Perception is reality

HARARE - Perception is reality, so it is said. What is perceived is regarded as real.

In most cases, once a negative perception tag is attached to something or someone, it is extremely difficult to shake off.

That’s the crisis for Zimbabwe — a major one, particularly for its new leadership — President Emmerson Mnangagwa and his administration.

The 75-year-old politician inherited a country hounded by strong negative perception, mostly caused by his predecessor — ousted 94-year-old Robert Mugabe, although he is complicit as they worked closely together.

Due to long years of misrule — violation of human rights, lack of respect for property rights, policy inconsistences, and intolerance of the West and other nations, among other wrongs — Zimbabwe attracted attention for the wrong reasons.

Most nations and administrations red-flagged Zimbabwe, categorising the country as a high-risk nation, especially as an investment destination.

And this long-standing problem, which has blocked many economic opportunities for the desperate and investment-starved country, did not end with Mugabe’s departure.

It lingers.

And according to Equity Axis — a financial intelligence and research firm, that’s the case for Zimbabwe today — still haunted by negative perception.

Last week, the firm, very qualified to comment on such matters, said “what potential investors are doing is to position themselves and acquaint to opportunities which will only materialise once fundamentals become more favourable”.

Interestingly, Equity Axis went on to say Zimbabwe received foreign direct investment (FDI) of just half a billion dollars, a far cry from the $3 billion claimed to have been earned during Mnangagwa’s first 100 days in office.

“For starters, a capital commitment does not equate to actual flows but potential flows and a case for the yesteryear ‘mega deals’ with a similar value are worth noting,” it added.

This simply means that it’s not a given or guaranteed that Zimbabwe attracts investment because Mugabe — long viewed as the stumbling block to the once prosperous nation’s progress — is now out of the picture.

Mnangagwa et al ought to earn the international community’s trust and confidence first.

That negative perception tag needs to be shaken off first.

To bolster the argument, last week a respected business weekly quoted Ngoni Mudzamiri, a partner with Ernst & Young, in a story saying exactly the same — Zimbabwe must improve international perception to reduce investment risk in order to attract foreign capital.

“Over the last few years, Zimbabwe has been seen as a risky investment destination such that when you try to access loan financing, the interest rates are very high and punitive,” Mudzamiri said.

“If you look at European companies, they are able to borrow money for as little as three or four percent, sometimes less. Yet our banks, a lot of our institutions, are borrowing at more than 10 percent,” he argued.

He said a reduction of risk would “enable businesses to start performing a lot better”.

“If you have an asset and you want to charge a million dollars for it, you may find a foreigner who is only prepared to pay $500 000 because of the perceived risk,” he said.

Now, this means the leadership has a lot of work to do, beyond the “Zimbabwe open for business” mantra.

It needs to win back the lost confidence and trust — convince investors and the international community that they are safe and secure in Zimbabwe’s hands.

It needs to walk the talk.

That’s why there was disappointment over Mnangagwa’s first 100 days in office.

Investors and the international community, just like the long-suffering Zimbabweans, want to see and feel the change.

Most perceive Mnangagwa as just the same as Mugabe — fruits from the same poisoned tree.

Perception is reality.

Comments (2)

It is true that perceptions are real and have to be dealt with. I hold a very positive perception about the land reform instituted in Zimbabwe because it conditions/prepares the black African to re-look at the misplaced perception that white capital is Africa's saviour. White capital is based on slavery, colonialism and exploitation of Africa and the developing world (human rights abuse). The truth is that the West should pay Africa and Zimbabwe reparations for slavery, colonialism and exploitation. The perception that white capital is Africa's saviour is none other than real deception.

ADF - 20 March 2018

This is an old argument and presents conflicting ideas. @ADF you're suggesting the offspring of slaves be paid by proceeds from slavery? Who should these proceeds be paid to? The current thieves in power - the vile idiots stealing from their kith & kin?

Sagitarr - 22 March 2018

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