Mangoma appeals for S African investment
March 30, 2009
Elton Mangoma, Economic Planning Minister
By Mxolisi Ncube
JOHANNESBURG – Zimbabwe’s Minister of Economic Planning and Investment Promotion, Elton Mangoma, says that Zimbabwe’s government of national unity will formulate policies that will ensure a socio-political environment that is conducive for economic growth, as it bids to revive the country’s battered political and economic image.
Mangoma, who made a presentation at KPMG South Africa, in Johannesburg Monday, said that the new government would revisit the land reform, which has been blamed for the country’s economic downturn, and the quasi-fiscal operations of the Reserve Bank of Zimbabwe, which he said were responsible for causing hyper-inflation.
“There will be no money printing which has been the major source of money supply growth resulting in high inflation levels,” said Mangoma.
“The Reserve Bank of Zimbabwe will desist from funding quasi-fiscal operations and hence will now concentrate on its major mandate of ensuring the stability of prices and the financial sector.”
Mangoma, who is from Prime Minister Morgan Tsvangirai’s mainstream Movement for Democratic Change, added that the all-inclusive government would institute a land audit in an bid to restore the country’s agricultural sector, which was destroyed by Mugabe’s land reform program of 2000.
“….the issue of farm invasions is also under consideration to ensure that this is stopped forthwith as it sends wrong signals to investors,” said Mangoma.
“The issue of security of tenure will also be pursued to enable farmers to freely make investments on their farms. Zimbabwe will be a law abiding country and will respect property rights as well as the rule of law.”
The Minister also promised that Zimbabwe’s inclusive government would embark on the drafting of a new “people-driven Constitution as a matter of urgency”, while also restoring media freedom.
“The Inclusive Government will liberalise the air waves, free the media, and ensure that plural voices are heard through both electronic and print media.
“…undertaking legislative reforms intended to strengthen good governance, accountability and promoting the rule of law as well as equality and fairness, including gender equality.”
He added that Zimbabwe was also working on strengthening relations and diplomatic ties with the international community, in a bid to garner international support.
“We are now re-engaging the international community to mobilise support for the resuscitation of social services, utilities, and infrastructure,” he said.
“A multi-pronged approach to engage the international community is focusing on restoration on normal diplomatic relations, unlocking critically needed balance of payments financing, foreign debt rescheduling and renegotiation as well as clearance of outstanding external payment arrears.”
Mangoma appealed to South African companies to boost his country’s economic recovery efforts by recapitalising their Zimbabwean subsidiaries, and opening lines of credit to Zimbabwean companies.
“The South African private sector can play a significant role in the economic recovery through recapitalisation of South African companies in Zimbabwe which are currently operating at low capacity levels. These companies need injection of resources to enable them to increase their production,” he said.
“South Africa can also benefit through advancing lines of credit to Zimbabwean companies which are operating at low capacity levels.
“South Africa will tend to benefit both as companies as well as a country if credit lines are extended to Zimbabwe.
“These benefits include optimal capacity utilization by South African companies, preservation of jobs and consequently keeping the current global recession out of South Africa as well as re-establishing the Zimbabwe market which dwindled.
“The total requirements by Zimbabwean companies are in excess of US$1 billion, for an initial ten-month period, to facilitate the same to raise capacity utilisation from 10 percent to about 60 percent. Therefore, we are requesting the South African private sector to support these companies with lines of credit.”
He said that Zimbabwe would be able to repay these loans with proceeds from exports of cotton, tobacco, horticulture, gold, platinum, remittances and receipts from tourism.
“Zimbabwe is also making concerted efforts to attract foreign direct investment and it is anticipated that such efforts will bear fruit and hence generate foreign currency that will also assist in repayment of these lines of credit.”
Mangoma said that Zimbabwe’s recovery would bring significant benefits to the South African economy, through increased employment, export earnings as well as remittances from profits earned by Zimbabwean subsidiaries of South African companies.
“Therefore, the assistance advanced to Zimbabwe by the South Africans will result in a win-win situation for both countries.”