Zimbabwe is making a fresh push to lure foreign capital and is using its new gold-backed currency to persuade investors it won’t repeat mistakes that led to hyperinflation and economic woes in the past.
“The ZiG on its own is not a prompt for foreign investors to commit fresh capital to Zimbabwe,” said Hasnain Malik, the head of equity strategy research at Tellimer in Dubai. “For that they need to see the build-up of hard currency reserves and a track record for easy convertibility and repatriation.”
Mnangagwa is now on a US sanctions list amid allegations of corruption and human rights abuse, though restrictions on the country were eased in March. It’s working to fix that by deepening ties with the International Monetary Fund and hopes to secure a staff-monitored program in the second half of 2024.
“While the ZiG being gold backed will provide a certain level of stability, investors often need time to understand the direct impact,” said Valentine Garacho, co-founder of Zerttew Global which has mining interests in Zimbabwe. “Ultimately, what investors want to be clear about is the security of their investment.”
‘One-Stop-Shop’ The country set up the Zimbabwe Investment and Development Agency in 2022 as “a one-stop shop” to attract suitors, said Tafadzwa Chinamo, its chief executive officer.