky than international news sources paint it. But capitalizing on such opportunities still requires a short stop in Harare and understanding the politics. For those investors fearful of entering the extractive processes, there is value-add potential in downstream manufacturing, for example, with jewellery.
Healthcare
- The Zimbabwean healthcare sectors present investors an opportunity to improve both offerings. An influx of illegally imported drugs into the country, along with outdated technology and infrastructure, have not satisfied locals. The Ministry of Health currently does not have personnel stationed at ports of entry to stop illegal imports but have stated aspirations to change this. But security will not fix the sector.
Manufacturing
- The introduction of the dollar to the Zimbabwean economy also introduced higher margins to the products manufactured in the country. An assortment of local Zimbabwean companies have plans to expand manufacturing internally and externally depending on the sector. “Making a product in South Africa and then exporting it back to Zimbabwe makes little sense for me”, says one FMCG manufacturer, but other competitors producing abroad have higher potential. High margins confuse this discussion but over time the development of local manufacturing offers the best potential for transportation and labour costs grow in South Africa.
Education
- Zimbabwe also offers one of Africa’s most literate and educated populace. This has created an outflow of Zimbabweans to neighbouring countries, including South Africa and Mozambique, to a level considered a potential brain drain in the typical emerging economy. But Zimbabwe is not typical. The quality of management in the country has not lost a step because school and on-job training of locals is something to be replicated in other African countries.
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