Faced with an inability to access offshore credit lines — due to defaulting on previous loans — the government of Zimbabwe is appealing to its diaspora population and foreigners to invest in the Southern African nation. Some citizens in the diaspora are skeptical that their investments would pay off.
The government says the Zimbabwe Investment Summit, held Thursday to Saturday in South Africa, was meant to present the Southern African nation positively to the world.
Speaking at the conference, Finance Minister Mthuli Ncube said Zimbabwe’s economy was one of the fastest-growing in the region, and investors should get on board.
“Zimbabwe economic recovery, post-COVID, is strong," he said. "We've seen it move from strength to strength after a dip in 2019 and 2020. In 2021, the economy has been on a positive trajectory, with real GDP growth at 8.5% terms of growth — that is 6.5% in 2022 and a growth rate of 5.5% in 2023. And the growth rate is projected at 3.5% this year, slower growth than the previous three years due to the climate change shocks.”
At the conference, Ncube also promoted various tax rebates and incentives for investors who import equipment, such as buses for a tourism company.
However, Treasure Basopo, an economist who left Zimbabwe three years ago for Norway, says before investors can get interested, inflation has to be tamed and the country must establish confidence in the new currency, the ZiG.
The currency is backed by Zimbabwe’s gold reserves, a method of establishing value that most countries abandoned many decades ago.
Basopo is skeptical.
"The introduction of ZiG defeats by all definitions and by all intents and purposes the characteristics or the traditional characteristics of what is money, which is basically the ability to store a valid durability, scarcity and acceptability,” he said.
Inflation, meanwhile, is running at an annual rate of 55% — lower than the hyperinflation which plagued Zimbabwe in the past, but still high enough to make the cost of living difficult for most ordinary Zimbabweans.
At the investment conference, Ncube voiced support for the ZiG, saying the country needs a domestic currency.
“It’s a currency that is backed by reserves, gold and other precious minerals, as well as hard currency. The exchange still fluctuates," he said. "Will we share with the public how much reserves we have? Yes, we will. There will be an audit of the reserves in our vault of the reserves, and we will be able to share that information periodically to make sure that we can build the necessary confidence in the new currency.”
Basopo said besides lower inflation and a stable currency, investors in the diaspora also want the right to vote in Zimbabwe's elections.
“This is a government which has lost all its goodwill, and it has lost all of its international credibility to access credit facilities, and they want to harvest that money from the citizens for you to demonstrate patriotism. Which is OK, but what we need right now is for the diaspora to have the political rights enshrined within the constitution of the land — right to vote. You cannot invest in a country in which you cannot have a say. You can’t put your money without also having security of the vote,” he said.
VOA made repeated efforts to talk to government officials about the conference but did not get a response.
Government officials say several hundred people attended the three-day event but have not announced any new investments from the conference.
