Mining: Meanwhile, Zimbabwe says it’s changing course

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The chit-chat around the water cooler at a recent conference about mining in Zimbabwe – called the Harare Indaba – was on the sceptical side. 

Involving a prominent mining and resources banker, a buy-side analyst and a sell-side analyst, the view was that the southern Africa country was saying all the right things, but evidence was needed of real change.

The new mines minister, Winston Chitando, declared that the country was “open for business”, echoing the refrain of President Emmerson Mnangagwa since he deposed former president and despot Robert Mugabe. 

Since the November coup, Zimbabwe has relaxed rules on “indigenisation” – its home-grown empowerment legislation – which now doesn’t demand state control of foreign businesses except in the case of platinum and diamonds.

It even appears as if nationalisation of these critical industries is also being relaxed. In an interview with finweek, Chitando said the country’s National Empowerment Act would allow for the suspension of state control for a 10- or 15-year period by means of a legislated waiver. 

Apparently, the option of a waiver has always been there. 

It was a well-managed message, ably supported by the chairperson of Zimbabwe’s mineral resources portfolio committee, Temba Mliswa, who had nearly every member of the committee at the conference. 

Mliswa was articulate and refreshingly thorough in his criticism of corruption: “Land reform [Mugabe’s land grab policy] was a political move, and we are glad that’s behind us now,” he said.

“Now, there needs to be commitment from the government for a new dispensation. We also need to see consistency from President Mnangagwa. He is a lawyer, and so we expect him to stick to the law. We will do our work to show you your money is safe.

“Indigenisation became an individual error, as sometimes too much power is given to a minister. When we give too much power to an individual, there is bound to be corruption.” 

And so it went. Exhortations to invest, exhortations not to corrupt: “For every corrupt official, there’s a corruptor. Don’t corrupt our people,” he said, in the general direction of the conference audience, most of whose members were suspicious of Zimbabwe anyway, but which nonetheless drew enthusiastic applause from the committee members.

The view on the ground was that although mention of a waiver, the fight against corruption and other pro-business comments were to be lauded, there was still too much red tape and bad policy in Zimbabwe.

These included difficulties such as repatriating money from the country, difficulty exporting minerals, especially through Beit Bridge, and the general opposition to expatriate work that, one sell-side analyst commented, had to be ironed out.

“You want the CEO of your company to be able to work in Zimbabwe, or what’s the point?”

This article originally appeared in the 12 April edition of finweek. Buy and download the magazine here or subscribe to our newsletter here.

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