Zimbabwe Rebuilding Moves Forward In Earnest

Southern Africa: SA Losing Out to Neighbours in Zimbabwe

Charlotte Mathews

17 November 2009

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Johannesburg — SA's neighbours, particularly Botswana, are gaining substantial market share in Zimbabwe at SA's expense, South African Chamber of Commerce and Industry CEO Neren Rau warned yesterday.

The small and medium-sized enterprises that made up most of the chamber's 17000-strong membership regarded the rest of Africa as risky and dangerous and preferred to focus on developed countries, he told the two-day Zimbabwe Trade and Investment Exchange conference in Sandton. But the chamber emphasised the importance of trade with SA's neighbours, particularly Zimbabwe, where the upside potential was considered to be "huge" and the downside limited.

Rau's remarks came shortly after government spokesmen from Zimbabwe and SA confirmed the two countries would sign a long-awaited protection deal on November 27 which would protect South African investments in Zimbabwe.

Rau said Zimbabwe had 45bn to spend over 10 years on rebuilding its infrastructure, compared with SA's 100bn over three years, but SA's capital was largely committed and Zimbabwe's not. SA's economic growth rate this year was expected to be a negative 2% and Zimbabwe's a positive 4%.

Although SA's exports to Zimbabwe were now mainly basic goods such as industrial supplies and fuel, the chamber expected Zimbabwe's purchases of capital goods would increase over time.

Denis Worrall, chairman of conference organisers Omega Investment Research, said if the Southern African Development Community's 30-day deadline to Zimbabwe to implement a unity government was met, Zimbabwe needed to take certain steps to secure economic recovery.

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Zimbabwe's problems were far greater than anyone realised. It had lost the ability to regenerate its economy and its capital base had been ruined, Worrall said.

Sanctions should be lifted as soon as possible and independent auditors should be used to administer international funding. But foreign investment would only work in a reformed environment, he said.

Zimbabwe had to rebuild its commercial farming sector, which had always been its tax base, while extending aid and advice to small- scale farming.

Control of the army and police had to be depoliticised as they had been discredited by their allegiance to one political party.