By Kevin Samaita
Zimbabwean finance minister Mthuli Ncube has called on South African investors to put their money into state companies his government is privatising, while also revealing that there are no immediate plans to adopt the rand as an official currency of the country.
In an interview with Business Day, Ncube assured SA investors that they are welcome in his country, and that reforms he is implementing will bear fruit.
“We are open for business to SA investors,” he said. “This is why we are talking about the ‘One Stop Shop’ under the Zimbabwe Investment and Development Authority, which will fast-track all the necessary work for international investors.”
Among Ncube’s plans is the privatisation of some parastatals, including the Zimbabwe Mining Development Corporation, Agribank and the People’s Own Savings Bank, mobile operator NetOne, fixed-line operator TelOne, fuel company Petrotrade, Allied Timbers, and the Industrial Development Corporation of Zimbabwe.
“We also want to raise money out of privatisation,” he said. “Some of these valuations will be more clear when they go to the market. We know that there is value in them, we also know that it will be a process of further empowering Zimbabweans, crowding in foreign direct investment and local investment.
“We want them [state companies] to privatise, list on the Zimbabwe Stock Exchange or the Johannesburg Stock Exchange and deepen capital markets.”
In terms of the value that could be derived from such investments, Harare-based economist John Robertson said: “Any potential investor, including those from SA, would need to cross-check the value of these parastatals. They also need to really get the correct position from government on whether they will get free rein to run some of the companies. There are some that could be profitable but others have huge debts that could be difficult to service.”
Ncube has been at the centre of a storm since his appointment in September, with Zimbabwe’s economy in a tailspin. The country is facing an acute currency shortage, a thriving currency black market and steep price increases; shops have run out of basic commodities.
In response, industry players and the opposition MDC Alliance have called on the government to adopt the rand as Zimbabwe’s official currency.
But Ncube said this is out of the question for now. “Given that Zimbabwe is a soft economy, should we also be adopting the soft rand?” he asked. “It’s a fact to say that you have seen some volatility in the rand itself as a reference currency.
“I think it is also important to realise that there are other options that could be pursued, and we will pursue those options.
“The issue now is protecting the value of deposits before we think of what currency to adopt in future.” – BusinessDay