Upcoming Elections a Major Test of Zimbabwe’s Readiness for Foreign Investment

After years of sanctions and hesitation among private investors, Zimbabweans hope a fresh era with a new president will attract jobs to their country. If a July 30 election is viewed as free and fair, the rest of the world is much more likely to view Zimbabwe as a potentially lucrative destination for investment, analysts say.

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Upcoming Elections a Major Test of Zimbabwe’s Readiness for Foreign Investment

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HARARE, ZIMBABWE — Days after what appeared to be an assassination attempt, Zimbabwean President Emmerson Mnangagwa told a BBC correspondent that Zimbabwe was safe for foreign investment.

In an interview in which the man nicknamed “The Crocodile” referred to himself as “soft as wool,” Mnangagwa also said that Zimbabwe was the most stable country in the region.

But will Mnangagwa’s words, just weeks ahead of a July 30 presidential election that he’s expected to win, be enough to soothe concerns that the country isn’t ready for an influx of investment?

Ashton Murwira, who lectures on politics at the University of Zimbabwe, says the administration’s apparent reluctance to respond with force against political opponents, including the ones who detonated a bomb in June at a rally he attended, is a sign that the regime can behave maturely and let police investigators do their jobs.

“The elections are going to be a benchmark to check if Zimbabwe can be fully readmitted into the family of nations, from a Western point of view,” Murwira says.

Western nations – particularly those with money to invest in Zimbabwe – are looking for signs of functioning democracy during the election season, he adds.

Mnangagwa’s cool response after the bombing is a major shift from the leadership style of former President Robert Mugabe, who ran the country from 1980 until late 2017. Mugabe frequently quashed dissent with violence. His government’s seizures of large, commercial farms from white owners, ostensibly to give them to black Zimbabweans, were carried out haphazardly and often with little regard to the dignity or safety of the people being evicted. Political opponents feared for their lives. Supporting opposition candidates meant risking violence and torture by the regime.

Those and other actions led to widespread sanctions against Mugabe personally and against the entire country. Those sanctions, in combination with Mugabe’s mismanagement of the national economy, pushed the country into a severe crisis.

Zimbabwe is flush with natural resources, including gold and diamonds, but foreign investment into the country has been anemic for decades. Both the World Bank and the International Monetary Fund stopped lending to Zimbabwe because the country was so far behind on payments. Western nations enacted strict sanctions because of the human rights abuses that Mugabe routinely carried out.

Mnangagwa took office in November, just after Mugabe was pushed from the presidency. Nearly immediately, he made bold claims that Zimbabwe is “Open for business!” So far, Murwira says, the president has made multiple deals that are likely to result in investment, but those deals haven’t been put into action yet.

“In our case, the new administration has only been in power for eight months – no investor will invest in a government they think will lapse after the elections,” he says. “The investors are coming, they are expressing interest and signing MOU’s. However, the actual inflow of foreign direct investment will come soon after the July elections are over.”

Lawrence Mandara, a political science lecturer at the University of Zimbabwe, says a full-term Mnangagwa presidency will bring fresh investment interest.

“With this new dispensation, there has been some interest in Zimbabwe which has never been recorded in the past 20 years from many countries,” he says.

Mugabe’s penchant for Chinese investment generated anti-China sentiment, but this new interest from other countries will force Chinese investors to bring better offers to the table, he adds.

Sharon Hofisi, a lawyer and University of Zimbabwe lecturer, says a better investment environment is likely, if Mnangagwa is elected.

“Judging on the new culture of openness, we are likely to witness a significant change,” he says. “We have seen the government re-engaging with countries previously alienated by the government.”

Still, Mandara notes, the fresh investment interest could dissolve, if the election isn’t peaceful.

“Where there are conditions of insecurity, there is obvious political risk,” he says.