Has Zimbabwe lost Aliko Dangote?

By Shame Makoshori

When Nigerian billionaire Aliko Dangote arrived in Zimbabwe last month, the red carpet was rolled out for Africa’s richest man.

He was showered with exclusive hospitality and access to ruling elites, including meetings with the two Vice Presidents Emmerson Mnangagwa and Phelekezela Mphoko before seeing President Robert Mugabe.

He may have never attracted such attention elsewhere across Africa.
All the same, this was understandable.

Africa’s richest man had stepped into a country whose leaders have run out of ideas about how to repair the extensive damage now threatening to ground a once promising economy following years of mismanagement and corruption.

Zimbabwe is at the crossroads

Only a few meaningful investments have taken place in the past decade after hundreds of firms folded under difficult conditions. Thousands more have divested to avoid expropriation by government through its controversial empowerment laws.

So when Dangote announced that he had “already made the decision to invest” in the country, the drums beat even loudest among politicians, who anticipated that his proposed multi-million dollar investment would arrest one of the most devastating crises to hit the southern African nation, where dwindling State revenues, firm closures, declining disposable incomes, rampant looting and social exclusion is the order of day.

But last week, Dangote inadvertently dropped the bombshell.

In an interview with the news agency, Reuters, the billionaire listed Cameroon, Ethiopia, Kenya, Mali, Niger, Nigeria, Senegal, Ivory Coast and Zambia as his next investment destinations.

He did not mention Zimbabwe, where he had promised to start projects next year during his Harare visit.

Has he suddenly forgotten about Zimbabwe?

This is most unlikely.

But if he has put his back to the country, it could be time for self-introspection. What is it that could have forced the billionaire to develop cold feet?

Godfrey Kanyenze, executive director at the Labour and Economic Development and Research Unit of Zimbabwe, pointed to several concerns that could have made Dangote’s team of experts, which visited the country a week after his departure, to advise otherwise.

“You will be a hero of an investor to come to invest (in Zimbabwe) when companies are closing,” said Kanyenze.

“What I know is that investors are coming to check the environment. They have problems with the environment and they are only coming here with a futuristic view. We are so desperate that sometimes what we may perceive to be real investment could be investors who are just mapping the environment,” Kanyenze said.

In last week’s interview, Dangote said his Nigerian Stock Exchange-listed conglomerate planned to build cement plants elsewhere and omitted Zimbabwe where he had promised to pour over US$400 million into a cement plant with a capacity to produce 1,5 million metric tonnes per year.

“Another plant will be launched in the Democratic Republic of Congo next year,” said Dangote, whose sprawling conglomerate has oil, gas, telecommunications and real estate interests.

He will be expanding his sugar business into Zambia, where he already has a cement plant.
Economist, Witness Chinyama, said Zimbabwe still had a real chance of attracting Dangote to invest. He said after the billionaire came to Zimbabwe, licencing issues must have been done quickly to get him down to work.

“He had made up his mind,” said Chinyama.

“We must give him the licences to start operating. What have we done since he came here?” Chinyama asked.

The Nigerian billionaire had made bold moves to crack into the Zimbabwean market despite concerns from other investors unhappy with the country’s restrictive laws, which limit them to a maximum of 49 percent shareholding in local firms.

In the past week, new Empowerment Minister, Patrick Zhuwao, has made chilling statements about his intention to press ahead with the policy despite earlier signals government was slowly reviewing the controversial policy.

Authorities, battling to stop an economic meltdown that has sparked divestment and massive job losses, had indicated that a raft of laws that made Zimbabwe less attractive to investors would be reviewed.

An unprecedented sudden drop in electricity generation has now hit the country, placing investors in a more precarious situation. Industries and domestic consumers are enduring long periods of blackouts, with load shedding of up to 18 hours.

Kanyenze said this was bad news to any efforts to lure foreign investment.

“Do we have the power? You (the media) are reporting that water levels in Kariba are dropping. Another drought is looming. We need US$15 billion for power projects. This is not charity, investors come where there is a good (investment) climate,” he said.
Dangote is also certainly not a charity investor. Financial Gazette