Zimbabweans Scared To Invest In Risky Local Economy
Zimbabweans are timid to invest in the local economy for fear of losing their assets in this very volatile and risk-perceived business environment, industry has said.
Speaking at the inaugural Political Actors Dialogue (POLAD) economic summit held in Harare today, Zimbabwe National Chamber of Commerce (ZNCC) president, Tamuka Macheka said local investor apathy was a result of high risk perception in the market.
“We need to inspire confidence in the locals to invest. It’s not just about foreign direct investment not coming but it’s also about the people that are seated in this room because the people that are seated in this room have got money that they are not willing to invest into this economy because of the risk,”
“If you can’t invest in your own country why should we expect that somebody will come to your country and invest? So this convergence is very critical,” Macheka queried.
Zimbabwe has experienced low levels of foreign investment, but more glaringly, it has been the lack of confidence by locals to invest in the market.
Zimbabwe’s year on year inflation has shot beyond 500 percent, aggregate demand is currently at its lowest in recent years, corruption is rampant and its currency continues on a free-fall.
The country’s toxic politics remains the biggest setback for business, Macheka added.
“Perception is the reality. If people say your country is risky even if we are here and we have no intention of leaving this country for any reason, this country becomes risky because that’s what they are saying. And what are the ingredients into country risks, it’s the politics. Our politics needs to be addressed, the whole ecosystem but this platform (POLAD) shows we are heading in the right direction,” he added.
Last year Zimbabwean businesses lost over US$ 10 million during a three-day national shutdown organised by trade unions.
More losses were to be met as a results of political disturbances and government policy changes during the course of the year.
The stock markets have not been spared either, particularly post Government decision to float the local currency in February last year which led to assets loss of value in real terms.
Since then, the Zimbabwe Stock Exchange has fallen by nearly a third of its value and local companies are opting to invest offshore as a result.
Recently, the National Social Security Authority (NSSA) invested in Pan-African financial institution – African Export–Import Bank (Afreximbank) and yielded US$2 million in dividend payments between 2017 and 2018.
The POLAD Summit saw various opposition political parties meet the President, Emmerson Mnangagwa and business leaders to forge ways of working together.
Noticeably, was the absence of main opposition party, the Movement for Democratic Change (MDC) which still do not prescribe to the ideas of this grouping.