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By Calvin Manika
THE just ended 77th United Nations General Assembly witnessed major side-line events earmarked to boost business in the African continent. Many investments are being witnessed in the Global South including Africa, a continent with a vast of opportunities.
According to the United Nations, the Global Africa Business Initiative is designed to highlight opportunities on the continent where every sector of the economy from manufacturing to agriculture to services to finance is on a growth trajectory. The initiative creates a business environment to benefit investors and other economic players through bringing ideas and capital economic growth as well as sustainable development.
The International Monetary Fund (IMF) classifies Zimbabwe as “in debt distress.” Domestic debt has grown in recent years due to large fiscal deficits, quasi-fiscal activities by the Reserve Bank of Zimbabwe (RBZ), which include the accumulation of parastatal debt and a large public wage bill.
“For a country facing challenges on high levels of foreign and domestic debt, poor infrastructure, and low capacity utilization Zimbabwe welcomes the global business initiative. It is an opportunity to re-assess and re-configure the economic polices with the aim for creating international partnerships and internal business growth,” said Leeroy Shoriwa, a Harare based economist.
For a long-time, Zimbabwe’s economy has been informal, with the World Bank estimating 90% of the population working in the informal sector. On Economic Freedom, regionally, Zimbabwe ranked 45th out of 47 countries in the sub-Saharan Africa region. Economists say Zimbabwe must work on improving its global competitiveness and ease of doing business strategies.
Under the leadership of the Deputy Secretary General of the United Nations, Amina J. Mohammed, the inaugural Global Africa Business Initiative which took place during the United Nations General Assembly week from 18-19 September 2022 was designed to place Africa in its proper spot on the world stage, bringing to focus a roadmap for Africa that is sustainable, inclusive, just, and managed by Africans for Africans.
Organized by the UN Global Compact, the gathering included a range of leaders representing Heads of State and Government, the United Nations and business sectors, such as technology, sports, fashion, and entertainment, with more poised to participate in this opportunity for the private sector and the public sector to accelerate Africa’s sustainable economic growth.
In a statement, the United Nations said the initiative presented an opportunity for Africa to showcase its powerful business ecosystem, “when activated brings prosperity to all Africans and citizens of the world.”
Zimbabwe is a member of the World Trade Organization. It also belongs to the 22-nation Preferential Trade Area (PTA) of Eastern and Southern Africa, which provides for reduced duties on imports from member countries subject to certain rules of the pact. Zimbabwe is also a member of a number of other regional trade agreements, which provide frameworks for the further liberalization of trade. In February 2020, Zimbabwe officially joined the African Continental Free Trade Area (AfCFTA), which aims to create a single continental market for goods and services.
Zimbabwe experienced turbulent years in terms of its monetary policies, with continued instability, significant currency changes and skyrocketing inflation. Marvin Chengeta, a banking expert said sound monetary polices and a stable economy will help Zimbabwe to participate actively in Global Africa Business Initiative.
“In June 2019, the use of the U.S. dollar and other foreign currencies was outlawed for most transactions just before the introduction Zimbabwe dollar notes there was an outcry. The re-introduction of the use of foreign currency and inclusive policies is a cornerstone for economic development.The use of Zimbabwean dollars, and other foreign currencies helps both local and foreign players in the business,” said Chengeta.
At the Inaugural session of the Global Africa Business Initiative, leaders committed themselves in accelerating sustainable business growth, development and prosperity in Africa. The gathering was held under the slogan ‘Unstoppable Africa’, with the ultimate goal to unlock Africa’s full potential, and provide insights to catalyse new and dynamic financing and partnerships.
A guarantee of property rights to investors have been questionable in Zimbabwe since the land reform program, which resulted in thousands of white farmers losing their land without compensation. Experts said Zimbabwe has great potential for business development and growth from international investors if it comes up with attractive policies.
In 2020, Zimbabwe agreed to an historic $3.5 billion deal, which is envisaged to compensate white farmers for the infrastructure on their farms, but not the land itself. The government hopes the deal will restore international confidence in Zimbabwe and attract the much-needed foreign investment.
