Massive economic growth on horizon

05 Aug, 2018 - 00:08 0 Views
Massive economic growth on horizon

The Sunday Mail

PRESIDENT Mnangagwa’s election in the July 30 historic harmonised polls is set to thrust the economy on a phenomenal growth trajectory, with most investment projects signed in the last six months expected to take-off, industrialists have said.

Zimbabweans voted last Monday and Zanu-PF swept to victory, with President Mnangagwa clinching 50,8 percent of the vote cast in the presidential race.

The ruling party also got 145 seats in the National Assembly, compared to the MDC Alliance’s 63 seats.

MDC Alliance presidential candidate, Mr Nelson Chamisa, got 44,3 percent of the 4 607 899 votes.

Industrialists believe President Mnangagwa’s victory is good for business as there will be continuity after a lot of successes recorded in the last eight months of his administration.

In his inauguration speech of November 24 last year, President Mnangagwa declared that Zimbabwe was now open for business after years of isolation due to former President Mr Robert Mugabe’s anti-investment laws and utter dislike for the West, which had imposed sanctions on his regime.

The country’s premier investment promotion body, the Zimbabwe Investment Authority (ZIA), approved investment applications worth over US$16 billion in the six months to June 30, 2018. Companies such as Metallon Corporation, Falcon Gold and Pickstone Peerless Gold Mine plan to expand their operations in response to the conducive investment climate created by President Mnangagwa’s administration.

Metallon announced last week that it plans to modernise its mines — How Mine, Shamva, Mazowe and Redwing — to the tune of US$530 million given its strong position to invest due to improved economic conditions.

Confederation of Zimbabwe Industries (CZI) president, Mr Sifelani Jabangwe told The Sunday Mail Business last week that Zanu-PF’s victory was good for further economic development.

Mr Jabangwe said the liberalisation of the economy through the tweaking of the Indigenisation and Economic Empowerment Act to allow foreign investors to hold up to 100 percent in their investments, apart from the diamond and platinum sectors, is set to spur economic growth in the country.

“We are going to witness something phenomenal in terms of economic growth. Remember there is a significant number of investors who want to invest in the country and had either started or were waiting for election results,” said Mr Jabangwe.

“A lot of investors, from manufacturing to mining, have shown confidence in the country and I think you saw the various groundbreaking ceremonies that His Excellency the President (Mnangagwa) participated in.

“We expect more of this going forward.”

A United Kingdom-based strategic analyst, Mr Hopewell Mauwa encouraged losers to “put the nation first, accept the results and support the President’s efforts to rebuild the economy”.

“The political certainty brought about by President Mnangagwa’s electoral victory will encourage foreign direct investment into infrastructure and the industry to flow into the country.

“This is an exciting period for Zimbabwe’s economic prospects and Government needs to get back to business and execute the promises that made the public elect it into office.”

All eyes on key projects

There are game-changing projects in the pipeline, which have capacity to help Zanu-PF fulfil its campaign promise of creating jobs for the people.

Some of them include the US$4,2 billion platinum project by Karo Resources, the US$3 billion Great Dyke Investments (GDI) platinum project, the US$1 Zisco revival deal, the US$1 billion stainless steel project, the US$1,4 billion Kamativi lithium project and the Liberation Mining’s US$500 million coal mining project.

Liberation Mining has already started operations in Hwange, together with Prospect Resources at its Arcadia Lithium project in Harare.

Prospect Resources was recently in the market looking for US$55 million for the first phase of its project.

GDI plans to commit US$400 million into the construction of a precious metals mine and smelter at its Darwendale project.

The project is a 50:50 investment involving Russia’s JSC Afromet and Zimbabwe’s Pen East Limited.

It expects to produce 855 000 ounces of platinum group metals and gold yearly. GDI has already splashed US$60 million on preparatory works and initial infrastructure such as roads, storage and residential facilities. The first phase the project construction requires about US$400 million.

The Mhondoro-Ngezi based Karo Resources project, whose ground-breaking ceremony was officiated by President Mnangagwa a few days before the July 30 elections, is expected to create 15 000 direct jobs and a further 75 000 indirect jobs.

The Karo deal is set to become the biggest integrated platinum mining and refinery operation in the country, with capacity to produce 1,4 million ounces of PGM metals per year in five years’ time.

Karo will also mine coal and build a 300 megawatt solar power plant to power its operations which require 250MW. The 50MW balance will be channelled to the national grid.

Karo owns 50 percent of the platinum division, Karo Platinum, with the other 50 percent being owned by the Zimbabwe Investment Company, a Government-owned special purpose vehicle. Nonetheless, the Cyprus-based Karo will own 75 percent of the coal mining, power generation and refining projects.

More investors on the way

Mr Jabangwe expects more investors to come, particularly in the mining sector given that local production costs are still relatively low considering that resources are not yet as deep as is the situation in other countries.

But Mr Jabangwe said it is time the country strategises to ensure it gets real value from the mineral resources.

“What we now need to do is to strategise on how we can derive more value from our mineral resources. They say we can’t have a platinum processing plant in Zimbabwe yet we produce half of the world’s platinum.

“We must insist on value addition of minerals locally,” said Mr Jabangwe.

He wants the private sector to come to the party and not wait for Government to take the lead in everything.

President Mnangagwa has reiterated that Government seeks to promote a private sector-led economy, and wants the sector to work with national leaders to raise the living standards of citizens. Last year, Zimbabwe hauled 445 000 ounces of platinum, coming third after South Africa and Russia.

It is understood that 90 percent of global platinum comes from Zimbabwe and South Africa.

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