Zimbabwe has been placed as one of the countries to watch in Africa in terms of investment potential.
Risk analysis experts who attended a forum hosted by the African Trade Insurance Agency in Abidjan last week cited Botswana, Côte d’Ivoire, Ethiopia, Rwanda and Zimbabwe as countries to watch in the coming months.
This was based on strong reserves in Botswana, political transitions in the case of Ethiopia and Zimbabwe, a strategy to transform its economy into a services hub in the case of Rwanda, and creating an enabling environment to attract investors in the case of Côte d’Ivoire.
Zimbabwe has opened up its economy since President Emmerson Mnangagwa took over in November and declared that the country is open for business.
Mnangagwa has been re-opening companies and mines that had been closed for years and insists that it is now economics first and politics later.
According to the Sunday Mail, Mnangagwa has created more than 60 000 jobs since he took over.
Jean-Louis Ekra, the former President of Afreximbank observed that Africa is in fact moving in a different direction than the current protectionist tendencies of Western countries.
In contrast, Africa is uniting under the banner of the African Continental Free Trade Area, which will become the world’s largest trade area.
While participants agreed that the risk perception in Africa is typically greater than the on-the-ground reality, they also recognized that making Africa less risky would require a concerted focus aimed at improving the overall business environment in order to address the risks that do exist.
“One of our roles at ATI is to educate governments to make them aware of the elements that international investors consider in their assessment of country risks. If countries are made aware that any drastic changes they make to legislation, for instance, could be a key political risk factor, they may make better choices and create more fertile environments for the private sector,” commented John Lentaigne, ATI’s Chief Underwriting Officer.
He added that “a stable investment climate can be demonstrably and directly linked to growth”.