Publications
Partners
Harare - “He loves me, he loves me not,” might be a game of French origin in which one person seeks to determine whether the object of their affection returns their feelings or not, but it can also be used in the relationship between Zimbabwe and South Africa.
I digress. According to Wikipedia, a person playing the game alternately speaks the phrases "He loves me," and "He loves me not," while picking one petal off a flower for each phrase.
The phrase they speak on picking off the last petal supposedly represents the truth. The player typically is motivated by attraction to the person they're speaking of while reciting the phrases.
They may seek to reaffirm a pre-existing belief, or act out of whimsy.
Just this week two conflicting statements came out from Zimbabwean officials with regards to their trade relationship with South Africa.
Firstly, Reserve Bank of Zimbabwe governor Gideon Gono came out expressing the central bank’s concern over Zimbabwe’s over-reliance on imports (60% of Zimbabwe’s imports are from South Africa), saying the development is depleting the country’s foreign currency base.
Gono said the outflow of foreign currency must be stopped. He added that he has no problem with the importation of machinery and raw materials, but it is the importation of finished goods he is worried about.
He added that as the central bank “we remain very, very worried by the extent and level to which we are dependent on imports, particularly of finished products.
"We cannot build a strong economy by exporting jobs, we cannot build a strong economy by sub-contracting producers in other jurisdictions to produce for us that which we can produce for ourselves. The level of finished product imports is worrying us.”
Gono was correct, especially if one considers the latest information coming from the ministry of economic planning.
According to the ministry’s secretary Desire Sibanda, Zimbabwe incurred a negative trade balance of US$532m from its trade with South Africa after importing $3.2bn worth of goods, compared to exports to the same country of $2.7bn.
Trade between the two countries totalled $5.9bn last year from $4.6bn in 2011. South Africa remains Zimbabwe’s biggest trading partner, accounting for more than 60% of imports.
While trade with South Africa is clearly skewed towards the latter and Zimbabwean officials are not too happy about it, they are at the same time courting South Africa’s hand towards some form of economic relationship.
A Zimbabwean delegation was in South Africa this week for an investment conference it aims to use to attract foreign direct investment, which has eluded the country over the last decade.
Economic Planning and Investment Promotion Minister Dr Tapiwa Mashakada, who opened the conference, said South Africa is Zimbabwe’s most preferred source of investment. The minister said Zimbabwe wants South Africa to be a key driver in FDI.
He added the conference also sought to develop strong banking relationships and access to lines of credit with South African, regional and international banks keen to facilitate trade and investment in Zimbabwe.
He hoped this could pave the way for the resuscitation of the 20-year R2.65bn facility South Africa had made available in pre-independence Zimbabwe.
There is no doubt trade and investment between Zimbabwe and South Africa has every reason to thrive, considering that the two signed a Bilateral Investment Promotion and Protection Agreement in 2011.
But is trade the right way to revive the ailing Zimbabwean economy? Gono said there was need to strengthen and capacitate local industry to produce and “that is the only way we can stop the haemorrhaging of foreign currency”.
He believes that is the only way Zimbabwe can reduce unemployment.
His sentiments couldn’t be further from the truth: Zimbabwe needs investors rather than imports, and South African investors who were brave enough to ignore all the economic and indigenisation noise coming from the former are reaping rewards for the risk they took.
Investec for example, which invested a $5m convertible loan in OK Zimbabwe two years ago, has opted to convert the loan into equity.
This resulted in issuance of additional 79 365 079 shares in OK Zimbabwe Limited. At current prices of 18.01 cents, these shares are now worth $14.3m - a massive return by any measure.
Investec’s case is a clear testimony that South African companies can invest in Zimbabwe and make hay even before the sun shines.
- Fin24
*Malcom Sharara is Fin24’s correspondent in Zimbabwe. Views expressed are his own.
I digress. According to Wikipedia, a person playing the game alternately speaks the phrases "He loves me," and "He loves me not," while picking one petal off a flower for each phrase.
The phrase they speak on picking off the last petal supposedly represents the truth. The player typically is motivated by attraction to the person they're speaking of while reciting the phrases.
They may seek to reaffirm a pre-existing belief, or act out of whimsy.
Just this week two conflicting statements came out from Zimbabwean officials with regards to their trade relationship with South Africa.
Firstly, Reserve Bank of Zimbabwe governor Gideon Gono came out expressing the central bank’s concern over Zimbabwe’s over-reliance on imports (60% of Zimbabwe’s imports are from South Africa), saying the development is depleting the country’s foreign currency base.
Gono said the outflow of foreign currency must be stopped. He added that he has no problem with the importation of machinery and raw materials, but it is the importation of finished goods he is worried about.
He added that as the central bank “we remain very, very worried by the extent and level to which we are dependent on imports, particularly of finished products.
"We cannot build a strong economy by exporting jobs, we cannot build a strong economy by sub-contracting producers in other jurisdictions to produce for us that which we can produce for ourselves. The level of finished product imports is worrying us.”
Gono was correct, especially if one considers the latest information coming from the ministry of economic planning.
According to the ministry’s secretary Desire Sibanda, Zimbabwe incurred a negative trade balance of US$532m from its trade with South Africa after importing $3.2bn worth of goods, compared to exports to the same country of $2.7bn.
Trade between the two countries totalled $5.9bn last year from $4.6bn in 2011. South Africa remains Zimbabwe’s biggest trading partner, accounting for more than 60% of imports.
While trade with South Africa is clearly skewed towards the latter and Zimbabwean officials are not too happy about it, they are at the same time courting South Africa’s hand towards some form of economic relationship.
A Zimbabwean delegation was in South Africa this week for an investment conference it aims to use to attract foreign direct investment, which has eluded the country over the last decade.
Economic Planning and Investment Promotion Minister Dr Tapiwa Mashakada, who opened the conference, said South Africa is Zimbabwe’s most preferred source of investment. The minister said Zimbabwe wants South Africa to be a key driver in FDI.
He added the conference also sought to develop strong banking relationships and access to lines of credit with South African, regional and international banks keen to facilitate trade and investment in Zimbabwe.
He hoped this could pave the way for the resuscitation of the 20-year R2.65bn facility South Africa had made available in pre-independence Zimbabwe.
There is no doubt trade and investment between Zimbabwe and South Africa has every reason to thrive, considering that the two signed a Bilateral Investment Promotion and Protection Agreement in 2011.
But is trade the right way to revive the ailing Zimbabwean economy? Gono said there was need to strengthen and capacitate local industry to produce and “that is the only way we can stop the haemorrhaging of foreign currency”.
He believes that is the only way Zimbabwe can reduce unemployment.
His sentiments couldn’t be further from the truth: Zimbabwe needs investors rather than imports, and South African investors who were brave enough to ignore all the economic and indigenisation noise coming from the former are reaping rewards for the risk they took.
Investec for example, which invested a $5m convertible loan in OK Zimbabwe two years ago, has opted to convert the loan into equity.
This resulted in issuance of additional 79 365 079 shares in OK Zimbabwe Limited. At current prices of 18.01 cents, these shares are now worth $14.3m - a massive return by any measure.
Investec’s case is a clear testimony that South African companies can invest in Zimbabwe and make hay even before the sun shines.
- Fin24
*Malcom Sharara is Fin24’s correspondent in Zimbabwe. Views expressed are his own.
