Chinese investment set to boost Zim

Chinese President Xi Jinping walks with Zimbabwean President Robert Mugabe on arrival for a state visit in Harare, Zimbabwe. REUTERS/Philimon Bulawayo

Chinese President Xi Jinping walks with Zimbabwean President Robert Mugabe on arrival for a state visit in Harare, Zimbabwe. REUTERS/Philimon Bulawayo

Published Dec 1, 2015

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Harare - The state visit by Chinese President Xi Jinping to Zimbabwe will likely result in the signing of several investment deals, spanning sectors such as energy, mining and agriculture.

The Zimbabwean government has said it is ready to take off after years of economic stagnation and decline.

Several Chinese experts in economics will assist in crafting economic strategies and give a defining trajectory to a country desperate for foreign direct investment.

Jinping leaves for Johannesburg, South Africa, on Wednesday for a State visit followed by the two-day sixth Forum on China-Africa Co-operation.

Zimbabwe’s finance minister Patrick Chinamasa told African News Agency the visit was significant in terms of economic recovery for Zimbabwe.

“As we are aware, our President [Mugabe] visited China last year and concluded a number of agreements, memorandums of understanding. Now the visit by President Xi is going to consolidate and cement some of the agreements and, in fact, to further co-operate with respect to those agreements which are not yet mature for signing,” Chinamasa said.

He said Zimbabwe has had a long political and diplomatic relationship with China, with the last six years seeing growing interest in economic matters.

“As we speak, the Chinese are becoming quite strong in terms of their investments in Zimbabwe,” Chinamasa said. “We already have more than 100 Chinese companies who have invested in Zimbabwe and there is a lot of interest in all sectors of the economy from Chinese investors.”

He said this would cultivate confidence among further investors in Zimbabwe as a safe and viable destination.

Many international investors are concerned at Zimbabwe’s indigenisation laws which require foreign investors with a US$500 000 capital base to sell 51% shareholding to locals.

However, to stimulate growth in investments, Zimbabwe has opted to give foreign investors a “tax holiday”, whereby they can make investments and not pay tax for a certain period of time.

Chinamasa said that as part of one of the deals, the Chinese would undertake construction of the Hwange 7 and 8 power plants, which would add 600 megawatts (MW) into the national grid.

“As you are aware, China is also funding expansion of the Kariba South Plant Expansion, which when complete in 2018, will add another 300MW,”he added.

“There are also three other power projects which are going to be funded by the Chinese and these are private sector driven. They are Makomo Resources, China Sunlight and also Lusulu. Each one of them will add 600MW when undertaken and all of them are near financial closure.”

Information communication technology minister Supa Mandiwanzira said the Chinese would also support the ICT sector.

“I can confirm that the support that we are going to receives includes support in the ICT sector and that includes funding towards infrastructure development, fibre optics as well as supporting some of our state-owned enterprises that are in the sphere,” he said.

He would not be drawn into the exact “significant” figures involved.

“But it’s not just support that is coming as donor aid. It is funding to projects that are available. There is absolutely no doubt that the ICT and telecoms sectors are (some) of the fastest viable areas of business today.”

Zimbabwe is struggling to emerge from an economic slump following a decade-and-half decline. The country reached a record 500 billion percent inflation in 2008 and since then, does not have its own local currency, but largely uses the United States dollar, the South African rand and Botswana pula as major currencies, with the British pound, Japanese yen and Chinese yuan also trading minimally.

ANA

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