HARARE - Government must develop a national branding strategy aimed at revamping Zimbabwe’s image as part of efforts to attract foreign direct investment (FDI), analysts say.
Tafadzwa Matiza, a researcher with the University of Limpopo, says the country must shake off its “bad boy” tag if it is to raise hopes of getting a significant chunk of the anticipated $100 billion FDI inflows into Africa in 2014.
“In an increasingly globalised world the role of nation branding in facilitating FDI is that nation branding assumes the symbolic meaning to investors as the development of a value proposition (brand) that represents the multidimensional intangible value of a nation in comparison to other nations, thereby creating competitive advantage and differentiation,” he said.
Matiza noted that Zimbabwe’s predominantly negative image as an investment destination and a contradictory image as a nation in general have a significant effect on the country’s ability to attract FDI and its investment promotion efforts.
The southern African country has been experiencing significant declines in foreign direct investment (FDI) since 2000 mainly because of the political situation in the country which triggered uncertainty over property rights after the land reform programme.
Most of the country’s 4 000 white farmers –— then the backbone of the country’s agricultural economy — were forced from their land, which was handed over to about a million black Zimbabweans.
Shortly afterwards, Western nations imposed targeted sanctions on the ruling elite and companies linked to them following what they termed a breakdown in rule of law and abuse of human rights, but Zimbabwean authorities routinely blame these for all the problems that the country faces.
During the period, FDI inflows into Zimbabwe declined from $444 million in 1998 to $60 million in 2009.
Economic experts blame the land redistribution exercise for triggering Zimbabwe’s worst economic crisis in history characterised by runaway inflation and foreign currency shortages that resulted in the trapping of foreign capital which could not be repatriated due the hard currency woes.
Although the country has made significant inroads in attracting foreign capital since 2009 following the establishment of a unity government and subsequent political and economic stabilisation, economic experts say Zimbabwe must change its economic policies if it hopes to attract more FDI.
In a study called “Nation Branding as a Strategic Marketing Approach to Foreign Direct Investment Promotion: The Case of Zimbabwe” published recently, Matiza noted that the new government must strongly consider initiation and development of a nation branding strategy aimed at revamping the image of the country as a whole, accentuating the positive image of Zimbabwe while simultaneously trying to change the realities that give rise to its negative image.
“Once Zimbabwe has established a nation branding programme we recommend that the government through its ministry of Finance and Economic Planning and its stakeholders work out a long-term strategy for a more positive investment destination profile via concrete developments and improvements on the problematic fields and the allocation of budgets to investment brand image development activities,” he said.
“This implies creating an enabling environment for investment and effectively marketing it thereof.”
This comes after Zimbabwe was recently rated among high risk investment destinations in Africa by an Ernst & Young survey.
In its “Africa by numbers: Assessing market attractiveness in Africa” survey, the financial advisory and consultancy firm noted that the southern African country — still suffering a hangover from a decade-long recession — is among a group of countries that are “relatively high risk environments and which do not exhibit particularly exciting growth characteristics”.
“Logically, these are the obvious markets to say no to, although some may still be worth a closer look or at least keeping on a ‘watch list.’”