South African investor says he is under pressure to pull out of Zimbabwe

One of President Emmerson Mnangagwa’s most valued investors, South African billionaire Zunaid Moti, says he is under increasing international pressure to pull out of Zimbabwe.

He claims global negativity about Zimbabwe and the failing economy are affecting operations at African Chrome Fields in Kwekwe, where the Moti Group has invested more than $250m.

“There is a lot of pressure out there. People ask why we’re in business in Zimbabwe,” Moti said. “That has affected our ratings. Some people wouldn’t want to do business with us because we are in Zimbabwe.”

Zimbabwe is ranked 45th in Africa and 175th in the world on the economic freedom risk indicator, according to global think tank Trading Economics.

Moti’s legal adviser, Ashruf Kaka, said this was borne out by his employer’s experience. “If you invest in Zimbabwe you get stuck,” he said. “You can’t take out your money or rather realise profits because of the failing RTGS [realtime gross settlement] dollar that replaced the American dollar.”

When RTGS became the official currency three months ago, foreign currency was outlawed.

But the Zimbabwe dollar, which started trading at ZWL$6.50 against the US dollar on the interbank market in July is now trading at ZWL$14, and on the black market US$1 costs as much as ZWL$20.

Kaka said the ban on US dollars had brought African Chrome Fields to a standstill. “The situation got so bad that we couldn’t procure spare parts from China and other countries because we were trading in the volatile RTGS currency,” he said.

“Had it been a proper dollar economy, we would be fully operational. Unless and until economic and political reforms are adhered to, Zimbabwe will be a bad investment destination.”

At its peak, African Chrome Fields employed about 1 600 people and produced more than 30 000t of chrome a month, exporting all of it to SA for value addition and beneficiation. The company has since laid off 250 and about 600 more have left.

Moti’s fears for the future of Zimbabwe were echoed last month by his group’s former special adviser on Zimbabwe, Lord Peter Hain, who said Mnangagwa’s rule had been “disastrous”.

This was a sharp reversal from his position before he left the Moti group in February, when he said: “Zimbabwe could rise from the ashes.”

The Moti Group’s operations in Zimbabwe had “national project” status, meaning it could procure fuel and machinery duty-free.

It also enjoyed close relations with the country’s rulers, having entered the country when Mnangagwa was Vice President.

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