French companies keen to invest

Some European countries have returned to do business in Zimbabwe despite the tense political situation with widening divisions in the ruling Zanu (PF) party over Mugabe’s succession.

Lesaffre, a French firm that is the world leader in the manufacture of yeast and fermentation products, recently acquired a 60 percent stake in Zimbabwe’s sole manufacturer and distributor of yeast and related products, Anchor Yeast.

Speaking at the signing ceremony, French ambassador to Zimbabwe Laurent Delahousee said there was a huge appetite for Zimbabwe among companies in France.

“There is a lot interest for Zimbabwe by the French private sector as well as by the French government,” he said.  “I am a believer in the future of this country and with my team what we are doing is helping and contributing for this dream to become true.”

Loans
He however, said it was more difficult for the French government to give loans to Zimbabwe because of the country’s arrears amounting to $9,9 million.  “This has nothing to do with the political issues,” he added.

Zimbabwe, which is battling to pay repay its debts to the multilateral institutions, is currently undergoing an International Monetary Fund (IMF) Staff Monitored Programme. This is an informal agreement to monitor the implementation of its economic programme and help clear debts and access loans.

However, analysts also attribute the country’s declining investment to lack of political will after Zimbabwe was ranked 171 out of 189 on the 2014 World Bank Doing Business survey.

Lack of security
Lack of security, the indigenisation law, which restricts foreign ownership in local firms to 49 percent, and political uncertainty has resulted in investors shying away.
“Some investors do not wait, they want to be in Zimbabwe now, they feel that the country is ready and there are opportunities to seize right now. It’s not only about the future, it’s also about today,” said Delahousee.

Lesaffre representative, Jean-Phillippe Poulin, said through the joint venture, his company would inject $3,5 million into Anchor Yeast to refurbish its factory while both partners will immediately inject $14 million into the business.

Plans are also underway to establish a school for bakers and to provide services and training for bakers next year.  “The real assets of Zimbabwe are the knowledge and know-how of the citizens. We know there are a lot of things to fix, a lot of issues but I am amazed by the quality of education and knowledge of the people,” said Poulin.

$20 million
According to the Deposit Protection Corporation, an unnamed French investor is also expected to inject around $20 million into MicroKing Finance this month.  MicroKing is a subsidiary of AfrAsia Zimbabwe Holdings Limited owned by Mauritius-based AfrAsia Bank (ABL) Limited which has since exited the country and is now disposing of its remaining assets.

Last year, a local renewable energy firm, Samansco signed an exclusive distribution agreement with a French energy company, Schneider Electric and this will help boost its revenue to over $10 million in the next two years.
At the time, Delahousse said the return of Schneider Electric to the country was: “A testimony to the hope and confidence that French companies have in Zimbabwe.”  Schneider Electric has a presence in over 100 countries and employs 160,000 people.
In 2013, Limagrain through its French subsidiary Vilmorin & Cie, acquired a controlling stake in the country’s biggest seed producer, SeedCo.

French cement maker, Lafarge has also invested millions of dollars into its business in Zimbabwe while the multinational corporation, Total has franchises in the country.