Zim business plots Euro assault

HARARE - After 13 years of rowing between the European Union (EU) and President Robert Mugabe’s administration over alleged gross human rights violations and flagrant disobedience of the rule of law, the Africa-EU summit opens the door for re-engagement and economic support for Zimbabwe’s struggling economy.

Senior Assistant Editor Guthrie Munyuki interviews Confederation of Zimbabwe Industries (CZI) president Charles Msipa ahead of the Brussels meeting next week and below are the Excerpts.

Q: How important is the Africa- EU summit to Zimbabwe?

A: The EU-Africa Business Forum will run back-to-back with the Africa-EU Heads of States and Governments Summit on March 31 and April 1 in Brussels.

The Government of Zimbabwe is best-placed to respond to the question on the importance of the Africa-EU Heads of State and Governments Summit for Zimbabwe.

Regarding the importance of the EU-Africa Business Forum to Zimbabwe, the level of trade between EU and Zimbabwe underscores the significance of the commercial and economic relations between Zimbabwe and the EU.

The EU is Zimbabwe’s second largest trading partner with total trade in 2012 of $942 million, of which Zimbabwe exported goods valued at $620 million and imported goods valued at $322 million.

The EU and its member countries account for over 55 percent of Zimbabwe’s public external debt.

The trade and debt position bear testimony to the vital economic relationship between the EU and Zimbabwe.

The EU-Africa Business Forum will bring together 500 high-level participants including business leaders and government officials from across Africa and Europe and represents a unique and significant opportunity for Zimbabwean private sector representatives and government officials to network and exchange views on EU-Africa business and investment relations, to raise the profile of doing business in Zimbabwe as well as to exchange ideas on ways of improving the business and investment climate to promote sustainable and inclusive development in Zimbabwe.

Q: What are industry’s expectations at the Africa-Euro Summit?

A: Zimbabwe private sector will be represented at the EU-Africa Business Forum.

As you will recall, a private sector delegation visited Europe, including Brussels in January 2014 and had constructive dialogue with EU officials, European business leaders and government officials regarding restrictive/appropriate measures by the EU on Zimbabwe and business and investment relations between EU companies and Zimbabwe. The EU-Africa Business Forum presents a platform for the Zimbabwean representatives (business executives and government officials) to build on the constructive dialogue that commenced with the visit of the private sector delegation to the EU in January 2014, to make a pitch for increased trade and investment opportunities between Zimbabwe and EU and to network with African and European business leaders and government officials.

Zimbabwe’s industry and economy will have to re-establish links and integrate with regional global value chains as part of restoring its competitiveness.

The networking and exchange that occurs at such fora provides the impetus for collaboration, relationships and partnerships between Zimbabwean companies and their African and European counterparts.

Q: What are the immediate benefits to industry and commerce?

A: There is potential to expand the existing trade between Zimbabwe and EU to the benefit of Zimbabwe’s economy.

I have no doubt that some of the Zimbabwe private sector representatives will use the forum to establish and expand business and trading relationships.

As indicated previously, the forum provides an opportunity for the Zimbabwean delegation to make an investment pitch to 500 high-level potential investors-as well as to get feedback on what factors matter to investors and on how we can improve our investment and business climate.

Q: Could the benefits be tied to your European tour earlier in the year?

A: Our European tour in January 2014 provided an opportunity for us to present a private sector perspective on economic developments, prospects and investment opportunities in Zimbabwe, as well as to register our conviction with our interlocutors at the EU and from the private and public sectors in Belgium, Britain, France, Germany and Switzerland that EU restrictive/appropriate measures on Zimbabwe are harmful to business and to our economy and our desire for the restoration of full economic and commercial relations between EU and Zimbabwe. Our private sector perspective was well-received and appreciated by our interlocutors.

The visit was a private sector contribution to an engagement process in which the Government of Zimbabwe and other actors, including Zimbabwe Investment Authority (ZIA) and civil society, each play critical roles. As indicated previously, the EU-Africa Business Forum is an opportunity to extend and deepen the dialogue that we commenced in January 2014 with private sector representatives of European companies.

Q: Were you successful in your engagement efforts with the EU and investors?

A: I had the privilege to be part of a private sector delegation comprised of business leaders from Bankers Association of Zimbabwe (BAZ), Chamber of Mines Zimbabwe (COMZ), Confederation of Zimbabwe Industries (CZI) and leaders from tourism, ICT and other sectors that visited five European countries in January 2014.

We were very well-received and had constructive dialogue with high level representatives at the European Commission in Brussels as well as representatives of the Belgian Government, and with private sector and government officials in London, Paris, Berlin and Berne.

We received tremendous support for our mission from the Head of the EU Mission to Zimbabwe as well as from the Ambassadors of Britain, France, Germany and Switzerland, respectively, to Zimbabwe.

We were successful in contributing a private sector perspective to the EU re-engagement process.

We have continued to build on business and commercial relationships that were established during our visit and maintain contacts with potential investors some of whom have visited Zimbabwe to make first-hand assessments of the business and investment climate since our return.

We also maintain dialogue with policymakers on feedback we received from potential investors on the “shortcomings” in our investment and business climate compared to other countries in the region that are also actively promoting FDI.

We also met with European Investment Bank officials who confirmed their willingness to provide medium-term finance to the private sector in Zimbabwe and will be undertaking a follow-up mission to Zimbabwe soon.

And we also met with several European Development Finance Institutions who have provided funding to private sector players in Zimbabwe and are considering or have already extended and expanded the funding support to Zimbabwe private sector institutions.

Q: What are the immediate areas that will be funded by the EU grant?

A: The Head of the EU Mission to Zimbabwe is best-placed to respond to questions concerning current and future EU support to Zimbabwe.

Q: Do you have government’s support in your engagement with the prospective European investors?

A: Yes Sir. The private sector visit to Europe was our initiative in support of the government’s policy to re-engage with the entire international community, including the EU and to promote foreign direct investment.

We had the blessing of the government to undertake the mission and Zimbabwe’s Ambassadors to the EU, Britain, France and Germany rendered invaluable support to us and joined our meetings in the respective locations as observers. We kept the minister of Industry and Commerce, Honourable Michael Bimha briefed on the progress of our mission and presented our report of our mission to him on our return.

We maintain dialogue with policymakers on ways of improving our investment and business climate, based in part on feedback we received from potential investors

Q: What are the grey areas that need smoothening to attract European investment?

A: We met with diverse groups in each of the locations we visited, some were well-informed of the situation in Zimbabwe, some are “friends and fans of Zimbabwe”, some are existing investors and some knew very little or had very negative perceptions about Zimbabwe.

Some specific, key concerns that were raised by potential investors include instances in which weviolated Bilateral Investment Promotion and Protection Agreements (BIPPAs) during the land reform programme and our policy and laws on indigenisation.

It is clear that we have to earn the trust and confidence of both domestic and foreign investors by implementing policies that are consistent, stable and clear in promoting sustainable and inclusive economic growth and development.

Q: How are the prospective European investors viewing the indigenisation programme?

A: Many potential and prospective investors gave us feedback that our policy and laws on indigenisation  are a barrier and roadblock to investing in Zimbabwe more so when they compare our investment climate with those obtaining in Mozambique, Zambia, South Africa, Ethiopia, Kenya, Ghana, Nigeria  and other markets that have and continue to attract significant investment.

Q: How significant is the near total removal of sanctions to Zimbabwe — EU economic relations?

A: Considering the numbers of individuals and entities to whom the restrictive measures applied when they were originally introduced in or about 2002, the gradual suspension and easing of the measures over time on many individuals and entities, including the most recent announcement by the EU are welcome,positive and significant developments in the right direction.

However, all the actors — Zimbabwe Government, EU and EU member countries, SADC and African Union countries, civil society and business — have key roles to play to work towards the removal of all the restrictive/appropriate measures and to restore full economic relations and corporation between the EU and Zimbabwe.

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