Wednesday, October 6, 2010

The scramble for Zimbabwe has already begun

The Scramble for Africa, also known as the Race for Africa, was a process of invasion, attack, occupation and annexation of sovereign African territory by European powers during the New Imperialism period, between the 1880s and World War I in 1914. (Source Wikipedia).

I wager that we have begun to see the scramble for Zimbabwe but this time it will not be characterised by any attacks, occupations and annexation but rather by billions of US dollar touting investors from all over the world as they seek to get their stake of Zimbabwe's vast mineral resources. Already on Tuesday it was reported that Zimbabwe's government received five bids for its 70% stake in Zimbabwe Iron and Steel Co.

Zimbabwe has the second largest deposit of platinum reserves in the world. Zimbabwe has a good percentage of the world's known reserves of metallurgical-grade chromites. Other commercial mineral deposits include coal, asbestos, copper, nickel, gold, and iron ore and lately diamonds. In order to develop these mineral deposits, the country needs billions of dollars. Zimbabwe has well skilled population, excellent climate and numerous opportunities in all sectors going forward.

The deterioration of infrastructure and social services over the last ten years provides significant opportunities for investors; there is no doubt about that. China is quietly already there so are the Russians. Opportunities also exist in agriculture and related industries where farms and companies are lying idle in need of new capital. The one thing about Zimbabwe is that, because of ZANU (PF)'s mismanagement of the economy since 2000, basically all industries have been underdeveloped and must be recapitalised presenting huge opportunities in all sectors. According to the Infrastructure Development Bank of Zimbabwe (IDBZ), in which the Chinese now have a stake, US$20bn is required to revive the country's infrastructure. In addition to that, we have heard that Woolworths is returning, Pick n Pay has upped its stake in TM, MacDonald's will be back, DRDGold is there, the French are looking at huge energy investments, Ecobank has bought a stake in a local bank, a number of Zimbabwean companies are looking for secondary listing on the JSE to raise new expansion capital while those banks whose licences were unfairly revoked in 2008 are back in action. Lately, Richard Branson has joined the chorus and we are likely to see Americans coming aboard. Zimbabwe has also lagged behind in the ICT and Services sectors and those investors with smart ideas and capital should make a bundle.

The fundamental requirement is that Mugabe and his cronies exit and the question is, will this happen soon enough? Personally I think Mugabe is tired and it must dawn on any intelligent man as he is that, all things come to an end. However we have a serious problem with the army and those in ZANU (PF) that who would rather have the current scenario prevailing.

As the scramble begins we all do hope and pray that free and fair elections will be held this coming year and the best thing that could happen to the country is that ZANU(PF) exits and we see the emergence of a democratic dispensation and hopefully, a new leadership driven by a new value system. Something at the back of my mind, however, tells me that ZANU (PF) will not go quietly. Investors need therefore to take a calculated risk and must not underestimate Mugabe who has a penchant for doing the unexpected. Yes it's time for him to go but I can see him beating his chest and claiming that without him and his insistence that sanctions must go, the investors would not be back. I can bet my bottom dollar that the MDC will not get any credit for this.

My own personal opinion is that it is such a pity that capital is insensitive to human rights. There is much national healing that needs to go on before we can claim that things are normal. This, however, will surely be swept under the carpet as the power of capitalism rears its ugly head once more. However, if you want to be part of the action, the time to go and invest in Zimbabwe is now.

*Vince Musewe is an independent Zimbabwean economist based in South Africa and chairman and founder of Truth2Power an organisation that seeks to encourage fearless debate and dialogue on creating a new Africa. You may contact him on

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