Thursday, February 25, 2021

Botswana, Zimbabwe re-define investment promotion agreement

Following the collapse of an agreement through which Botswana would extend a line of credit amounting to P500 million to the government of Zimbabwe in a bid to resuscitate its industrial sector, a rekindling of a mutually beneficial relationship seems highly likely, albeit with changes on the original terms and conditions. This possibility emerged at a meeting attended by a delegation from the Confederation of Zimbabwe Industries (CZI), the Ambassador of Zimbabwe to Botswana Thomas Mandigora and the local business community hosted by Business Botswana (BB) last week Thursday.

Responding to Sunday Standard’s question on why the original proposal crumbled, Mandigora disclosed that a chain of changes happened after the two governments shook hands on reviving Zimbabwe’s struggling industrial sector, such that the plan was overtaken by events.

Zimbabwe had at the time requested the credit line to recover its marred credit rating, caused by the country’s default on loans from the International Monetary Fund (IMF) and World Bank. The lowered credit rating prevented Zimbabwe from accessing further credit. The economy’s industrial sector was toppled by government’s policies which sought to indigenize production and manufacturing.

Joseph Kanyekanye, a representative from Zimbabwe and former President of CZI explained to Sunday Standard that the confederation was involved in the original proposal and thus contributed to its blueprint, though it failed to materialize. Kanyekanye said the confederation has as a result now taken a position to define another mutually beneficial relationship at private sector level, which is between CZI and BB to see how far they can take investment promotion in both countries.

“That there is a call for business and joint ventures to happen is beyond doubt. It’s obvious that Botswana needs to diversify and employ skilled Zimbabweans. It’s also a fact that there are factories in Zimbabwe that need to be rehabilitated and retooled,” said Kanyekanye.

He however highlighted that government cannot be taken out of the equation especially in the case of Botswana where it is the economic engine. “What we seek is not a donation, what we seek is a win-win situation,” stressed Kanyekanye. He gave the example of the shoe manufacturing industry, which is fully fledged in Zimbabwe but is still in infancy stages in Botswana, adding that establishing a working relationship will allow Botswana to leapfrog into the industry given that Zimbabweans have been doing it over the years.

He also emphasized that such relationship can facilitate skills transfer and enable Botswana to establish its own production plants. He urged CZI and BB to follow through the identified investment promotion opportunities with action and expressed his wish that the next meeting will involve shaking of hands.     

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