Dangote deal: Test for Zim investor climate

HARARE - Nigerian billionaire Aliko Dangote’s plans to invest millions in constructing a cement plant in Zimbabwe will test the country’s investor climate which has previously scuttled several promising multi-million dollar deals, analysts have said.

Africa’s richest man made an inaugural visit to Zimbabwe last week, and outlined his company’s interest in investing in coal mining and power generation.

Dangote’s Investment is being closely watched as a yardstick of the country’s investor friendliness.

The proposed investment could give major economic boost to the mineral-rich southern African country that is currently grappling with a slump in global metal prices and a severe liquidity crunch.

While Dangote’s investment promises to create much-needed jobs for Zimbabwe, analysts warn that the billionaire would likely have problems in stitching the deals given policy inconsistencies affecting investment in a corruption-ridden government that thrives on bribes.

If government permission is expeditiously granted as promised, construction of the cement plant will begin during the first quarter of 2016, according to Dangote, and the plant will produce 1,5 million tonnes of cement a year.

Political commentator Mcdonald Lewanika said if Dangote’s business is straight forward, it will be affected by the inconsistencies and contradictions implicit in Zimbabwean investment policy.

“But given the manner in which Dangote is coming on board, and the sponsorship that seems to be there from the powers that be, it seems he will be ingratiated into the patronage system and is unlikely to be affected by the challenges that other investors face, pretty much in the same fashion that we know foreign companies mining diamonds in Marange have not been subjected to these stringent rules and requirements in an adverse manner,” Lewanika told the Daily News on Sunday.

He said indigenisation laws have not been applied impartially, and Dangote maybe a beneficiary of that partiality, given his political connections.

“Our only consolation is that Dangote seems to be a responsible investor judging from their Zambian, Tanzanian and other ventures,” he said. “We hope that this responsible investing which has created employment and boosted infrastructure and national purses of these countries will be retained in Zimbabwe.”

Mining activist Farai Maguwu said even if the country was to get an investor from the moon, the investor would find it hard to do business in Zimbabwe.

“It is not necessarily about investors but rather it is about the operating environment, policy inconsistencies and uncertainty of the future,” he said.

Dangote’s Zimbabwe investment was pioneered by a Zimbabwean journalist working in Nigeria.

Media activist Tabani Moyo said capital is a very timid animal, adding that its response to frightening government interventions like non-respect of property rights, hostile company grabs, policy inconsistency will spook investors.

“Zimbabwe has a huge potential. Once the messed up politics is sorted, it has the good tourism conditions, climatic environment, untapped mineral resource base and skilled personnel,” he said.

“As a matter of fact, Zimbabwe is at the crossroads with a generation from the liberation war and pre-independence nationalist era seemingly reluctant to pave way to the post-independence generation which is yearning for a new socio-economic and political dispensation,” Moyo said.

Unfortunately, adds Moyo, Zimbabwe is undoubtedly in a catch-22 of being stuck with the pre-independence nationalists, while at the same time yearning for a new future, but being unable to do much about it.

“It is unfortunate that the country is structured if not entrapped to the whims and unpredictable dictates of the ruling Zanu PF and the determination of its aged leadership to hang onto power.

“Once the stupid politics is addressed, investment floodgates will open and the people of Zimbabwe will be happy and free again.”

Businessman Shingi Munyeza said the fact that Dangote has made an effort to visit Zimbabwe and meet with the head of State is a sure sign that he will invest.

“He has serious time constraints and he would not waste his time on something he is not interested in. I’m confident that he will do well in the areas that he has chosen because it appears he will have the first mover effect for those with substantive capital like him.”

Dangote, who is Africa’s richest man with a fortune estimated at $17,4 billion according to Forbes, is aggressively expanding his cement business across Africa.

In June, he launched a 2,5 million metric tonnes per annum (mtpa) cement plant in Addis-Ababa, Ethiopia, and commissioned a $250 million factory in Cameroon.

Comments (4)

Why does a bona fide invester have to meet the president? Did he meet the relevant ministers or principal directors in the areas of his proposed environment! I know of one Patrice Motsepe, from down south, who came in as an ivester but was quickly converted to a family friend by the first family and got a personal invitation to bona's wedding! Is that a transparent way of gandling investers! Who am I to think thats not corruption?

jojo - 6 September 2015

~my neighbor's sister-in-law makes $68 /hour on the internet . She has Been fired for ten months But last month her income was $18319 just working on the internet for a few hours. hop over to hereCopy This Link.....>>>http://korta.nu/Mv8

RogerMPopp - 6 September 2015

Certainly not a way to handle investors at all, but if Mr Dangote is planning for the future in this rich poor country, the main and most popular opposition figures are the ones to confer with. I guess there were or will be underground engagements.

Mistadete - 7 September 2015

OUR politicians are everything, BUSINESSMAN, LEGISLATOR, POLICEMAN, FARMER, INDUSTRIALIST, JUDGE, CON ARTIST, ETC. The goose will not lay eggs, if it does,all will be fried, no chicks. MA1.

EL-DODO - 7 September 2015

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