Leaders of the European Union strengthened bilateral economic partnership with Zimbabwe during the latest special high-profile EU Private Sector Dialogue held in early April 2024 in the capital Harare, shedding light on key diverse opportunities for trade and investment between Zimbabwe and the EU.
The economic and investment projects comprehensively discussed during the meetings are important for Zimbabwe, as the government seriously intends to continue participating in them and ultimately to change the economic dynamics. Zimbabwe, situated in the southern Africa region, consistently seeks to resuscitate its economic sectors that have come under the United States stringent sanctions and Russia’s delay in implementing its bilateral economic agreements signed previously and during the first Russia-Africa summit in 2019.
Russia’s Foreign Affairs Ministry informed that more than 40 countries have expressed readiness to join BRICS, an informal association comprising Brazil, Russia, India, China and South Africa together with its five new members. Winning its old-time Soviet-era allies to Moscow’s side has been Kremlin’s policy, and President Vladimir Putin’s major achievement. By consensus criteria (a rubber-stamping kind of agreement among the members) South Africa, Egypt and Ethiopia were strategically roped into BRICS.
Despite being on BRICS platform, and with New Development Banks sluggish approach and narrow scope of operations, these countries are still rumbling for IMF and World Bank loans to resuscitate their economy. That however, in the next summit ten more are among the 40 countries marked from Africa. Zimbabwe is listed among the new potentials for BRICS membership. Frederick Musiiwa Makamure Shava, Zimbabwean politician and Minister of Foreign Affairs and International Trade has accepted to attend the first forthcoming Russia-Africa Foreign Ministers summit in St. Petersburg in July 2024.
Several reports confirmed that Russia, on the other hand, has abandoned the lucrative platinum project contract that was signed for $3 billion in September 2014, the platinum mine in the sun-scorched location about 50 km northwest of Harare, the Zimbabwean capital. Reasons for the abrupt termination of the bilateral contract have, still until today, not been made public, but Zimbabwe’s Centre for Natural Resource Governance pointed to lack of capital for the project. So, the site has been abandoned since 2021.
Foreign Minister Sergey Lavrov launched the $3 billion Russian project back in 2014, after years of negotiations, with the hope of raising Russia’s economic profile in Zimbabwe. The project, where production is projected to peak at 800, 000 ounces yearly, involves a consortium consisting of the Rostekhnologii State Corporation, Vneshekonombank and Vi Holding in a joint venture with some private Zimbabwe investors as well as the Zimbabwean government.
Despite that however, on March 20, President Emmerson Mnangagwa accepted a generous donation of 25,000 tonnes of grain and 23,000 tonnes of fertilizer from Russia to assist Zimbabwe’s impoverished population. Mnangagwa emphasized that the donation would play a crucial role in mitigating the impact of the El Nino-induced drought in Zimbabwe.
Quite interestingly, President Emmerson Mnangagwa, back in February 2023, took delivery of Belarusian agricultural vehicles, tractors and other equipment for Zimbabwe. According reports from the Zimbabwe’s presidency in Harare, it was after years of negotiations that Zimbabwe finally recieved its $58 million farm mechanization facility from Belarus, while another deal worth $100 million signed would be delivered later.
Zimbabwe and Belarus agreed on assembling 3000 tractors, agreed on the supply to Zimbabwe different kinds of machinery and equipment made in Belarus for agriculture and timber industry. Both have further agreed to establish a mechanization programme for the farming and timber industries.
Noticeably China, the Asian economic giant, is also playing its part in Zimbabwe. Beijing has long used building diplomacy – either in the form of loans or gifts – to increase its influence in Africa. In the latest, Beijing handed over the new parliament building estimated at $140 million to Zimbabwe, besides committing huge sums in other economic sectors in the southern African country.
As Zimbabwe intensifies its efforts by widening the search for potential foreign investors especially on the global geopolitical landscape, the European Union consequently offers an increasing focus and the best appreciable alternative support by granting investment funds under the strategic-designed Global Gateway. Reports researched by this author shows Zimbabwe has already benefited from the Global Gateway investment funds for projects such as the Kariba dam rehabilitation and environmental programs, and other specific programs are currently under serious consideration.
In April, the well-attended gathering brought together representatives from EU businesses with a presence in Zimbabwe, Zimbabwe private sector players, key Zimbabwean private sector organizations (CZI, ZNCC, WABAZ, NBCZ), banker associations (BAZ), investment promotion agency (ZIDA) and trade promotion agency Zimtrade for a productive discussion aimed at unlocking Zimbabwe’s economic potential through enhanced EU-Zimbabwe collaboration.
Discussions addressed concerns about debt sustainability and highlighted the positive steps Zimbabwe is taking to improve the investment climate. It further recognizes the importance of the strong business environment, and therefore valued the dialogue on how the EU can best tailor its support to address Zimbabwe’s specific challenges. The corporate business dialogue also showcased the EU’s commitment to supporting private sector investments in Zimbabwe by highlighting a range of financial instruments available through Development Financial Institutions (DFIs) like the European Investment Bank (EIB). It concretely pointed to the €17.7 billion previously invested in Zimbabwe by the EU.
Representatives from CABS, First Capital Bank, and NMB Bank, beneficiaries of the EIB facility credit lines, were present to answer questions from potential borrowers. There were two panels convened, focusing on trade and investment respectively, providing a comprehensive platform for stakeholders to exchange insights and perspectives. The dialogue also attempted identifying challenges and opportunities for enhancing EU-Zimbabwe economic cooperation, with a particular emphasis on addressing barriers to investment and trade.
The EU Private Sector Dialogue served as a stepping stone towards a stronger economic partnership between the EU and Zimbabwe, paving the way for a more conducive environment for investment and mutual growth. Long before this corporate gathering, European Union members and business investors have been making consistent efforts at capitalizing on and exploring several emerging opportunities across Africa.
Reinforcing the high level public private dialogue and enhancing long-term dialogue structures between EU and Africa Business Associations as surest ways to unlock new business and investment opportunities, including in the areas of manufacturing and agro-processing as well as regional and continental value chains development. In fact, these are backed by initiatives incorporated into a document entitled “Toward a Comprehensive Strategy with Africa” – the document sets forth what the EU plans to do with Africa under the Global Gateway which has earmarked €300 billion ($340 billion).
In a related development and guided by the Vision 2030, the Government of Zimbabwe would hold an international trade and investment fair – under the theme “Innovation: The Catalyst to Industrialization and Trade” – to showcase its potential investment sectors to foreign partners in the city of Bulawayo in Zimbabwe on 23 to 27 April, 2024.
The brochure explains the theme recognizes innovation and entrepreneurship as complementary forces that work together to open pathways to economic growth and progress. Zimbabwe, which has various funds-stricken economic sectors, stands for this growth with support from around the world. Official information obtained from ZITF by this author listed the participation of the European Union, France, Germany, Italy, the Netherlands, Japan, South Korea, United Arab Emirates, United Kingdom and the United States of America.
Zimbabwe, a landlocked country in southern Africa, shares a 200-kilometre border on the south with South Africa, bounded on the southwest and west by Botswana, on the north by Zambia and on the northeast and east by Mozambique.
Zimbabwe is a member of the Southern African Development Community (SADC)
