Xenophobia poses a billion-dollar investment risk for Africa
via NewsDay Zimbabwe14 min read
Xenophobic violence in key economic hubs, particularly South Africa, threatens Africa's economic growth and foreign direct investment. Despite a 75% surge in FDI to a record US$97 billion in 2024, recurring xenophobic incidents deter investment, disrupt intra-regional trade, and strain diplomatic ties. Migrant entrepreneurs are significant contributors to South Africa's economy, with International Labour Organization data indicating they contribute approximately 9% to the GDP, and over a third of international migrant enterprises employ South African citizens. The African Continental Free Trade Area AfCFTA, projected to increase intra-African trade by 45% by 2045, relies on the free movement of labor and safeguarding cross-border investments. The economic cost of instability is substantial, with research showing high-intensity conflicts can lead to a cumulative loss in per capita GDP of approximately 20% over five years. Xenophobic attacks in 2019 led to diplomatic tensions and operational disruptions for South African corporations like MTN, Multichoice, and Shoprite in Nigeria. The business community's silence on xenophobia is a misjudgment, as it represents a systemic business risk affecting supply chains, consumer markets, and investor confidence. Addressing xenophobic violence is crucial for sustained economic development and regional competitiveness, and for securing the "peace dividend" of social stability and productive investment. The success of the AfCFTA is linked t
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Zimbabwe is looking to raise US$9 billion for its energy sector, with new regulations anticipated to accelerate grid expansion, improve electricity access, and attract new capital. This initiative comes as the country also focuses on other infrastructure projects and addresses climate and food security risks, including the impact of El Ni帽o. The government is also conducting a survey on the private solar boom, as many households are generating their own power. Additionally, Zimbabwe recently commissioned a specialized honey testing laboratory to enhance export competitiveness.
China has reiterated its dedication to bolstering its relationship with Zimbabwe, pledging ongoing support for the country's industrialization and Vision 2030 agenda. This commitment was highlighted by Chinese Ambassador to Zimbabwe Zhou Ding at a reception marking the 99th anniversary of the People's Liberation Army. Ambassador Zhou described the relationship as an "all-weather" partnership, emphasizing expanding military, economic, and diplomatic cooperation. He noted that China remains Zimbabwe's largest source of foreign direct investment and a key trading partner, with Chinese investments contributing to infrastructure upgrades and industrial expansion, including improvements in power supply and transportation, and the development of manufacturing hubs for steel, tiles, cement, and fertilizers. Cooperation between the People's Liberation Army and the Zimbabwe Defence Forces has deepened through training, logistics, and strategic coordination. The ambassador also traced the historical ties to Zimbabwe's liberation struggle, acknowledging China's support through diplomatic backing, military assistance, and training. He mentioned President Xi Jinping's letter to Zimbabwean liberation war veterans, commending their contributions and encouraging them to inspire younger generations to strengthen China-Africa relations. Furthermore, Ambassador Zhou stated that China and Zimbabwe continue to collaborate on global affairs, defending multilateralism and advocating for a more equit
Must ReadZimbabwe has commissioned a specialized honey testing laboratory to enhance export competitiveness. In other financial news, local banks have provided a US$125 million syndicated loan to Mutapa Gold following its turnaround. Meanwhile, ART operations have been affected by power outages and shortages of raw materials, with the manufacturer reporting a 6% decline in export volumes and a 26% decline in paper division volumes for the third quarter ending June 2022. Additionally, the Zimbabwe Energy Regulatory Authority ZERA plans to survey the private solar sector due to increased household power generation.