Dr. Noah Manyika: Investors are not stupid

By Dr. Noah Manyika

Zimbabwe’s Ambassador to Russia, Retired Major General Sango is quoted in the Herald saying that government red tape is frustrating Russian investors.

What the Comrade Ambassador has just discovered is that in the real world, investors are not mentally challenged people involved in a race to the bottom to prove who can lose the most money the fastest. They are calculating and shrewd business people who invest to make money.

If they are legitimate investors, they have a fiduciary responsibility to their shareholders and boards of directors to make sure they invest prudently.

They know that the red tape they encounter coming in is designed to create opportunities for government officials and politically connected facilitators to demand bribes.

They know it’s an indication of the challenges they will encounter in the event that they invest, challenges that will significantly impact day-to-day operations and profitability.

They are not illiterate and uninformed. They do their homework..it’s called “due diligence.” So they read the stories about the $196 million in IATA funds currently stuck in Zimbabwe which are owed international airlines, and know they will face similar challenges repatriating their own profits if they invest.

They are aware that they are dealing with an erratic government that doesn’t understand the cost to companies of decreeing a public holiday so that workers can attend a demonstration against sanctions.

Ambassador Sango is not going to be the last one of the “New Dispensation’s” crop of new diplomats who is going to be disabused of the delusion that investors even from countries that supported the liberation struggle will invest simply out of their love for Zimbabwe.

Investors won’t overlook the realities on the ground simply because people who wear a scarf with the colors of the Zimbabwean flag parrot the “Zimbabwe is open for business” mantra, or march for the removal of sanctions while leaving the red tape, the corruption, the incompetence etc. untouched.

Zimbabwe is not their only investment option, so they don’t lose anything by not investing here. It is Zimbabwe that does.